FORMER MINISTER CALLS FOR INVESTIGATION INTO PRIVATE EQUITY FIRM THAT OWNED COLLAPSED MONARCH AIRLINE
A former City minister has called for an investigation into the private equity firm that owned Monarch.
Greybull Capital is owed about £150m for loans made to the airline, but as a preferred creditor it will be first in line to be repaid when assets such as airport landing slots are sold.
Lord Myners, a Labour peer, called for an inquiry into whether this was an issue of “fraudulent preference”. Greybull said Monarch’s collapse was beyond its control.
The firm bought the airline three years ago and had tried but failed to find a buyer for it in the months before the Luton-based company failed.
A spokesman said: “Greybull’s involvement with Monarch since 2014 kept the airline flying and its employees in work for three years when no other rescue bid was on the table.
“Greybull provided significant capital to Monarch and did not receive dividends, interest or any repayments of its loans.”
Lord Myners told peers he wanted the relevant authorities to investigate the private equity firm’s actions.
Aviation minister Lord Callanan said Monarch’s administrators had to report within three months on the actions of the directors.
The Tory frontbencher told peers: “If there is any evidence the directors have acted improperly we will not hesitate to take action against them.”
Shadow transport secretary Andy McDonald said Monarch collapsed because of a “litany of failures” by government and the Civil Aviation Authority, as well as the company’s financial backers and advisers.
The House of Commons transport committee would hold a “rigorous inquiry” into Monarch’s collapse, transport secretary Chris Grayling said.
Reforms to avoid a repeat of the Monarch collapse would also be considered, he told MPs.
About 80,000 Monarch passengers have been brought back to the UK on rescue flights, Mr Grayling said.
Recouping come of the cost of bringing home all 110,000 Monarch customers was being discussed with credit and debit card companies, he added.
Monarch’s demise has made more than 1,800 workers redundant.
The British Airline Pilots’ Association and the Unite union have both criticised Monarch for its handling of staff redundancies last week and said they would take action to ensure workers were properly paid.