Following the statement today by Andrea Leadsom, Secretary of State for Business, Energy and Industrial Strategy, which included news that Thomas Cook only took out insurance cover for the very largest personal injury claims and for other claims they decided to self-insure through a provision in their accounts, Rachel Reeves, Chair of the Business, Energy and Industrial Strategy Committee said:
"This discovery by the Official Receiver that Thomas Cook decided to self-insure through a provision in their accounts raises, once again, serious questions about the judgement of Thomas Cook management. I hope the Official Receiver will now seek to fast-track its investigation into Thomas Cook directors rather than leave these parties free to pick up lucrative jobs elsewhere when there are such serious reservations about their conduct. How did auditors wave through these arrangements? Did EY challenge management on these provisions? Auditors must be brought to book when they fail to challenge management when scrutinising company accounts.
"It's absolutely right that a statutory compensation scheme is set up for those facing serious hardship but, once again, it is the taxpayer who is on the hook for clearing up the mess caused by Thomas Cook management."
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