Investigations into the issues that led to the collapse of Farepak have been completed by the government's Companies Investigations Branch.
The Department for Business, Enterprise and Regulatory Reform said the CIB would now seek legal advice on whether evidence contained in its report could form the basis of legal action.
BDO Stoy Hayward, Farepak's receiver, was tasked with investigating the loans made through the Christmas hamper club to Farepak's parent company, European Home Retail.
In 2006, the Christmas club received about ₤40m from 150 000 families and loaned ₤17m to its parent and sister companies by the time it went into administration.
The investigation involved the analysis of thousands of documents and numerous interviews with the directors and other interested parties.
The CIB has the power to apply to the court to disqualify a director; refer evidence to other investigators or prosecutors (e.g. the police or the Serious Fraud Office); refer information to other regulators or bodies to consider disciplinary or other action against their members (e.g. the Institute of Chartered Accountants, or the Law Society) apply to the Court to wind-up a company (not adopted in this case as the companies were in administration and had creased trading).
The contents of the investigation however remain confidential by law, unless the matter goes to court, at which stage details will emerge during proceedings.
Consumer Affairs Minister Gareth Thomas said that government is working to prevent other families suffering similar problems in the future.
'We initiated a comprehensive investigation to establish the facts. We are now getting legal advice on whether there are grounds for further action,' said Thomas.
Further reading:
AIDB to investigate Farepak collapse
reader comments