- When firm went into administration cash was used towards repaying the bank's 31million loan
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Anger: Thousands of Farepak Christmas hamper customers were cheated out of justice yesterday
Thousands of customers who lost money in the Farepak Christmas hamper firm scandal were cheated out of justice yesterday.
As a high-profile court case against the directors of the failed firm collapsed, it emerged that bankers had referred to customers' cash as 'Doris money'.
It was also revealed that bankers, HBOS, twice refused to protect 4million saved by customers, mainly on low incomes, to buy a hamper.
The Insolvency Service abandoned its five-year Farepak investigation after extraordinary new evidence showed that HBOS turned down the option of placing the money in a trust.
This meant that when the firm collapsed into administration in 2006 the cash was used towards repaying the bank's 31million loan rather than refunded to Farepak's vulnerable customers, many of them elderly.
More than 150,000 customers who had paid regular instalments for a Christmas hamper were left on average 400 out of pocket and offered just 15p in the pound.
Hugely embarrassing emails from senior bankers at HBOS, which is now owned by Lloyds Banking Group, showed they referred to the cash from Farepak's vulnerable customers as 'Doris money'.
The new evidence will heap further pressure on Peter Cummings, known as the banker to the stars of the financial world, who was handed a 'warning notice' and punitive fine by the Financial Services Authority in April as part of its investigation into HBOS.
It has been reported that Mr Cummings, who is challenging the FSA's rebuke, had been the 'ultimate arbiter' of what happened with Farepak.
This is the second collapse of a case brought by a government department this week – the Insolvency Service falls under the responsibility of the Department of Business.
Rich pickings: When the firm went into administration in 2006 the cash was used towards repaying the bank's 31million loan not vulnerable customers
On Monday the Serious Fraud Office dropped its investigation into property tycoon Vincent Tchenguiz.
On Farepak, lawyers representing the Insolvency Service had asked Mr Justice Peter Smith in the High Court to disqualify its former bosses from being company directors, accusing them of 'unfit conduct'.
The former bosses, including Sir Clive Thompson, an ex-president of the Confederation of British Industry, contested the disqualification applications.
But yesterday the government's companies watchdog abandoned its bid to penalise the directors after the new evidence emerged that included the fact that they had twice tried to protect the cash of customers.
Business Secretary Vince Cable said he felt 'huge' sympathy for 'those who lost out' and would reflect on the decision by the Insolvency Service.
A spokesman for Lloyds Banking Group said: 'As this matter is subject to ongoing legal proceedings, it would be inappropriate to comment.
'We have assisted the relevant authorities at all times during their investigation of European Home Retail plc and Farepak and the conduct of their directors.'
TEXT-Fitch affirms Clock Finance No. 1 BV - Reuters
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Rangers crisis: Ibrox season ticket renewal money held by 'oldco' - Stv.tv
Ibrox season ticket renewal money is being paid into and held by the soon-to-be-liquidated 'oldco' Rangers.
The Sevco group that formed a new business entity to purchase the club’s assets confirmed it is using Rangers FC plc, incorporated in 1899, to receive any season ticket renewal cash paid over.
Rangers claim the money is being held by the old company, which is still under the control of administrators Duff and Phelps, and will be later transferred to new business entity, Sevco 5088 Limited, as part of the deal reached with the consortium led by Charles Green.
Direct debit payments for around 30,000 season tickets are being processed after renewals were sent out by the club on June 8.
A spokesman for Rangers said: "The season ticket renewal direct debits have been operated within the old company until they are transferred to the new company in an ongoing process that will be completed in due course."
Mr Green previously stated that the season ticket renewal cash was not being used to fund his consortium’s takeover and that it would be ring-fenced and held in a "secure" account.
In the failed company voluntary arrangement (CVA) proposal, Duff and Phelps sought those owed money to approve that all season ticket sales and player transfer cash to be held in a bank account by their English solicitors Taylor Wessing. They sought creditors permission to the exclude this money from the payout pot, while they also stated in the CVA proposal that they may seek Sevco’s approval to use the cash to meet "trading costs" should the club have successfully agreed the pence in the pound plan.
On Thursday, the Rangers’ Fans Fighting Fund released a statement after its representatives had met with newco chief executive Mr Green and chairman Malcolm Murray.
In a statement the fund said it had "received satisfaction on the future security of the property assets, forward flow funding and the ring fencing of season tickets for the good of the club."
The fund, which is led by former player Sandy Jardine and at was launched by ex-manager Walter Smith, said it "would encourage fans to renew their season tickets at this time to demonstrate our support for our manager Ally McCoist his management team and our players."
On the back of the meeting, the fund called on supporters to "show solidarity for the club".
Mr Green added: "I can reassure all fans that season ticket money will be ring-fenced in a secure account and will not be used before the current issues surrounding the club, such as what league we will be playing in, are resolved."
Mr Green’s consortium, which is backed by investment banking operation Zeus Capital and Scottish golf clothing firm Glenmuir among others, paid £5.5m to buy the club’s assets, cover the £3m fees of Duff and Phelps and an estimated £1m for the future liquidators of Rangers FC plc, BDO. According to the CVA proposal document, this money will be supplemented by around £2m in outstanding transfer fees owed to Rangers and the cash at bank.
