Partly Cloudy

Partly Cloudy

max temp: 23°C

min temp: 19°C

ESTD 1874 Search

Retail: Deloitte trio referred for investigation over Comet administration

15:58 25 July 2014

The administrators of Comet have been referred for investigation.

The administrators of Comet have been referred for investigation.

Three accountants from Deloitte are to be investigated over the way they handled the collapse of retailer Comet, business secretary Vince Cable said today.

The chain went under with the loss of 7,000 jobs and left the taxpayer with a bill of up to £26million after an employment tribunal found that staff had not been consulted on the potential for redundancies as legally required.

The Insolvency Service has referred the insolvency specialists Christopher Farrington, Nicholas Edwards and Neville Kahn to the Institute of Chartered Accountants in England and Wales (ICAEW) following an 18-month investigation into the case.

The Insolvency Service is concerned that the Deloitte trio worked for Comet before it collapsed and so faced a conflict of interest as administrators.

An employment tribunal last month awarded Comet staff between 70 and 90 days extra pay because they were not consulted over their redundancies, which will cost up to £26m.

The Government’s Redundancy Payments Service has already paid out £18.4m in redundancy to almost 5,000 former Comet staff.

Mr Cable said: “The taxpayer now faces a multi-million pound compensation bill as result of the failure to consult employees. There can be no excuse for failing to comply with the law which is very clear in this area.

“It is vital that the regulator establishes why this happened and whether disciplinary action against the administrators is appropriate.”

ICAEW has a range of powers at its disposal ranging from a warning, a reprimand, fines or licence withdrawal.

Deloitte said: “We note today’s announcement and will cooperate fully with any investigation. However, we strongly disagree with the suggestion of a conflict of interest.”

The firm added that it is not unusual for an accountancy body to work for a client before acting as its administrator, because a prior knowledge of a firm’s finances can help the administration process.

Deloitte added that all Comet staff were told in writing that they might lose their jobs. It also held talks with unions, organised job fairs and set up a website where prospective employers could post available positions to Comet staff.

The accountancy firm added: “Regrettably, it proved impossible to find a purchaser willing to save the business and the employees ultimately had to be made redundant.”

The collapse of Comet, which had more than 250 sites, was one of the biggest high street failures since the demise of Woolworths in 2008.

In December 2012, administrator Deloitte said it had failed to find a buyer for the company or any of its shops.

With insufficient funds raised from the winding down of the chain, it fell to the Redundancy Payments Service to meet outstanding redundancy pay, accrued holiday pay and pay in lieu of notice.

Mr Cable is currently taking a bill through Parliament that aims to tighten up insolvency regulation.

Search hundreds of local jobs at Jobs24

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

Alex Pattenden, managing director of Unity Online.

Suffolk digital marketing company Unity Media Eastern has rebranded to become Unity Online, in a move designed to help it to meeting growing demand from the small and medium-sized enterprises (SME) sector.

A MRS grab at the Port of King's Lynn, similar to five which have been purchased by Associated British Ports for use at the Port of Ipswich.

Associated British Ports (ABP)has invested more than £160,000 in five new MRS cargo handling grabs for the Port of Ipswich, to help handle an increase in the trade of dry bulk materials.

The launch of the Suffolk Black Minority Ethnic Business Awards at the University of Suffolk, which will also host the awards ceremony in October.

The inaugural Suffolk BME Business Awards, recognising enterprise within the county’s black and minority ethnic communities, are now open for entries.

Sydney Mini Market, Ipswich

Three establishments in Ipswich have been given one star food hygiene ratings after latest inspections.

Melissa Abbott of Muntons who has been appointed national vice chairman of the Brewing, Food & Beverage Industry supplier’s' association (BFBi).

Melissa Abbott has been appointed national vice chairman of the Brewing, Food & Beverage Industry suppliers’ association (BFBi), the first time this role has been held by a woman.

HOT JOBS

Show Job Lists

Most read

Most commented

Topic pages

Streetlife

Newsletter Sign Up

Sign up to the following newsletters:

MyDate24 MyPhotos24