Farepack chief says sorry

The managing director of the collapsed UK Christmas savings firm Farepak apologised to his customers tonight.

Nick Gilodi-Johnson said he was “gutted” for the more than 150,000 out-of-pocket people now facing a decidedly un-merry Christmas.

However, he hit out at the Halifax Bank of Scotland (HBOS), which he claimed forced Farepak’s parent company into receivership by cancelling its overdraft.

Farepak customers across the UK, mainly people on low-incomes, have lost a combined £35m (€52m) as a result of the collapse.

Mr Gilodi-Johnson, Farepak’s managing director, said in a statement: “What has happened to Farepak and its customers is nothing short of a tragedy.

“The business I ran was healthy and solid, but I am afraid that HER (European Home Retail) – the overall group which owned it – was not so fortunate and despite our efforts to resolve the situation, it was ultimately forced into receivership after HBOS terminated its long-standing credit facility.

“I honestly thought there was a workable solution which would have safeguarded all our customers’ money, but the bank did not agree.

“I feel its loss with immense sadness as it was a business my father founded and devoted his life to building and strengthening.

“We both cared passionately about it and about the fact that it was able to help so many families through Christmas.

“The shares in the company my father built are now worthless, but I appreciate that is of no comfort to the tens of thousands of our customers whose Christmas hopes have been dashed by these terrible developments.

“My family is very sorry that this whole situation has arisen and is devastated by the effect it has had on so many other families and we will be making a donation to the appeal.”

He added on BBC Radio Five Live: “I’m really gutted that everybody has lost out like this. I’m really so sorry.”

Earlier today HER chairman Clive Thompson said the firm was “hung out to dry” by HBOS and that he was “disgusted” at the bank’s behaviour.

As Mr Thompson and the bank traded accusations about each other’s part in the crisis, it was announced that they both faced being quizzed by MPs.

Jim Devine, Labour MP for Livingston, revealed he had asked the Commons Scottish Affairs Committee to formally question both parties about their roles in the company’s financial meltdown.

The MP told BBC Radio Scotland he wanted HER’s chairman and HBOS’s chairman and chief executive to “stand in front of Scottish MPs to answer questions we all want to hear”.

His call came after Sir Clive broke his silence, accusing the bank of pulling the plug on Farepak for the sake of a £1.5m (€2.23m) funding shortfall, and failing to ringfence savers’ money before the company went into administration.

Speaking to the Sunday Telegraph, he also said HBOS rejected five proposed rescue packages for the troubled company between May and October last year.

Responding to the allegations of failing to ringfence savers’ money and rejecting financial support, a HBOS spokesman said: “The EHR directors would have been aware that any request by them to ringfence Farepak customer monies was not a serious request on their part.

“That money had already been used by them; there were no funds to ringfence.”

The bank added: “HBOS stood behind EHR, its customer and the owner of Farepak, right through a difficult five months when the company had significant financial problems.”

Later Mr Devine attended a vocal meeting of around 150 Farepak customers in his constituency of Livingston.

He reiterated the need for both the management and bankers to the collapsed group to be called to account.