Anchorage Capital founder Phillip Cave says his firm is not to blame for Dick Smith’s demise

THE blame game is not over for Dick Smith, who has snubbed a meeting request from the private equity boss he says “destroyed” the electronics retailer.

***FILE*** A Friday, Dec. 4, 2015 file photo of Signage at a Dick Smith electronics store in Sydney. The electronics retailer will close its 363 Australian and New Zealand stores within eight weeks, putting 2,890 staff out of a job. (AAP Image/Joel Carrett) NO ARCHIVING

THE multi-millionaire founder of the private equity firm blamed for electronics retailer Dick Smith’s demise has leapt to his company’s defence.

Anchorage Capital managing mirector Phillip Cave has written to the electronics store’s founder, businessman Dick Smith, in response to public comments about the firm’s so-called “private equity heist”.

Mr Smith has been outspoken in his view that the firm, which bought Dick Smith from Woolworths for $20 million and made $500 million after listing it on the stock exchange nine months later, should take responsibility for the company’s collapse, which left thousands out of work and gift card buyers out of pocket.

He’s labelled the equity flippers “greedy”, “dishonest” and “immoral”.

But Mr Cave has spoken out, telling the Daily Telegraph that the firm had made “a significant investment in staff, stores, marketing and the operating systems” before floating Dick Smith.

Mr Smith told news.com.au he had received a letter from Mr Cave outlining his case, and seeking a meeting with the outspoken businessman.

Outspoken businessman Dick Smith blames Anchorage for the retailer’s demise. Picture: Ray Strange.

“What he’s basically saying in the letter is that everything was perfect when he handed over the business ... that when he sold it on, it was all in perfect condition,” Mr Smith said.

“He’s actually asked me to come and see him. I’m not going to see him, he can come and see me if he wants to.”

It’s a view that was formed on the basis of an analysis of Dick Smith’s accounts by Forager Funds Management, whose description of the float as “the greatest private equity heist of all time” ran on the front page of the Australian Financial Review.

Economist Jason Murphy said Anchorage used a perfectly legal accounting maneouver to write down the value of its inventory, raise profits through a national fire sale, neglect to restock shelves and open a massive number of new stores to maximise the company’s IPO valuation.

It’s what private equity firms do, and why some people live in $12 million harbourfront mansions, while others scratch their heads wondering what just happened.

A senate inquiry into Dick Smith’s collapse is expected to look at Anchorage’s role, along with the roles played by management and the retailer’s major lenders.

Until more details comes to light, Mr Smith maintained: “My view is it is Ancorage Capital that destroyed the company.”