Comet collapse

The Department for Business, Innovation and Skills (BIS) is to launch an immediate probe into the acquisition and administration of doomed electrical retailer Comet.

The move comes on the same day that the beleaguered chain is set to close the last 49 of its 236 stores, bringing a cruel end to a 79-year presence on the British High Street.

Up to 7,000 people will have lost their jobs as a result. The British taxpayer will have to pick up the £49.4m in redundancy payments and lost taxes.

A BIS spokesman confirmed that the Insolvency Service had been appointed to investigate the saga after a number of MPs raised concerns.

He said: ‘We can confirm that the Insolvency Service has launched a fact finding inquiry under section 447 of the Companies Act into Comet Group Ltd. The purpose of the inquiry is to investigate the circumstances surrounding its insolvency and to establish whether further action is required.

‘We are not in a position to comment further at this stage. To do so could prejudice the outcome of the investigation and any future action.

‘The Department for Business is already reviewing the overall insolvency regulatory framework, to see whether it remains fit for purpose in today’s environment.’

On Monday, Comet’s administrators, Deloitte announced that all unsecured creditors, which include HMRC, various landlords and ITV, would receive less than 1% of their outstanding money owed to them.

A staggering £233m is owed to unsecured debtors, with HMRC accounting for £26.2m in unpaid taxes.

Holders of £4.7m of unclaimed Comet gift vouchers are also left high and dry. As are a number of landlords who are believed to be owed some £135m in unpaid rent and other debts as well as broadcaster ITV and internet search giant Google, which have both been left with outstanding advertising bills.

As Deloitte has been unable to find a buyer for the business – which was controversially bought for just £2 by OpCapita investment vehicle, Hailey Acquisitions, in November 2011 - the government's Redundancy Payments Service will have to stump up the £23m in outstanding redundancy and holiday pay.

Comet was bought from the Anglo-French group Kesa last year.

The Big Four firm estimates Comet’s losses to be in excess of £300m. But Hailey Acquisitions is widely tipped to receive a payment of just under £50m as a secured creditor - a £95m shortfall on the sum owed.

Deloitte’s report shows Hailey Acquisitions Limited (HAL) received £11.5m in interest and arrangement payments while OpCapita and an additional Hailey vehicle netted £1.3m for “quarterly monitoring fees”.

Soon to be unemployed Comet employees are furious that OpCapita allowed the business to collapse within weeks of buying the company which came with a £50m dowry from Kesa.

Deloitte's report shows that the secured creditors – led by HAL – will receive £49.7m from funds raised by the sale of Comet’s stock and assets. Deloitte and the legal team carrying out the administration will pocket £10.4m between them.