E-Clear, the credit card company that withheld £35 million from the collapsed airline Globespan, had already spent nearly half that amount on buying a loss-making German bank, The Times has learnt.
Accountants clearing up Globespan’s affairs have said that the missing money was a significant factor in the Edinburgh-based airline’s demise.
Accounts seen by The Times show that E-Clear acquired a 48 per cent stake in NordFinanz Bank, based in Bremen, in 2007. The shareholding was increased to 97 per cent in 2008.
The bank’s annual accounts for 2008, which record an accumulated loss of €3.8 million (£3.35 million), state that the shareholding was worth €17.4 million (£15.3 million).
The transactions covering the build-up of ownership of the bank include ones made last year, when Globespan was running short of money and struggling to survive.
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E-Clear is due to appear at the High Court in London today to contest an order sought by the accountants Price waterhouseCoopers (PwC) to put the company into administration.
Lawyers will also discuss evidence that E-Clear still has the £35 million owed to Globespan which the court ordered should be provided to it by noon last Friday. Neither E-Clear nor PwC were prepared to comment yesterday on the submissions made.
The Globespan group collapsed last month, with the loss of 650 jobs, and left 4,500 holidaymakers stranded abroad. It emerged that E-Clear withheld about £13 million for travel booked after Globespan collapsed — which is now owed to disappointed holidaymakers — and a further £22 million for travel and holidays that did take place.
E-Clear has said that this was because of the need to cover for the possibility that some passengers might claim back some or all of the money as compensation for flights that had been delayed or not delivered by Globespan.
E-Clear’s business requires a banking partner, which until 2008 was provided by a subsidiary of Deutsche Bank. But then, because of a rearrangement of its business, Deutsche Bank ended the relationship.
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E-Clear is run by Elias Elia, a Greek Cypriot who also sits on the board of NordFinanz. Because of regulations concerning foreign ownership stakes in German banks exceeding 50 per cent Mr Elia is not allowed to use his voting rights as the majority shareholder.
BaFin, the German financial regulator, ordered that his voting rights should be handled by a courtappointed trustee. It also ordered E-Clear to put an extra €3 million (£2.7 million) capital into the bank last year. This was to meet concerns expressed by the auditors in mid 2008 because of the bank’s losses and “its inadequate capital resources”.
A spokesman for Mr Elia said: “It [NordFinanz] was bought by a number of investors contributing to fund the purchase. Although E-Clear has 97 per cent of the shares, there are a number of investors who did help and that is how they raised the funding.”
The spokesman added that in winding up the affairs of SkyEurope, a Slovak airline that collapsed last summer with about £13 million said to be owed to it by E-Clear, “only about £1 million is still outstanding”.