Peer calls for investigation into finance behind failed Monarch airline

A Labour peer is calling for an investigation into the financial arrangements of collapsed airline Monarch, according to BBC News.

Lord Myners has said the preferred creditor status of Greybull Capital, which is owed £150m by Monarch, could be a matter of “fraudulent preference.” Greybull will be repaid before other creditors when Monarch’s landing slots and other assets are sold.

Greybull purchased Monarch three years ago. In the months leading up to the failure of the Luton-based company, the investment firm tried unsuccessfully to find a purchaser. Lord Myners has told peers he would like the private equity firm’s actions to be investigated.

A spokesman from Greybull Capital said: “Greybull’s involvement with Monarch since 2014 kept the airline flying and its employees in work for three years when no other rescue bid was on the table. Greybull provided significant capital to Monarch and did not receive dividends, interest or any repayments of its loans.”

The aviation minister Lord Callanan said that the administrators handling Monarch would report on the directors’ actions within three months, confirming that “if there is any evidence the directors have acted improperly we will not hesitate to take action against them.”

The collapse of the airline has made 1,800 employees redundant and left 110,000 travellers in need of rescue flights. More passengers still are seeking to recover tickets for future travel.