Boss Faces Questions About City Link Failure

The founder of the parent company of collapsed parcels firm City Link has been given a grilling by MPs over the way thousands of workers heard on Christmas Day that they were losing their jobs.

MPs from two select committees lined up to deliver a series of damning attacks on Jon Moulton, founder of Better Capital.

He insisted everything had been done to save the company from going into administration, but said the timing of the collapse was a "public relations disaster waiting to happen''.

Mr Moulton told a joint meeting of the Scottish Affairs and Business Select Committees that his company lost £20 million after City Link went out of business.

He said the intention was to tell staff on Boxing Day that the company was going into administration, timing which was ``less evil'', but rumours started circulating on Christmas Eve.

"Absolutely no-one wanted the announcement to be made on Christmas Day,'' he told MPs.

Labour MP Ann McKechin said the way the administration was handled was "utterly chaotic'', telling Mr Moulton that he must have known in November that it was possible the firm would go out of business.

She accused him of not making any plans in place to make sure workers were dealt with "decently.''

Conservative MP Brian Binley questioned whether City Link was trading legally in the time before it went into administration.

Mr Moulton replied: "That is an extremely serious allegation.''

Mr Binley said he was covered by Parliamentary privilege.

"It is a good job you are,'' said Mr Moulton.

Mr Binley said Mr Moulton had come out of the saga in a "good situation'' compared with employees.

Mr Moulton said his company had lost #20 million, revealing that former employees will have to rely on the state for payments estimated to total #4 million.

There had been negotiations in the first three weeks of last November to try to sell City Link, said Mr Moulton.

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