Pair linked to Flyglobespan collapse as E-Clear row rages

Published on Sunday 27 December 2009 20:42

ADMINSTRATORS for Flyglobespan last night remained in dispute with its credit card payment company E-Clear over funds owed to the failed Scottish airline, as two prominent City figures were linked to the secretive Cyprus-owned firm.

&#149 Flyglobespan was said to be owed 34 million by E-Clear before it went into administration

Although E-Clear's sole director is listed as Elias Elia, a Greek Cypriot property developer, the firm confirmed it has an unofficial advisory board that counts financier Derek Tullett and former Tory party grandee Sir Edward du Cann among its members.

E-Clear is the company accused of withholding as much as 34 million from the airline, which went into administration in the week before Christmas, stranding 4,500 of its customers abroad and resulting in the loss of 550 jobs.

Another firm controlled by Elia, Allbury Travel, also went into administration a few days after Edinburgh-based Flygobespan.

Bruce Cartwright of Flyglobespan's administrators, PricewaterhouseCoopers, has requested that E-Clear put aside 34m in customer payments believed to have been due to Flyglobespan while it works out an agreement. Last night PwC confirmed E-Clear has not yet complied.

Over the weekend, E-Clear confirmed Tullett and du Cann's involvement with the group. It is also understood Tullett is a shareholder in German-based NF Bank, owned by E-Clear. In its most recent accounts to the end of February 2008, the firm owed 7.7m to NF Bank.

Tullett founded broking firm Tullett Prebon and is a prominent Labour Party funder, while du Cann, who was declared bankrupt in 1993, was a leading Conservative party figure in the 1970s and 80s.

E-Clear, which is controlled by Cyprus-based E-Clear Global, provided credit-card payment services to Flyglobespan as well as other airlines and travel firms that have also since failed, including Zoom Airlines and XL Leisure.

Elia was also behind a potential rescue of parent group Globespan through a Jersey-based investment firm, Halcyon. It is understood Globespan creditors received letters from Elia promising up to 10m before Christmas. These never materialised. Globespan failed leaving millions owed to firms including American aircraft leasing firms GE Commercial Aviation Services and CIT Aerospace.

E-Clear previously claimed it withheld the funds as it could not get business risk insurance on its dealings with Globespan.

As much as 20m of the withheld funds were understood to be for Globespan flights that had already taken place, and so not subject to cancellation claims, although E-Clear has denied it was holding on to funds unduly.

The group said it was "necessary to retain a certain level of funds to insure future exposure" even if flights had already gone ahead.

A spokesman for E-Clear confirmed it had failed to get insurance since March 2008, which left the card payment company "vulnerable" to paying out to Globespan customers in the event the airline failed.