Walker confirmed that while a local Customs investigator might want to prosecute a case the decision would have to go though an independent pre-approvals body before companies were fined or joint and several liability measures were applied.

Walker stressed that Customs is not after honest businesses that can demonstrate they have done all they can to avoid carousel fraud.

He claimed that traders have no reason to worry about checking beyond their initial supplier and customer as long as they ask the right questions before doing a deal.

If an honest and legitimate business does everything it can to avoid being caught up and we are satisfied it has made all reasonable checks we are not going to apply joint and several liability.

But the threat of being hit for liability has already driven several traders out of the business. This is having a knock-on effect up and down the supply chain.

MoCo Cell Link boss Maurice Whelan said: Handset trading has come to a shuddering halt. I am petrified of buying from anyone other than the networks or big distributors. It is even a big risk buying stock from respected traders.

Keith Bennett of trading company Furzfield added:

Customs owes us a large amount from March that we havent seen. There is no point staying in the industry. Customs has its talons out and it is looking for some people to make an example of.

A despairing Stuart Wright of Phone Trade said: We arent trading anymore. There is no way we can. With the joint and several liability ruling there is absolutely no way that I can continue trading.

The only people I can truly know if they are legit are my customers and my direct suppliers. Outside of that I just havent a clue.

(See full story P18)

A disgruntled former Orange store assistant is taking the network to court over wages he alleges are owed to him.

David Polson 25 worked in Oranges retail store in Yeovil for seven months in 2002 as a full-time assistant.

During this time he claims the network failed to provide him with the free Nokia handset it promised him failed to increase his wages following the successful completion of his training and failed to pay him his holiday entitlement when he left.

I received no support from my store manager or regional manager when I told them of my problems he said.

They were more interested with procedures and as long as the handsets were correctly lined up they thought they were doing their jobs.

I was told that someone was sorting it out but for my last month I found myself spending more time on the phone trying to sort out my wages than actually helping customers. This meant I was losing the chance to earn commission.

Polson who now works as a graphic designer with a business consultancy also says he incurred bank charges because of the failure of the network to pay his wages accurately. He is also demanding Orange pay the charges.

The case has been transferred to Yeovil County Court.

At time of going to press Orange had not commented on the case.

The letter attributed to development manager Helen Keys said:

Because theres an extremely high demand for mobile numbers but only a limited number to go round if you dont start using yours again soon well be reluctantly obliged to disconnect it to make room for new customers.

One of the recipients complained to a Sunday newspaper. Vodafone apologised and admitted that the letter was badly written and quite aggressive.

There have been a number of senior meetings at Vodafone as the network tries to get to the bottom of the incident.

It is understood that the letter would have had to have passed through a number of hands before it was finally given clearance to be sent.

Vodafone said no one had been dismissed and no disciplinary action had been taken.

Speaking exclusively to Mobile News McGlade said:

We will not be drawn into a price war with 3. Why should we drop our prices? We have a very strong position in the market. We have a great network great products and great services.

3 has some significant hurdles to overcome. It has chunky handsets that have poor battery life. There is also the quality of the network. By reducing the prices it is looking to get some momentum. We wont react to that simply because its the wrong thing to do. We will watch 3 closely but we wont be increasing subsidy.

Masson said: The cuts in dealer subsidies and the changes in returns policies have left dealers feeling like they are being told what to do by networks who dont care about them. The new scheme is about working closer as partners and showing that we do value them.

Masson says that since the top 20 per cent of independent dealers perform 80 per cent of the business for T-Mobile it makes sense for the network to make a concerted effort to forge closer links with these dealers.

The network held conferences in London and Manchester in the first week of August at which Masson spoke to dealers about the possible benefits of such a programme.

I didnt want it to be just a lot of talk so we came up with some ideas and suggestions. I asked dealers to go away and think about the scheme and whether they would like to be involved. Some might not but I have asked those who are interested to contact me and we will come and spend half a day with them talking about the programme.

Masson said dealers would be invited to become part of the accreditation programme subject to meeting certain criteria ranging from quality of dealership to volume of sales.

