The House of Commons’ Business, Energy and Industrial Strategy Committee has announced the probe into the tour operator, which will also look at the accounting practices and audits carried out by the operator’s auditors PwC and EY.
Committee chair Rachel Reeves said: “Amid the frustration of holidaymakers and the misery of thousands of staff losing their jobs, the collapse of Thomas Cook has uncovered what appears to be a sorry tale of corporate greed, raising serious questions about the actions of Thomas Cook’s bosses and their stewardship of the business.
“This latest corporate failure has shone a light once again on the use of aggressive accounting methods to aid bumper payouts to company executives and the apparent inability of auditors and regulators to curb these practices.”
The committee’s investigation, which is set to begin in October, will look into the reasons for the operator’s collapse, with Cook’s chief executive Peter Fankhauser, finance director Sten Daugaard and chairman Frank Meysman being asked to appear before MPs.
“The committee is dismayed that similar issues we identified in the collapse of Carillion and BHS may have occurred at Thomas Cook, including the role of auditors in identifying and addressing problems,” added Reeves in a letter to business secretary Andrea Leadsom.
The full terms of reference for the inquiry are:
- The management, governance and stewardship of Thomas Cook Group
- The remuneration policy and practice of Thomas Cook Group
- The accounting practices of Thomas Cook Group and the audits conduced by PwC and EY
- The role of regulators such as the Financial Reporting Council and Insolvency Service following Thomas Cook Group’s collapse
- The impact of the collapse of Thomas Cook Group on small businesses and suppliers, and the support available