Those politicians, Trades Unions officials, and business people who have been, in varying degrees, angry about the apparently sudden collapse of the CityLink parcels delivery operation, may be about to get a whole lot angrier. Because the last Interim Financial Report (IFR) for owner Better Capital shows an operation that knew CityLink had serious problems two months earlier than has been admitted.
Jon Moulton - yet more questions to answer
Moreover, despite making claims about what was necessary to turn the business round, Better Capital, despite having the resources, did not deploy one more penny of them. And, just to add insult to injury, the owners declined to make any redundancy payments, despite their sitting on a mountain of cash. First, though, we need to understand how Better Capital is set up, which is eyebrow-raising in itself.
2009 Cell and the 2012 Cell”. CityLink’s loans came from the 2012 Cell. Why set up in Guernsey? You’ll love this one: “The Company and Cells are exempt from taxation in Guernsey and the Company is charged an annual exemption fee of £600”.
[UPDATE 1425 hours: CityLink sent its suppliers a letter around a fortnight before it ceased trading, telling them that, er, it was not going to cease trading on the day when, as events turned out, it did.
The letter, from Managing Director Dave Smith, was unequivocal: "CityLink is aware of unfounded rumours being circulated ... stating that the business will cease trading on 24th December. These rumours are untrue. Those responsible for the rumours will be pursued through our legal process whenever they are identified".
But, as Better Capital's IFR shows, CityLink was being described as "unsustainable" back in September of that year. Either Smith was lying, or someone higher up was lying to him. Either way, that's more questions for Jon Moulton and his pals to answer]