A UK energy supplier could go into administration as the prospect of a £1.5million fine looms over it. Tomato Energy was recently banned from taking on new clients after an Ofgem investigation into debts of more than £3million.
The Sun has reported that the company has filed a notice of intent to appoint an administrator. The development comes as the supplier has encountered significant challenges that have resulted in operational restrictions. On October 13, Ofgem announced a proposal to fine the firm. The regulator issued details of a “proposal to impose a financial penalty to Tomato Energy Limited because of its failure to obtain and maintain liquidity at a sufficient level.” Ofgem said at the time: “Ofgem is publishing a proposal to impose a penalty on Tomato Energy because of its non-compliance with the issues linked to the provisional order published in April. We are proposing a financial penalty requiring it to pay £1,500,000.
“This is for breaching the standard licence condition that requires it to obtain and maintain liquidity at a level that enables it to pay its ongoing financial liabilities.”
Filing a notice of intent to appoint an administrator can mean a firm has just 10 days to solve its problems before going bust. The Sun claims that Tomato Energy filed the notice nine days ago.
Just last month, Ofgem said it could lose its licence if it could not prove its financial stability. Ofgem gave the Basingstoke-based firm three months to comply. It has around 14,000 customers, according to the BBC.
The regulator began looking into the finances of Tomato Energy Limited after being contacted by firms considering legal action to recover debts totalling more than £3m.
The investigation ended with them bringing in a sales ban. That prevented the supplier from taking on new customers until it could show it was managing its finances in line with industry regulations.
In a statement in September, Ofgem said: “We will take robust action to protect consumers if we see evidence that energy companies may be failing to comply with our rules.”
The Daily Express has contacted Tomato Energy for comment.
