The Government will no longer pursue the former owners of Comet over the company’s collapse, which netted OpCapita and others £114m and left the taxpayer £70m out of pocket.
A report into the company’s collapse by the Insolvency Service will also remain secret, according to Anna Soubry, the minister for small businesses.
“The Insolvency Service has concluded its confidential fact-finding inquiry into the circumstances surrounding the insolvency of Comet Group,” she said. “Publication of the evidence gathered during the inquiry into the company is prohibited by law, and as the report of the inquiry contains such evidence, it also cannot be published.
“However, I can confirm that, after careful consideration of the facts obtained in this investigation, it has been decided that there is insufficient evidence to warrant enforcement action.”
The decision not to publish the details of the failure, which left 7,000 workers redundant, is at odds with former business secretary Vince Cable’s promise that he would to share them with Labour politicians.
The revelation came in a written answer to former shadow business secretary Chuka Umunna, and means any action against the owners, in what was described as the biggest raid in corporate history, comes to an end.
Mr Cable had pushed for a change to insolvency rules after the collapse, and looked at banning directors from running future businesses; however, the current Government does not seem to want to hold the owners to account.
Comet collapsed in 2012, less than a year after it was bought by controversial US financier Henry Jackson, through his OpCapita fund, from former owner Kesa. The owners started a major asset-stripping exercise and set up a shell company called Hailey Acquisitions, with all funds needed by Comet filtering through it.
When the shell company called in its loan, Comet went bust, but because Hailey Acquisitions was a secured creditor, it got back most of its money while the taxpayer picked up the massive redundancy bill and missed out on £25m owed in VAT.
A tribunal found that administrator Deloitte did not inform staff of possible redundancies with enough time and the redundancy bill increased – again picked up by the taxpayer. Mr Cable made several attempts to try to claw back some of the money and to ban the directors, however, they all failed.
In 2012 he told Parliament that his then department would conduct a thorough inquiry, adding: “Under the law I am not allowed to publish the report, but I will try to ensure that he [Mr Umunna] and his frontbench colleagues are properly briefed whenever information becomes available.” The Independent understands that the information was never made available, and the new Government is unlikely to offer the report up for scrutiny.
Under insolvency laws, the Insolvency Service investigates all collapsed businesses, but the details must remain confidential.
The previous government had been keen to pursue individuals when companies collapsed – with little success: targeting former Christmas savings club Farepak directors failed around the same time as the Comet collapse – rather than changing the law.
Sajid Javid, the new Business Secretary, has not said what his views are on administrations and holding directors to account; most bust companies leave the taxpayer with heavy bills.
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