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.
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CLOSED: Comet at 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."
Comments
by fdsbfadhsh
Wednesday, December 19 2012, 9:46PM
“"The purpose of the inquiry is to investigate the circumstances surrounding its insolvency and to establish whether further action is required."
In other words, the remit of the inquiry will be limited to the conclusion that not enough people bought enough stuff.
Well done to those of you that believe in free market exploitation.”
by keywally08
Wednesday, December 19 2012, 9:32PM
“That's comet sense !!!”
by dontwo
Wednesday, December 19 2012, 7:04PM
“Whats the point in asking questions when these greedy "businessmen" who ran Comet would have had all the right answers ready and sorted a long long time ago when they knew this collapse was going to be allowed to happen. Some of these "businessmen" will profit no doubt from all this, even stooping lower by authorising and allowing the tendering of work to local companies, knowing full well they would never get paid.”
by SPBlakeney
Wednesday, December 19 2012, 6:47PM
“When you start letting spivs in suits trade companies between each other for token £1 sums then playing with cybercash to try turn the firm around, this happens. No responsibility, no sense, no consequence and everything to play for. It must seem quite exciting for the nameless city slickers to gamble with millions-perhaps if they were forced to personally attend each store and explain how their management decisions helped put even more Hull residents out of work,it would be a welcome dose of reality.”
by CarmellaBrown
Wednesday, December 19 2012, 6:02PM
“summit media is a company run in a prison by prisoners”
by CarmellaBrown
Wednesday, December 19 2012, 5:59PM
“bye bye comet”
by corrig
Wednesday, December 19 2012, 1:55PM
“it is now reported by the ex parent company of the hdm that the fees charged by deloittes for the administration of comet is 10.4 yes 10.4 million pounds. described as" far to much" i would describe it politely as immoral at best. it also describes reports that op capita (owners of comet) stood to lose 140 million as "hooey" they will in fact probably carry off a single digit millions profit. the whole affair is the unacceptable face of capitalism. like the fish dock that preceded hull comet branch it smells to high heaven.”
by GlennQuagmire
Wednesday, December 19 2012, 1:53PM
“Any money needing to be paid by the taxpayer is simply a failure on the part of the tax office to collect what's owed correctly in the time that's it's owed.”
by ek_its_chily
Wednesday, December 19 2012, 12:08PM
“Hull City Council is a creditor. To the tune of how much? Just so I can work out my share of the payback that will hit me soon....”
by Removal Man Hull - Local & Nationwide Removals & Storage
Wednesday, December 19 2012, 11:41AM
“I cannot understand how a store like this could go bust. White goods sell like hot cakes. Very poor mis management. Lots of profit making stores closed, buffoons at the administrators as well.”