Following my written statement on Farepak of 10 December, I would like to report to the House that the investigation into Farepak and other companies in the European Home Retail group has been completed.
The investigation has taken longer than expected to complete because it involved collecting and often reconstructing the financial and other records of a group of companies, including Farepak, which had ceased to trade and were in administration. The report is over 700 pages long and could lead to court proceedings, so taking short cuts in the investigation was not an option.
Legal advice is being obtained on the report to decide what further action is merited. This is a process which must be carried out confidentially to avoid prejudicing any action that may result and to protect the reputations and interests of those whose conduct is being scrutinised, but in respect of whom no decisions have yet been made. As I said in my earlier statement, if proceedings are taken against any party involved, this will become public knowledge if or when the case reaches open court. We will do everything in our power to process this quickly.
The report cannot in any case be published because there is no provision for reports carried out under the Companies Act such as these (under Section 447) to be published. In fact unauthorised disclosure is a criminal offence.
The Government have great sympathy with those people who have lost money they saved as a result of the collapse of Farepak. We are doing all we can to prevent other families suffering similar problems in the future. BERR has worked with the remaining hamper companies to put in place effective protection for customers’ prepayments. The Government have given the OFT funding for a new awareness campaign so that consumers are better aware of their options for Christmas savings. My Department is now considering the report, alongside other advice received, to assess whether further action, including possible new regulation, is necessary in the light of the action which has been taken by the surviving Christmas savings schemes.
The report is also being disclosed to the Accountancy and Actuarial Discipline Board (AADB) to assist in the investigation that it announced in June 2007 into the role of accountants within Farepak and other companies.