Probe into Deloitte handling of Comet collapse

0
Have your say

Three Deloitte accountants are to be investigated over the way they handled the collapse of retailer Comet, Business Cecretary Vince Cable said.

The chain went under with the loss of 7,000 jobs and left the taxpayer with a bill of up to £26m 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 fees 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”

ICAEW has a range of powers at its disposal ranging from a warning to 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.”

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

Back to the top of the page