Monday, 26 April 2010

Is incompetence a good enough qualification to be a director?


So the customers of Farepak are to receive 15p in the £ for their losses. Does that really make up for over 3 years of misery, heartache, and uncertainty?


It must have been the easiest company to run from a cash flow perspective. Farepak customers placed their orders and paid for them in advance. The directors knew pretty accurately, what quantities of goods (mostly vouchers) they would need to order and should have had the money to pay for them.

It really does take a special kind of idiot to cause a company like Farepak to run out of cash.

Sadly, the new directors: William Rollason, Nicholas Johnson et al thought they knew it all. They would be better off spending that money on other things, such as Kitbag, I Want one of Those, Cabouchon and a new TV company, EezeTV. Did it never occur to them that to blow all their cash on such a spending spree within a period of 3 years, would leave them slightly embarrassed when it came to paying the bills?

I could, maybe, have had a little sympathy for them if they had come from a world away from finance. But William Rollason is, I'm ashamed to say, a Chartered Accountant, trained at one of the largest firms of accountants in the world, KPMG. He, of all of them, should have known better. And, where were the finance directors in all this? Why weren't Chris Hulland and Stevan Fowler putting the brakes on?

Don't go blaming the directors of Farepak, the subsidiary either. They had very little say in how the business was run. The strings were firmly pulled from the top. I know, I was there!

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