CITY LINK SCANDAL CONTINUES

RMT helpline 0800 376 3706 :: february 2016 :: RMTnews 12 City Link owners Better Capital group charged the courier company £345, 141 in consultancy fees just months before its collapse on Christmas Day 2014, putting 2,700 staff out of work. The Times newspaper has revealed that accounts lodged at Companies House by Better Capital LLP show that it received “director’s fees and expenses from City Link Limited”. This is on top of the £428,015 in fees that Better Capital claimed from City Link in the previous year. Better Capital’s results also revealed that its 11 equity members shared an average profit of £211,146 each with one member receiving as much as £470,000 in the 12 months to the end of March last year. RMT general secretary Mick Cash said that the fact that Jon Moulton's Better Capital outfit extracted a massive £350,000 in "consultancy fees" while City Link was teetering on the brink of collapse showed that this was a corporate scandal that was refusing to go away. "With the management knowing that City Link was going under they encouraged drivers to work through Christmas Eve in the knowledge they wouldn't get paid while they were busy lining their own pockets. It's another vicious kick in the teeth for the nearly 3000 workers at City Link dumped on the stones. "This news shows again the raw and uncontrolled nature of bandit capitalism in Britain and RMT will continue to fight for a shift in the law that protects workers and punishes bad bosses," he said. At the time the taxpayer was handed the bill for over 2,400 workers sacked and hundreds more owner-drivers, subcontracted to operate City Link vans, received no compensation at all. Three City Link directors including CEO David Smith and Better Capital executive Thomas Wright got round paying the redundancy bill by lodging papers at Companies House in early 2015 for a firm named ‘City Link B2b’. At the time Labour MP Michael Meacher said that the scandal was “a modern form of private equity asset-stripping”. He said that Jon Moulton had transferred basic redundancy rights to be funded by the taxpayers and used a secured loan as investment to ensure that he would rank ahead of staff when the proceeds from the liquidation came to be distributed. “As a result he now expects to screw off £20 million from the liquidation while leaving nearly 3,000 workers high and dry,” he said. Mick Cash said that the whole affair was a microcosm of everything that was wrong with business in Britain, revealing how little protection workers have got and the power of bandit capitalism to protect itself. “RMT will continue to advise and represent members caught in this corporate failure while those responsible will slink away with their own resources ring fenced and leaving the taxpayer to pick up the redundancy tab,” he said. CITY LINK SCANDAL CONTINUES RMT calls for legal protection for workers following news that bosses took £350,000 in fees prior to collapse