Investigation into Comet's collapse concludes, government mulls next steps

The Government body said it is now “looking at what the next steps are” following the conclusion of the investigation.

Business Secretary Vince Cable tasked the Insolvency Service with investigating Comet’s collapse in 2012.

The Insolvency Service would not reveal the findings of the investigation because evidence is provided in confidence, but if it concludes there was any wrongdoing, the directors could be labelled “unfit” and banned from being company directors for up to 15 years.

Henry Jackson, boss of Comet owner OpCapita, has faced intense scrutiny over his role in the administration, which cost 6,000 staff their jobs. Shadow Business Secretary Chuka Umunna said in Parliament that OpCapita had “very serious questions to answer”.

The Insolvency Service has carried out the investigation under Section 447 of the Companies Directors Act and under section seven of the Company Directors Disqualification Act 1986.

Section seven of the Company Directors Disqualification Act allows the Secretary of State to apply for a disqualification order under section six of the Act if it is deemed “expedient in the public interest”.

Under section six of the Act, which concerns unfit directors of insolvent companies, the minimum period of disqualification is two years and the maximum period is 15 years.

An announcement from the Department of Business, Innovation and Skills before the general election now appears unlikely because the Government will enter a purdah period on Monday.

The purdah prevents any announcement that could be seen to unduly influence the electorate ahead of a general election.

A separate investigation into Deloitte’s handling of the Comet administration is being carried out by accountancy industry body ICAEW, but that investigation is yet to conclude.

A spokeswoman for OpCapita said: “OpCapita went into the Comet acquisition with a clear view the business had a viable future and a plan to deliver a successful turnaround, just as we did with Game Digital which successfully floated on the London Stock Exchange. 

“We installed a new management team at Comet led by John Clare, the former chief executive of Dixons, who did their utmost to stem the very significant losses and drive operational improvements. In the early months this succeeded in stabilising the financial performance of the business but their efforts were subsequently undermined by the loss of credit insurance.

“Despite meeting with the leading credit insurers and gaining their support prior to the acquisition, the decision by the leading credit insurance providers to later withdraw cover dealt an extremely damaging blow to Comet.

“By the summer, without credit insurance in place, we were struggling to get enough stock from suppliers to trade through Christmas. At that point there was little choice but to call in the administrators.

“It is a source of significant regret that we were unable to succeed with the turnaround and save the jobs of the thousands of employees who were affected.”