Cable orders inquiry into Comet failure

Comet - Some rights reserved by ell brownThe Guardian reports:

The business secretary, Vince Cable, has ordered an inquiry into the collapse of high street electricals chain Comet after the government was left with a £50m bill in unpaid taxes and redundancy costs.

The Department for Business, Innovation and Skills (BIS) confirmed that the Insolvency Service had begun a “fact-finding” investigation into the high street chain’s failure: “The purpose of the inquiry is to investigate the circumstances surrounding its insolvency and establish whether further action is required,” said a spokeswoman.

Cable has discretion to demand an investigation “where it is in the public interest to do so”. The inquiry is being conducted under section 447 of the Companies Act which can be a precursor to a more in-depth probe – as was eventually commissioned in the case of serious corporate scandals such as MG Rover.

There were 150 such fact-finding investigations last year and their existence usually remains confidential. Investigators are allowed to demand documents, enter offices and speak to any individuals considered to have relevant information. The matter may rest there, but in the that event wrongdoing is uncovered the Service can seek to have directors disqualified or, if they believe there is evidence of criminal behaviour, pass a file to the police or the Serious Fraud Office.

“We are not in a position to comment further at this stage,” added the BIS spokeswoman. “To do so could prejudice the outcome of the investigation and any future action.”

* Nick Thornsby is Thursday Editor of Liberal Democrat Voice and blogs here.

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3 Comments

  • Shouldn’t any enquiry into Comet failure be chaired by Lembit? ;-)

  • Whilst it is correct to question the £50m bill to the government, we should remember that the workers have also taken a hit by missing out on wages for work done and redundancy pay based on contractual obligations – all of these workers will have been engaged under existing employment law and not under the proposed employee owner (now re-named employee shareholder) status.

    The question every (ex) Comet worker should be asking: when did Comet last pay any NI contributions to HMRC, as their benefits(and state pension) entitlement will be impacted by this.

  • Richard Dean 21st Dec '12 - 8:04am

    Why did this particular investigation not remain confidential?

    Maybe an investigation should be the standard practice for every business failure that is on tis scale. Not only is there a possibility that fraud was involved – embezzlement or cheating on NI payments for example – but BIS may be able to learn more about the process of failure, the key factors, the warning signs, etc, and this information could perhaps be used to guide future investment strategies, business support frameworks, business briefings and eductional curricula, etc.

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