Thomson loaned failed travel agency Wardle Travel more than half-a-million pounds in 2003/04 helping it to continue trading with the operator as a preferred supplier.

ABTA demanded Wardle Travel increase investment in the business and its bond after its 2003 accounts revealed the agency was trading while being insolvent, which is against ABTA regulations.

From 2001, Wardle Travel accumulated losses of £522,126 – £256,031 in 2001, £9,573 in 2002 and £256,522 in 2003. The agency only had share capital of £362,000, which effectively meant it was insolvent.

Under ABTA rules, any company found to be trading when insolvent has the option of increasing the size of its bond or boosting investment in the company. Failure to do either would lead to its membership being withdrawn.

If claims are made on the company’s bond, then it is pulled and treated as a failure. Without any claims, an agency can continue trading as a non-ABTA member.

Thomson stumped up more than half-a-million pounds to help keep the travel agency operating under the ABTA umbrella and acting as the tour operator’s preferred supplier.

Travel Weekly understands the loan was insured so Thomson will get its money back.

News of Thomson’s previous investment in a rival retail network will surprise many. It is currently undergoing a restructure resulting in 2,000 job losses, commission cuts, shop closures and a head-office move from Greater London House to Luton.

Both a Thomson spokesman and former Wardle Travel director Mark Wardle refused to confirm the arrangement.

“We don’t discuss commercial arrangements with the trade press,” said a Thomson spokesman.

Wardle Travel finally went into administration in April this year, with Harvey World Travel buying 22 shops for an undisclosed sum.

According to a report from administrators Pricewaterhouse-Coopers, it had debts of more than £2.5 million including £510,365 owed to Thomson. Its biggest creditor was the Wardle Partnership which is owed £726,505.

Wardle said: “Thomson’s support was 150% and better than other operators.”

In January, Wardle Travel slashed its network from 52 to 40 shops and was fined £8,400 by ABTA in February for 12 counts of late payment of debts.

ABTA chief executive Ian Reynolds said: “I knew there was a very significant creditor of around half-a-million pounds, but I didn’t know it was Thomson.”