Firm that axed 350 at Xmas still owes £850k
A COMPANY whose 350 workers lost their jobs last Christmas Eve after it collapsed has failed to pay back £850,000 of taxpayers’ cash.
Kaiam optical components was awarded a grant by business quango Scottish Enterprise after it transferred production from China in 2014.
Its administrators KPMG are still being pursued for the money almost a year after Kaiam sent workers home with no Christmas pay – before telling them the firm had gone bust and they were out of work.
Lothian Labour 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 that Kaiam, whose factory was in Livingston, West Lothian, was facing a $10million (£7.6million) action in the US over patent infringement when the company collapsed.
Californian tech firm Finisar sued, alleging that Kaiam had infringed 13 of its patents.
The firm did not respond to a request for comment.
Mr Findlay added: ‘Scottish Enterprise really has to conduct an internal investigation into the use of public money to shore up (the) company.’
Former Kaiam chief executive Bardia Pezeshki, an Iranian-American, started a new tech company in the US in January, days after Kaiam went bust.
His firm had gone to Scottish Enterprise just a month before the company collapsed to ask for more financial support.
Correspondence previously released by Scottish Enterprise in response to a freedom of information request showed 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 $10million (£7.6million) was being requested.
The author of the email, whose name was redacted, added that it was extremely unlikely the quango would provide the firm with any more money.
Another email dated December 22, 2018 stated Scottish Enterprise was asked for cash to cover December staff salaries but this request was also refused.
Mr Pezeshki 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, he 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.’
A Scottish Enterprise spokesman 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.’
KPMG declined to comment.
‘Change way grants are awarded’