According to the administrators, who were appointed on February 14 after the club had failed to pay around £14m in PAYE and VAT to HMRC following Craig Whyte's May 2011 takeover, around 37,900 season tickets were sold at Ibrox for the 2011/12 season.
Mr Whyte used future season ticket sales to secure £25.3m from London firm Ticketus to effectively fund his takeover by wiping out the club's £18m debt to Lloyds Banking Group.
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Greek finance job goes to civil servant - Financial Times
June 20, 2012 7:28 pm
Finance access for small firms 'eases' - BBC News
More small and medium-sized businesses (SMEs) in Scotland are successfully applying for finance, according to a Scottish government survey.
The SME Access to Finance report found 87% of firms were able to access all of the money they were seeking - up from 79% in the last survey in 2010.
There was also a fall in the number of outright rejections by banks.
But there was a marginal rise in the proportion of firms who secured none of the money they were seeking.
The Scottish government said the survey provided "some evidence of an easing in supply constraints".
The survey indicated a rise in demand for finance across nearly all sectors, with 9% of all firms seeking new and/or additional lending and a third of all firms looking to renew existing facilities.
Manufacturing and construction were among the sectors with the highest application rejection rate.
The latest survey suggested demand for finance had remained broadly stable since the last survey in 2010, with 45% of firms looking for credit over a three-year period to 2012. That compared to a figure of 43% in the three years to 2010.
Finance Secretary John Swinney said small and medium-sized business were "the lifeblood of the Scottish economy".
He continued: "Collectively they employ over one million people and account for around 54% of total employees in Scotland's private sector.
"Any evidence of increased lending to SMEs is good news for our economy and will be a key element in building a sustained recovery."
Mr Swinney said lending criteria were stricter now than in the past but the latest figures showed that accessing finance was still possible.
"Businesses must present a robust, commercially sound proposition," he said.
"Companies can come to our agencies or Business Gateway for advice and information before they even approach the banks and I would urge them to make use of all of the services available."
Lending callEarlier this year, Mr Swinney urged the UK government to do more to accelerate bank lending for SMEs.
His call followed UK Treasury data indicating Scottish SMEs received less than 5% of lending from a project set up by the UK government and five major banks.
Under Project Merlin, banks committed to making £190bn of new credit available in 2011.
Scottish SMEs took 4.8% of gross lending, but accounted for 6.4% of UK SMEs.
In March, the UK government introduced a £20bn National Loan Guarantee Scheme, aimed at boosting bank lending to SMEs.
MONEY MARKETS-Euribor slips as ECB cut expectations grow - Reuters
* Euribor, euro Libor both fall, seen sinking further
* ECB rate cut expectations stoked by Coeure comments
LONDON/FRANKFURT, June 21 (Reuters) - A growing conviction that the European Central Bank will cut interest rates pushed interbank borrowing costs lower on Thursday, with markets pricing in a slide to record lows.
Three-month Euribor rates, traditionally the main gauge of bank-to-bank lending and a proxy for the direction in which the ECB's refinancing rate is headed, eased to 0.655 percent from 0.657 percent.
The interbank market is awash with cash injected by the ECB, depressing Euribor rates to within 2 basis points of their lows but analysts expect rate cut speculation to drive rates lower before the next policy meeting on July 5.
The euro zone's struggling economy is putting additional stress on countries struggling with a debt crisis that currently threatens Spain's ability to raise funds from the market and is piling pressure on the ECB to act.
"I can't see the world changing sufficiently to derail market belief that the ECB will provide another cut," said Eric Wand, strategist at Lloyds Bank in London.
"Put it this way, if the ECB stays where it is, the market would take it pretty badly. It seems like a cut is in the offing."
The euro-denominated Euribor rates pushed lower after fresh hints from ECB policymakers that the bank's deposit rate could be cut, a move that would open up room for a further drop in market rates. Banks will only lend in the open market if borrowers are prepared to pay more than the ECB.
ECB Executive Board member Benoit Coeure said on Wednesday in an interview with the Financial Times that rate cuts remained an option and would probably be discussed at the next meeting, but that any move would not be a cure-all.
Euribor futures edged higher with contracts dated out to the end of the year rising by around two ticks. Prices imply Euribor falling below the record of 63.4 bps by next month, reaching as low as 51 bps by December.
Three-month euro Libor, fixed by a smaller panel of banks based in London, also fell to set a new low at 0.56479 percent.
Technical analysis by Futurestechs showed the outlook for the March 2013 contract, currently trading at 98.465, was bullish and protected by solid support around 9 9 .34 - a rising trendline between recent lows.
Expectations of a cut to the ECB deposit rate - the amount of interest paid on cash parked overnight at the bank - were reflected in the market for fixed-term Eonia.
Lending at a fixed-term Eonia rate for anything longer than two months requires offering a price below the 25 basis points currently on offer at the ECB. The three-month Eonia rate was last at 21 bps.
Why did they do it? Because they were allowed to and more or less knew nothing would happen. Does anyone actually think these people don't think out what could happen to them before they do anything a bit 'iffy' and take expert advise on such?
- PC, Liverpool, 21/6/2012 15:24
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