Equity group in charge creamed off £350k consultancy fees
“BASTARDS” at the top of City Link “took advantage of their inside knowledge to make sure they filled their own pockets,” the chair of the parliamentary inquiry into the parcel firm’s collapse said yesterday.
When the company called in administrators on Christmas Eve in 2014, scores of workers who had allegedly been encouraged to shift to “bogus” self-employment were not even paid for their final shifts.
But the Times reported yesterday that Better Capital, the equity group which wholly owned the company, charged City Link £345,141 in “directors’ fees and expenses” through its consultancy division.
Better Capital, which as the “secure creditor” got priority over small contractors in recovering money in the wind-up of City Link, also paid its 11 equity “members” an average of £211,146 in the last financial year.
Former MP Ian Davidson, who chaired the Scottish affairs select committee inquiry into City Link’s collapse, said the news “seems highly suspicious.”
He told the Morning Star: “Better Capital themselves got their debts paid by the collapsing City Link while others they were in debt to were left high and dry.
“This sounds like they took advantage of their inside knowledge to make sure they filled their own pockets. Bastards.”
Better Capital wrote to City Link in September 2014 saying that its “current intention” was to continue funding the firm for another 12 months.
Grilled by Mr Davidson in January last year, Better Capital boss Jon Moulton said this was different to a “firm commitment.”Tory MP Brian Binley accused Mr Moulton of “trading illegally.”
Transport union RMT, which represented City Link staff, said yesterday that the consultancy fees represented “a vicious kick in the teeth for the nearly 3,000 workers at City Link dumped on the stones.”
General secretary Mick Cash said: “Today’s news shows again the raw and uncontrolled nature of bandit capitalism in Britain and RMT will continue to fight for a shift in the law that protects workers and punishes bad bosses.”
Better Capital did not respond to a request for comment.