TCF to launch own Kumuka investigation

TCF to launch own Kumuka investigation
By admin

The Travel Compensation Fund (TCF) will pore through the financial records of Kumuka after it emerged the adventure operator should have been stripped of its licence more than 12 months before it collapsed, as revealed in yesterday’s Travel Today.

The TCF confirmed it was about to start its own “forensic” examination of paper work amid concerns that an accountancy discrepancy hid the true financial position of Independent Travel Adventures.

TCF legal and policy advisor Garry Dellar told Travel Today it was likely to pursue the directors of the company, accountants and auditors through the courts if any wrongdoing or negligence was detected.

According to Pitcher Partners, the liquidators of Independent Travel Adventures, a $600,000 long term deposit in Kumuka’s bank account should have been excluded from the Annual Financial Returns (AFR) handed to the TCF. It wasn’t.

Partner Anthony Elkerton told Travel Today it should not have had TCF accreditation since at least July 2011.

While the TCF monitor a company’s financial stability each year through the AFRs, it is relying on the accuracy of the company’s own audit.

“We have 3000 AFRs and we can’t audit companies ourselves,” Dellar said. “We are about to start our own full investigation and will get all the files from Pitcher Partners. We bring in our own experts in cases like this and they will forensically go through the accounts.”

Should discrepancies be found, the TCF is likely to take legal action even if the chance of recovering money is remote, he said.

“We don’t always look at the commercial aspects. We like to make the point and that companies can’t just collapse and people walk away,” he said. “We will bankrupt them.”

Even if the TCF is successful in any legal action, travel agents will still be left in the lurch. Any cash recovered will only recoup money paid out by the TCF to consumers.

Retailers will have to make a claim through the liquidator although creditors have been warned not to expect the recovery of any funds.

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