Get involved! Send photos, video, news & views. Text SWINDON NEWS to 80360 or email us
Auditors of collapsed Swindon firm Farepak face investigation
A CAMPAIGN group representing the victims of Farepak has welcomed the news that auditors of the Christmas hamper firm are facing disciplinary action.
The Financial Reporting Council has alleged that Ernst and Young and its auditor Alan Flitcroft fell short of their professional duties in vetting the accounts for the year up to the end of April 2005.
Farepak, which was based in West Swindon, collapsed in 2006, leaving 114,000 people with losses totalling £37m.
Suzy Hall, national campaign co-ordinator for Unfairpak, said: “In 2006 Unfairpak asked the question ‘what about the auditors?’ “We are very happy that the auditors are being investigated because it looks as though Farepak should never have traded in 2006.
“As a team we are extremely happy that this is being looked at and is being taken seriously by professional bodies. Farepak is still not finished.”
The FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK.
Farepak collapsed in 2006 leaving no money available to creditors.
However, liquidators BDO confirmed earlier this year that a payment of about 32p to every pound would be made.
When added to the 17.5p in the pound given by the Farepak Response Fund charity, set up by the Government in 2006, customers have received about half of what they were owed, according to BDO.
The Ernst and Young case will be heard by an independent disciplinary tribunal, but the date is yet to be released.
A spokesman for Ernst & Young said: “Ernst & Young can confirm that it has received notification that the Executive Counsel of the Financial Reporting Council will be proceeding with a formal complaint against Ernst & Young, in relation to our audit of Farepak for the year ended April 28, 2005.
“We obviously take these matters extremely seriously, but it would be inappropriate for us to comment further before the tribunal.”