EuroManx collapse: Chief Minister says government took “appropriate and responsible action” – but did they?

Chief Minister Tony Brown insisted this morning (Tuesady 17th June), during Tynwald ‘Question Time’, his government had acted appropriately and responsibly in trying to buy time for EuroManx to “sort itself out”.

Mr Brown also maintained that his government had been trying to protect the public by allowing the owners of EuroManx an opportunity to sell the business and remain flying.

However, in answering a supplementary question from Eddie Lowey MLC, Mr Brown made the incredible statement that the government had taken the decision to deny to the public information that they knew, in late 2007, the airline was in severe financial difficulties.

His exact words were: “and certainly we did not wish to alert the public, at that time,…”

As a result of this decision several thousand customers continued to purchase tickets, some for travel several months in advance of flying, and they now face the possibility of losing their money.

Some ticket holders, for flights prior to 31^st July 2008, may be able to transfer to other airlines. Customers who purchased using a credit card should be able to reclaim the money from the credit card company, and likewise customers with comprehensive travel insurance should also be protected. However, all other customers will have to join the long line of unsecured creditors of a company with few or no assets; and realistically they have no hope of recovering their money.

A liquidator’s sale has been advertised in the press but interestingly the Attorney General, in answering questions from Peter Karran MHK, stated that a search at the Registry had turned up the fact that no formal ‘liquidation’ had been registered.

In answering further questions from Mr Karran, the A.G. made it clear that whatever assets that do exist are already mortgaged to the hilt and, therefore, there would have been little point in the government trying to take a charge on them.

However, whilst he confirmed advice had been sought and given to government prior to the collapse of the airline, he declined to make it available to the Court.

Treasury Minister, Allen Bell also faced questioning as to whether any additional financial support was given to EuroManx, other than allowing them ‘extended credit’ on government debts.

Whilst not admitting to allowing the airline ‘extended credit’ Mr Bell stated that no other support was given; and later informed the Court that the ‘loss’ of revenue, for the waiver of Air Passenger Duty, already ‘paid’ by EuroManx customers, could amount to an additional £200,000.

Although not directly related to this issue a later Question, directed to the A.G., in respect of recovery of debts through the Coroners’ offices, he suggested customers should make whatever inquiries necessary to ascertain how financially secure a company is before conducting any business with them.

This may be fine advice, but realistically how many members of the public have the time, or the knowledge, to conduct company searches etc.

And what would be the point?

IOM companies have no requirement to file accounts for public scrutiny and information on UK registered companies is not so readily or affordably available to all members of the public.

EuroManx had not filed any accounts for more than 2 years; which, perhaps, in itself may have been a sufficient warning sign; as was the knowledge that the previous parent company, Corporate Jet Realisations/Services Ltd. went bust owing over £100m.

Although the government wants to try to persuade the public they did all they could to ‘protect’ their interests, the evidence which continues to come to light, demonstrates that they are poorly mistaken.