Lloyds Bank should be pressed to repay the £1.3m lost to the taxpayer with the collapse of EuroManx airline over a decade ago.

That’s the call from Liberal Vannin leader and Douglas South MHK Kate Beecroft who has written to all Tynwald members asking for a full investigation into the EuroManx affair.

Isle of Man Newspapers revealed in February 2017 the links between the EuroManx collapse and a £245m fraud scandal involving Halifax Bank of Scotland.

EuroManx, which operated services from Ronaldsway to Liverpool, Manchester, London City and Belfast, collapsed in 2008, blaming rising fuel costs and falling passenger numbers.

It owed the Manx government £1,656,244 in unpaid airport fees, taxes and other debts. Treasury subsequently recovered £285,111 through the liquidation, leaving the final cost to the taxpayer as £1,371,133.

EuroManx avoided having its aircraft impounded by flying its last Dash8 off the island at 6.23am, informing airport authorities two minutes after take-off that it had ceased operations.

Until July 2007, one of EuroManx’s directors was David John Mills, 51, who in 2017 was jailed for 15 years for conspiracy, fraudulent trading and money laundering in connection with one of Britain’s biggest bank frauds.

In a scam perpetrated at HBOS’s Reading branch, struggling small firms were run into the ground by being referred by corrupt bankers to Mills’ turnaround consultancy and loaded with exorbitant debts and fees.

Their victims were normal people running small to medium sized businesses who needed support and instead had their livelihoods destroyed.

Mills and his associates would take millions out of these companies to fund lavish lifestyles and offer kickbacks and gifts to the bankers as a reward for recommending them. Bank of Scotland, which was acquired by Lloyds in 2009, was last month fined £45.5m by the City regulator for failing to disclose information about the £245m fraud scandal.

Mrs Beecroft said revelations from extensive investigations by Thames Valley Police and an internal report, now made by public, by a former Lloyds Bank employee had left her with no doubt that there should be the ’fullest possible inquiry’ into the EuroManx affair.

She said: ’I am asking the Chief Minister and all the Hon Members of Tynwald to support this call to have the EuroManx affair thoroughly investigated, and to examine in detail the possibility of making a claim upon Lloyds Bank to have the losses incurred by the taxpayers in the EuroManx collapse repaid by the bank.’

Mills was also chairman and director of island-registered EuroManx’s UK parent company Corporate Jet Realisations Ltd, formerly known as Corporate Jet Services Ltd, which held 99.9% of the airline’s shares but went into receivership in 2007 and was wound up two years later.

Corporate Jet Realisations’s collapse was investigated by the Thames Valley Police detectives who headed the six-year long Operation Hornet inquiry into the HBOS fraud.

Back in 2009, liquidator Elliot Green raised concerns about how the company had gone into receivership with debts of £111m but on the same day had been sold in a management buy-out to Quest Aviation Services, a company created by the same directors which again held 99.9 per cent of EuroManx’s shares.

The result of the buy-out was that the lending bank HBOS was left with a £98.5m shortfall and there were no assets available to distribute to unsecured creditors.

Mr Green uncovered evidence that before it went into receivership Corporate Jet Realisations had used the services of, and made payments to, Mills’ turnaround company Quayside Corporate Services Ltd.

Liquidator Mr Green obtained a full settlement of 100p in the pound from Lloyds Bank to the creditors’ claims.

This settlement agreement was confidential but he confirmed that a total of £1,259,235 was received into the liquidation estate.