Member Article

Vince Cable to launch enquiry into Comet liquidators

Business secretary Vince Cable is set to refer the liquidators of failed electrical goods retailer Comet to the accounting watchdog ICAEW.

This comes more than 18 months after the electrical goods retailer collapsed with the loss of almost 7,000 jobs, leaving taxpayers with a bill of £50 million.

Sky News reported that the Business Secretary will say that the insolvency service, a Government agency, is referring three partners of Deloitte to the watchdog.

The ICAEW could impose substantial fines or strip accountants of their licence to operate.

The ICAEW probe was expected to investigate a possible conflict of interest which arose because Deloitte acted for Comet before its insolvency as well as undertaking a role as the company’s administrator; and because they failed to consult the chain’s employees properly before they were made redundant.

Previously an employment tribunal ruled that more than 2,000 former Comet staff should receive around £10 million in redundancy payments.

A judge is due to rule shortly on whether such payments should be extended to a further 4,000 ex-employees of the chain, which would generate an additional £15 million bill, which would be footed by taxpayers.

In a statement issued after the employment tribunal ruling in June, the three liquidators said: “It is disappointing that the tribunal has found against the company.

“The Comet management team, administrators from Deloitte and our advisors worked tremendously hard under very challenging circumstances to provide the best possible consultation to the employees.

“Comet Group Limited made significant efforts to consult with its nearly 7,000 employees across more than 250 sites during the administration, whilst a purchaser for the business was sought.

“Regrettably, it proved impossible to find a purchaser willing to save the business and all the employees ultimately had to be made redundant.”

Victoria Robertson employment partner at the Needle Partnership, who represented the largest group of Comet employees with legal representation said: “I welcome any steps to make insolvency procedures more transparent and fairer for employees and creditors.

“It is vastly unfair that thousands of small businesses and employees are left out of pocket whilst professional advisers, especially chartered accountants, who are meant to act in the public interest, make millions in fees.

“It is especially distasteful when, as has recently been reported, those advisers appear to have been involved from the outset. I hope that the current investigations lead to proper regulation of this sector. “

This was posted in Bdaily's Members' News section by Clare Burnett .