One year on: Enterprise chiefs still chasing £850k after tech firm’s collapse
MSP wants probe into how public funds were blown on company
Hundreds of thousands of pounds of public money has yet to be clawed back from a tech firm that went bust last Christmas putting more than 300 staff out of work
Staff at Kaiam’s Livingston factory were told they had lost their jobs on Christmas Eve when the US-owned company collapsed.
Almost a year on Scottish Enterprise is still pursuing Kaiam’s administrators, KPMG, for repayment of an £850,000 grant handed to the firm in 2014.
Lothian MSP Neil Findlay said: “The Kaiam case still makes me very angry indeed. A year on the company still owes almost a million pounds in grants that were given to them by the taxpayer.
“This saga shows we need to really change the way grants are awarded and to end the rip off of taxpayers and workers.”
It has also emerged computer parts manufacturer Kaiam was facing a $10 million legal action in the US over patent infringement when the company collapsed.
Californian tech firm Finisar sued, alleging that Kaiam’s optoelectronic transceivers infringed 13 of Finisar’s patents.
Mr Findlay added: “Scottish Enterprise really has to conduct an internal investigation into the use of public money to shore up what appears to have been a very dodgy company.”
Former Kaiam chief executive Bardia Pezeshki, an Iranian-American who has a $3m home in San Francisco Bay, denies the allegations of patent infringement.
Mr Pezeshki started a new tech company in the US in January this year, a matter of days after Kaiam went bust.
We reported how the tycoon was at a Christmas night out with Livingston factory workers days before Kaiam went under.
But he knew the company was in trouble.
Kaiam went cap in hand to Scottish Enterprise a month before the company collapsed to ask for more support.
Correspondence released by Scottish Enterprise following a freedom of information request by The Post shows Kaiam asked for millions of pounds to shore up the failing firm.
In an email dated December 6, 2018, a senior figure at Scottish Enterprise said bridging finance of up to $10m was being requested.
The author of the email, whose name was redacted, added that it was extremely unlikely the government quango would provide the cash.
Another email dated December 22, 2018, stated Scottish Enterprise was asked for cash to cover December staff salaries. This request was also refused.
The Post called Mr Pezeshki at his home in San Francisco Bay yesterday. He said: “I really didn’t like the treatment I got in the press last year so I don’t want to speak to journalists.”
When asked if Kaiam infringed Finisar’s patents, Mr Pezeshki said: “We don’t think so. We were spending money on lawyers to fight it when the company went down. But when the company went down it was no longer in my hands. You really need to speak to administrators KPMG.”
Finisar did not respond to a request for comment. Finisar’s lawyers also failed to respond.
Scottish Enterprise said: “Rigorous due diligence checks are carried out before any funding offer is made.
“At the time of our investment, Kaiam was an ambitious inward investor with strong growth prospects. We continue to pursue the repayment of our funding to Kaiam via the administrator.”
Administrator KPMG declined to comment.