Firms owed millions after Comet collapse as Hull MP Alan Johnson says 'questions need to be asked'
AN INVESTIGATION has been launched after it emerged Comet collapsed owing firms millions of pounds.
The troubled retailer yesterday closed its last remaining stores, including at Kingswood and St Andrew's Quay.
Bright yellow signs in the window advertised the fact "everything must go".
However, not even an army of shoppers could make a dent in the retailer's debts, as reports have revealed the company's unsecured creditors – including Hull City Council, Jagger Joinery in Bransholme and Summit Media in South Cave – are owed more than £95m.
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Hull West and Hessle MP Alan Johnson said: "We think this requires an investigation as there are some very difficult outcomes here, not least of all the fact the consultation period was cut by half, meaning staff are not going to get their bonuses or anything above statutory redundancy pay.
"I'm loath to make any accusations but I believe there are elements that need to be looked at."
Opcapita bought Comet last year from previous owner Kesa Electricals for just £2. At the time, it also received £50m as part of a deal that saw it take on the company's pension responsibilities.
However, following the company's collapse it has emerged Opcapita looks set to recover £50m while unsecured creditors and former store employees stand to receive nothing.
On Monday, administrators Deloitte said it remained in talks over the sale of internet operations and the brand.
But it confirmed the UK taxpayer will have to pick up a £49.4m bill for unpaid redundancy and tax payments.
Mr Johnson said: "As well as the taxpayer having to pick up the bill for this, the general public also holds about £4.7m of unspent gift vouchers.
"When myself and Steve Brady met with John Clare, the then chairman of Comet who was brought in from Dixons, things looked very rocky for Comet.
"However, it looked as though the company did have a future. Now all that has evaporated and so there are certainly questions that need to be asked."
Comet was founded in Hull in 1933.
Employing about 6,895 people at its height, including more than 500 in Hull, its collapse is one of the biggest high street failures since the demise of Woolworths in 2008.
The fact-finding exercise by the company investigations branch of the Insolvency Service will cover the run-up to administration and Comet's takeover by a private equity-backed investment vehicle in February.
A spokesman for the Department of Business, Innovation and Skills said: "We can confirm the Insolvency Service has launched a fact-finding inquiry under section 447 of the Companies Act into Comet Group.
"The purpose of the inquiry is to investigate the circumstances surrounding its insolvency and to establish whether further action is required."