E-Clear administrators launch enquiry into missing laptops and luxury cars

Administrators to E-Clear, the failed credit card payments group blamed for the collapse of Scottish airline Globespan , have launched an investigation into the activities of its management, led by Greek Cypriot travel entrepreneur Elias Elia, raising questions over missing laptops and the ownership of a small fleet of luxury cars. In a report sent to creditors this week, administrators from BDO said E-Clear's problems stemmed from the failures, in quick succession, of travel groups XL Leisure and Zoom in the autumn of 2008. The Mayfair-based card-processing group, controlled by Elia, faced £57m in credit card chargeback demands from customers who had either been left stranded abroad or had not received a holiday they had booked with the travel firms. "As [E-Clear] did not hold significant retention monies, it had insufficient resources to meet these liabilities other than by utilising receipts in respect of other solvent merchants," the BDO report stated. Foremost among E-Clear's remaining "solvent merchants" was Globespan and BDO's report confirmed the collapse of the airline eight days before Christmas, which left 4,500 holidaymakers stranded overseas, was "largely as a result of being deprived of cashflow by [E-Clear]". A claim for £35m has been submitted against E-Clear assets by Globespan's administrators from PricewaterhouseCoopers, almost £19.5m of which relates to flights and bookings that had completed when the airline failed. It remains uncertain whether even secured creditors will recoup any money owing. As well as retaining cash payments from customers of Globespan, Sunwing and others, and using them to plug cash outflows created by the collapse of other airlines, BDO's report reveals E-Clear had funded the purchase of a fleet of luxury cars largely through personal loans to Elia. Administrators identified four luxury cars – a Rolls Royce Phantom, a Ferrari F430 Spider, a Mercedes and a Range Rover – which are under the control of Elia but which BDO believes may be assets of the company. "Administrators are in discussion with Mr Elia regarding the status of his loan account generally," creditors have been told. Meanwhile, Elia has submitted a claim against E-Clear, insisting he is personally owed £25m while Cyprus-based parent group E-Clear Global, also controlled by him, is owed a further £2m. The Serious Fraud Office is gathering intelligence on the conduct of E-Clear but has yet to launch a formal inquiry. BDO administrators said it had started its own preliminary investigation "mindful of the circumstances surrounding the company's failure and the allegations which have been made concerning its management". Its inquiries are focusing on the period immediately prior to E-Clear going bust and on key transactions, including some with related parties. The BDO report said: "It appeared that some of the company's recent financial records were missing, together with a number of laptop computers." Most of the missing documentation, but not all of the laptops, were later found in the neighbouring offices of Elian Group, a business with similar owners to E-Clear. Their retrieval was secured after discussions with the building landlord and Elian employees. Elia has denied all allegations of wrongdoing.