What the NIFA member had to say on the collapse of a Christmas savings company
Member: Nifa
When a Christmas savings company collapsed, BBC News turned to NIFA for specialist advice to find out why it happened.
Farepak borrowed £34 million pounds from bankers to buy the savings business but three years later sold it for less than an estimated tenth of what it had paid. The loan was called in and the company went into administration without offering its customers compensation.
Forensic accountant David Winch told the BBC the action was "a serious wound to a company of this size" and a major loss for its parent company.
He added that this was compounded by the parent company rushing into buying three new businesses before waiting for their investment to mature and make a profit.
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