BUSINESS NEWS
on Tomas Cook’s balance sheet, allowing the world to think the business was more solvent than it was”. But he said: “Lessons are never
learnt because there is too much money at stake.” Tere will be similar problems
in businesses, Jacobs argued, “until there is serious governance; until it is stipulated that boards have people on them who understand the business they preside over”. He said: “In politics, you can be
complexity and dysfunctionality of the UK business.” Jacobs explained: “Two things
made the UK business highly dysfunctional – Airtours and the agencies. Tomas Cook UK didn’t know whether it was a travel agency business or a vertically integrated travel group, and nobody had really tackled that. Culturally and institutionally it was a travel agency business. Structurally it was a vertically integrated business.” He acknowledged: “Te problems
predated the takeover of Airtours. Tomas Cook was always struggling to work out what it was. It had been a travel agency business, with business travel and foreign exchange. Tat was another mistake – selling off the foreign exchange business [in 2001] and the corporate travel business [in 1994]. Tere was a catalogue of mistakes.” But he insisted: “Tere is always
a tipping point, and the tipping point was the acquisition of Te Co-operative Travel. It set the business on a highly flawed path when the business should have been reducing its high street agencies, streamlining its call centres and becoming a more online business.
travelweekly.co.uk The real issue was
failing to put people into the business who understood what was wrong
“Te period 2011-12 was critical
and it needed the right actions taken. We recognised then that failure to take the right action would end in failure [of the company].” Jacobs added: “People can
criticise [former chief executives] Manny Fontenla-Novoa, Harriet Green and Peter Fankhauser. It’s easy to atack what these people were paid and the mistakes they made. But it is the duty of the chairman and the board of a publicly listed company to take care of governance and shareholder interest. “To allow strategic decisions
that worsened the situation and to pay people bonuses for doing so is the fault of the chairman and the non-executive directors.” Jacobs is also critical of the
accountancy firms “which year in, year out allowed such a high level of intangibles [assets] to remain
foreign secretary and know nothing about geography or defence secretary and not be able to fire a gun. In business, you have chairmen and directors not able to understand a business and relying on consultants and their reports. “People need to be held
accountable. It’s easy to stoke a witch-hunt, but it will achieve nothing. It’s not the fault of the executives. It’s the fault of those who were supposed to manage them. “Te real issue with Tomas
Cook was failing to put people into the business who understood what was wrong – regardless of whether it was me and Terry. It’s tragic for the employees, for the businesses and for suppliers, and it need not have happened.”
THOMAS COOK TIMELINE 2011-12
JULY 2011: Group issues third profit warning in 12 months (after two in August and September 2010). Competition Commission gives go-ahead for Cook/Co-op merger AUG: Chief executive Manny Fontenla-Novoa resigns. Sam Weihagen takes interim role SEPT: Frank Meysman appointed to be chairman from December OCT: Cook agrees £100m credit deal with banks; completes merger with The Co-operative Travel NOV: Suspends results announcement pending fresh deal with banks. Announces £200m credit deal DEC: Full-year results show UK contributes just 10% of group profits MARCH 2012: Meysman rejects takeover rescue proposal APRIL: Cook confirms fresh talks on refinancing MAY: £1.4bn refinancing; finance director steps down; Harriet Green appointed chief executive JULY: Green takes up post
WHAT THE PAPERS SAID
The Financial Times, March 15, 2012, reported: “The chairman of Thomas Cook has rejected a proposal by a group led by two
leisure industry veterans and backed by some shareholders of the travel operator to inject £400 million into the company.
“Frank Meysman dismissed the plan after representatives of the group met the Thomas Cook chairman two weeks ago…The plan had the support of Invesco, second-largest shareholder with 10.44%, and several other
shareholders. “The group of investors includes travel industry veteran Terry Fisher, formerly of Airtours who sold tour operator Gold Medal to Thomas Cook in 2008 and ran its scheduled business before resigning in 2010. Other backers include Clive Jacobs, who founded leisure car rental business Holiday Autos and is owner and chairman of Travel Weekly Group.”
3 OCTOBER 2019
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