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E-Clear refuses to place £35m into joint account

The administrators of failed Scottish operator Globespan have described the amount held back by its credit card processing firm E-Clear as “excessive”.

This morning, PricewaterhouseCoopers (PwC) issued an update for the first time since a statement before Christmas that said it had requested E-Clear to place £35 million it owed Globespan into a joint account.

PwC has confirmed this request has been “refused” and it has been given no justification why E-Clear should be holding on to such a large amount.

The administrators estimated that E-Clear’s exposure to Globespan customers, who have not already travelled, was only £15 million.

Joint administrator for Globespan at PwC Ian Oakley-Smith said: “In the period since we were appointed administrators of Globespan, we have repeatedly asked E-Clear to confirm the level of funds they hold that have been received from Globespan customers.

“Globespan records indicate that some £35 million is being held – but no details to support the funds have been provided by E-Clear.”

“Before Christmas, the administrators requested the funds be placed into a joint account and this request has so far been refused.”

PwC added that it understood why E-Clear might want to hold on to customers’ cash to protect it in the event of a client failing, but considered £35 million in the case of Globespan to be “excessive”.

Liability for flights that were not taken was estimated at £15 million and, although PwC accepted E-Clear might want to hold onto more cash in case of claims from unsatisfied customers, it said E-Clear has not confirmed if this was part of its calculations.

Speaking exclusively to Travel Weekly before Christmas, E-Clear chief executive Elias Elia claimed talks with PwC were progressing well and he was confident of a positive outcome.

He denied E-Clear caused the Globespan collapse by holding on to its money, an allegation made by Scottish politicians who have demanded an inquiry.

Elia was also asked to explain another dispute he had with Harry Goodman-owned Totally Travel earlier in the year with which he eventually settled a £200,000 debt after signing a personal guarantee.

However, the Civil Aviation Authority was preparing to pull Globespan Group’s ATOL licence in the weeks before it collapsed, it has emerged.

The watchdog had written to the Scottish airline and operator asking to see evidence of an injection of funds immediately, according to leaked documents seen by Scotland on Sunday.

A CAA spokesman said: “This was not a one-off warning – as a regulator we keep a close eye on the finances of companies. We worked with Globespan closely in the last few months but in the end there wasn’t a way forward.”

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