Collapsed West Lothian tech firm Kaiam still owes taxpayers £850,000

A COMPANY whose 350 workers lost their jobs last Christmas Eve after it collapsed has failed to pay back £850,000 of taxpayers’ cash.

Monday, 23rd December 2019, 2:20 pm
Kaiam workers lost their jobs last Christmas. Picture: TSPL
Kaiam workers lost their jobs last Christmas. Picture: TSPL

Kaiam optical components was awarded a grant by business quango Scottish Enterprise (SE) after it transferred production from China in 2014.

Its administrators KPMG are still being pursued for the money almost a year after Kaiam sent its Livingston 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.

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“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, was facing a $10m (£7.6m) action in the US over patent infringement when the company collapsed.

Californian tech firm Finisar sued, claiming that Kaiam had infringed 13 of its patents, but it 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 started a new tech company in the US in January, days after Kaiam went bust.

His firm had gone to SE just a month before the company collapsed to ask for more financial support.

Correspondence previously released by SE 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 SE said bridging finance of up to $10m (£7.6m) was being requested. The email 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: “You really need to speak to administrators KPMG.”

Scottish Enterprise said: “We continue to pursue the repayment of our funding to Kaiam via the administrator.”

KPMG declined to comment.