Those who become part of the scheme will receive greater help in account management from a T-Mobile account manager as well as joint promotional activity and the possibility of joint investment. Masson said the network had 1 million to spend in providing live handsets and laptops to demonstrate the services it offers.

Masson continued: It is not about adding 20 to 30 on to commission for these people. Its about working as a partner and helping dealers be it with promotion or other (cont P2) ventures that they might be considering.

As well as the top 25 to 30 dealers Masson said he was keen to hear from any dealer who wants to work with T-Mobile.

There are certain locations around the country where we feel we need more dealers and if dealers like what we are doing we would like to hear from them.

T-Mobile is also recruiting another eight dealers to expand its Business Partner programme as it continues its drive to capture more high-value SME customers.

The network is one of the last to launch a specialist dealer initiative which follows Vodafones Business Connectivity Club and Oranges Business Specialist scheme. T-Mobile head of business partners John Fannon told Mobile News the scheme is still in its early stages but reckoned the network was aiming for 20 per cent of the small business market.

He confirmed the networks plans to expand the scheme saying:

We are recruiting more dealers for the programme. We want to have 18 in place by Q3 and 25 by next year.

Fannon said T-Mobiles Business Partner programme is designed to target high-value SME customers and reward the selected dealers with ongoing revenue. Ten dealers kicked off the programme last month. They are: Isis Scottish Communication Systems Mobil-One WN1 CCC Network Challenger 31E Yes Telecom Vanguard and Yorkshire Phones.

T-Mobile said its selected partners would need to meet specific criteria such as making 500 business connections per quarter.

The Business Partner connections need to perform to a set level of call spend each month in order for the dealers to qualify for bonuses and ongoing revenue. Business Partner dealers are also offered dedicated marketing support account managers and customer service.

Among other tools offered to dealers is the ability to offer business customers older discontinued business tariffs and discounts on existing tariffs to match deals offered by other networks.

Isobel Townsley 36 of Perth was appearing before Sheriff James Tierney on motoring charges.

While she was being sentenced people in the public gallery were seen giggling and holding up a Nokia 7650 handset. After Townsley who had been fined 350 for driving without insurance and with defective tyres left the dock a police officer followed her and confiscated the phone believed to belong to Townsley. He reported the matter to the Sheriff who recalled the original case.

Sheriff Tierney said the incident raised serious issues for the future conduct of cases within the Scottish legal system and cited the alleged culprit to appear before him.

At issue is whether the phone transmitted still images from the courtroom. He said: it seems to me to be an extremely serious matter with clear potential consequences for anyone knowingly involved in what was going on.

Under Scottish law court proceedings may not be filmed except in exceptional circumstances where permission has been previously granted by the court.

According to the court office the police have not confirmed a picture was transmitted. Once this has been established Townsley will be recalled. Meanwhile the charges still stand.

Representatives from four companies along with the FTIs legal firm Dass Jakhu met officials from the European Commissions Taxation and Customs Union Directorate a fortnight ago to explain why they believe the new UK VAT laws are unfair and why they are wrecking the industry.

The EU officials said they would be monitoring developments and would only be able to act if they saw UK customs officials apply the new legislation in an unfair manner over a period of time. The EU Commissioners said they would judge whether measures such as VAT and duties tribunals and other legal provisions offer traders a realistic chance of defending themselves. The FTI said it would be sending a dossier of evidence to the Commission to back up its claim.

One of the traders David Downey of 1st Mobile said:

Customs and Excise claims it will apply the laws with a light touch but this is simply not borne out by its behaviour. The onus is completely on us to prove the legitimacy of our trading. Whether it intends to or not Customs and Excise is systematically wrecking and destroying our industry.

Corporate4U had 100000 corporate customers under management connected to Vodafone and O2.

This customer base is on Singlepoint contracts and was part of the 405 million Singlepoint sale.

In a separate negotiation Vodafone has purchased the goodwill and infrastructure of Corporate4U. A statement from Caudwell Group said that Vodafone had to buy the firm as it became obvious that the separation of the business from Singlepoint was not practically possible.

