The Business Secretary Vince Cable has launched an investigation of the circumstances surrounding OpCapita’s acquisition of Comet and the chain’s subsequent collapse.
The decision comes amidst growing unease about OpCapita owner Henry Jackson who will reportedly pocket some £50m as Comet prepares to close its doors today.
Other reports claim Jackson will suffer a “shortfall” on that amount, although it will still be a sizable payday.
The chain survived just nine months into OpCapita’s stewardship. And the anger has only been amplified by the fact that Jackson has positioned his company as the chief unsecured creditor and first in line for a payout, leaving suppliers and staff in its wake.
Total losses across all creditors are anticipated to reach over £200m.
Jackson’s good fortune carries with it an especially bitter taste as the Government prepares to pay out redundancy cover to the 6,800 workers who as of 6:00pm tonight will be unemployed. That, and the total unpaid VAT, is estimated to equal around £50m.
Former Comet owner Kesa paid OpCapita £50m to take charge of the retailer back in February. The Sun claims that OpCapita also acquired the rights to Comet’s inter-company loan meaning from that moment Comet effectively owed OpCapita – and not Kesa – £145m which, in the paper’s words, meant “it was quids-in whatever happened to the business”.
A source told The Sun: “We’ve already made contact with Comet’s administrators Deloitte and the Secretary of State is keen to review the Insolvency Law to see what improvements can be made. There are a lot of concerns. It’s all completely legal — but it completely stinks.”
OpCapita will also be keeping hold of Caribbean-based insurer Triptych, which ran Comet’s warranties business. Since 2011 it is estimated to have made around £30m profit.
Jackson has been in the spotlight before after he oversaw the collapse of furniture giant MFI, ensuring a decent return for investors as suppliers again lost out. The retailer died two years after it was acquired. He subsequently dubbed the saga as a “success for investors”
This Is Money reports that Jackson has previously admitted that some critics call OpCapita ‘cowboys’, adding: “We protect ourselves and our investors by structuring the transaction in a way that we are extremely unlikely to lose money.”
The spotlight now turns to OpCapita’s other big business interest, GAME. With video games retail proving a viciously tough environment this Christmas, sales over this next week will be of vital importance as the chain prepares to enter a New Year filled with little immediate optimism for its core market.