The private equity company that owned City Link when it collapsed at Christmas last year has described a critical report by MPs as “outside the normal rules of natural justice”.
In a letter to MPs – sent as parliament was dissolved for the general election – the former owners of the delivery service described findings that it deliberately misled workers as hurtful and unjust. They complained they were not allowed to formally respond to the report by the business committee and the Scottish affairs committee before it was published a week ago.
Better Capital, run by veteran venture capitalist Jon Moulton – said that it had been denied the right to a fair hearing when the committees published a report into the events running up to the collapse of City Link, through which more than 3,000 workers lost their jobs last Boxing Day.
“We appreciate that you operate outside the judicial framework but are dismayed that you chose to operate outside the normal rules of natural justice,” the firm wrote.
The report said City Link took a deliberate decision not to inform employees and contractors as to the true intentions and position of the company and that this was in the financial interest of Better Capital.
Moulton, in the letter to MPs, took issue with this being described as “a deliberate deception by omission”. “This accusation was not put to us and we had no opportunity to respond to this hurtful and unjust labelling,” Moulton wrote.
He argued that, contrary to the views of the MPs, if City Link had ceased trading before Christmas on 22 December it would have been financially better for the owners. But to do so ran the risk of hundreds of thousands of Christmas parcels not being delivered and staff not being paid in the runup to the festive break.
This point that the company benefited “was not put to Better Capital and we do not believe you received any evidence to support your statement – indeed we would have argued that its converse is true. Better Capital actually risked a reduction in the value of the security for its debt from supporting a continuation of trade to December 24th,” Moulton wrote.
The MPs are no longer in parliament and it is not clear who will sit on the committees after the general election. But Moulton said: “We would welcome an opportunity to make our case that these serious assertions as to our behaviour are unfounded and unfair.”
On the day the report was published, Better Capital said the accusations it had deliberately avoided telling employees about the company’s problems were ill founded. It described its choice to keep trading over Christmas as “a deliberate and brave decision”.