Corporate4U offers advanced corporate mobile voice and data solutions such as BlackBerry and Vodafone Mobile Connect as well as fixed-line services.

However a question mark hangs over the fate of the 420 Corporate4U employees.

Around half of them are in sales and account management and are likely to be retained. But those in management and administration may well find themselves facing redundancy as their roles are already duplicated at Vodafone.

Sources say Cattersons departure coincided with Phones 4Us drive to become the UKs number one retailer. An industry figure close to the company hinted that Catterson was not regarded as being able to fulfil John Caudwells ambition for Phones 4U to be the UKs top mobile retailer.

Earlier this month Caudwell poached The Link operations director John Welsh to fill the same post at Phones 4U. Welsh had over 20 years experience in retail with the Dixons group and his arrival meant Cattersons route to the top was blocked.

Outgoing Vodafone sales and distribution director Stephen Brewer told Mobile News: Corporate4U is quite a hard sales and smart sales organisation with the majority of its customers on Vodafone. It was an extension of Singelpoint but was run as a separate business within the Caudwell Group. The job now is to consolidate the management and sales teams.

(see Brewer interview P28)

Corkhill 33 of Croxton Eccleshall in Staffordshire was investigated by Customs after her companies Mondial Mobile and Pysen purchased 18 million of phones from four companies who all subsequently disappeared without paying the VAT to customs.

In 1999 Corkhill set up two mobile phone trading companies called Holerone and Mondial Mobile. Corkhill ran Mondial from the UK.

She hired three French-based accomplices to manage Holerone. Between May and September 1999 Mondial bought 6m of handsets from Holerone.

Mondial reclaimed the VAT from Customs. Holerone disappeared without paying the VAT.

To throw Customs investigaortrs off her scent Corkhill purchased off-the-shelf company Pysen in 1999 and started to purchase handsets from three other companies (Maxonic Technologies Chester Art and Safinia) which had links to the former management of missing trader Holerone.

Between February and August 2000 Pysen bought 12m worth of handsets from Maxonic Chester Art and Safinia.

The three companies charged Pysen VAT. But like Holerone they too went missing without paying the VAT. Pysen successfully reclaimed 2m in input tax from customs. Customs officials realised Corkhill was again involved in a second missing trader fraud.

They decided it was no coincidence and investigated further leading to her eventual conviction.

Customs and Excise assistant chief investigation officer Peter Wiltshire said:

This was a large scale fraud which took place across international frontiers The overseas participants needed someone with experience in the trade who was fluent in French. Lisa Corkhill used her experience and inside knowledge of the mobile phone industry to help steal millions of pounds of public money. She is now paying a heavy price for her dishonesty. I want there to be no doubt amongst those involved in this crime that we are determined to identify them bring them to justice and deprive them of their criminal profits.

Meanwhile LG has poached Samsung technical manager Kevin Robinson to join a new sales and support team in time for the launch of its new GSM handset range.

Samsung confirmed Robinson had left. LG simply said the company was interviewing a number of candidates.

Robinson is expected to join LG on September 4 in a role similar to the one he held at Samsung.

Relations between Virgin and T-Mobile reached an all-time low last month after a second High Court battle between Virgin and T-Mobile ended in victory for Sir Richard Bransons company. The latest court fight included arguments over (Cont P2) the definitions of when a Virgin Mobile customer should be classed as active. T-Mobile had proposed a customer was dormant after 180 days of inactivity on outbound calls.

Virgin rejected this as the formula didnt account for any inbound calls to the customer. The judge agreed and reinstated the original contractual term of 360 days of inactivity before a customer was regarded as dormant.

The judgement gave Virgin a windfall of several million pounds from marketing support contribution withheld by T-Mobile that must now be paid over.

A spokesperson for T-Mobile said: Virgin Mobile is a joint venture between T-Mobile and Virgin Group. T-Mobile is a 50 per cent owner in this venture and as such we would not entertain a change to the network agreement. It is also not possible to see a situation in the near future when that will change – therefore any view that another operator could be used as the network supplier is purely speculative highly illogical and would not receive our agreement.