Staff Reporter

Its not possible to give precise figures for the money involved in other similar cases as the status of each case is being reviewed in the light of the ECJs guidance and other action to protect the revenue may be taken. However the tax at stake is certainly not the billions of pounds suggested. At most the tax that would have to be paid back is around 105m. We have written out to the traders involved and given them the following helpline number to discuss their case: 01737 734 510.

Sony Ericsson refused to comment but a senior source at a rival manufacturer told Mobile News: It has happened. Its an open secret.

LG Mobile sales director John Barton added: Peter has moved to a Vodafone global role.

Barton suggested that Sony Ericsson might promote from within the company.

He said: Sony Ericsson either hasnt decided what it will do yet or has chosen to replace Peter with somebody already within the company.

Acson which traded under the Ora name went into administrative receivership after a shareholder suddenly withdrew investment.

Ora CEO Peter Oliver attempted to buy the company out of receivership before MWG made a better offer to insolvency practitioner Kingston Smith & Partners.

Mobile News understands that other parties interested in acquiring Ora included Unique Distribution and The Accessory People among others.

MWG subsidiary Portix will take on Oras trade and assets. Portix managing director Steve Muttram said the acquisition gives the Ora brand and staff a new lease of life. Portix will distribute third-party accessories under the Ora brand through Portix and the other MWG businesses.

We have been looking for a brand through which we can sell third-party accessories said Muttram. Up to now we have sold a lot of third-party accessories but they havent had a brand identity. The motivation behind the acquisition was to revitalise the Ora brand and to sell Ora-branded accessories through existing Ora channels and through the group.

Portix has transferred Oras stock to the MWG warehouse in Manchester and informed clients of the change of address. Ora has 500 existing trading accounts according to Muttram.

They have traded in the past year – though it is difficult to tell whether or not they remain active he said.

Oras sales staff and managerial team have been retained and moved to a smaller premises in Aylesbury though it is unclear whether Oliver will remain.

In some cases this has been capped by two-thirds.

The decision to apply the cap was implemented by Vodafone head of indirect sales Richard Hurring. A letter to SPs stated: Any connections that exceed targets will not receive standard bonus payments or discretionary support.

One SP was given a few hours notice that he had to cut his weekly connections by two-thirds.

Vodafones major independent SPs include Yes Telecom Intercity and Aerofone. They met up with Vodafone a month ago at a Heathrow Hotel roadshow to be told to go for growth.

This has come from the top said one source. Vodafone looked at its whole UK operation and found a lot of budgets were over-spent. It hit the last quarter and the books didnt balance. Something had to give.

Vodafone has seen 3 and Orange pull back. The networks went hell for leather in the first nine months but have now put the brakes on.

According to the source the capping is across the board.

You can understand why. If theres no budget theres no budget. The upshot is that every service provider has to do fewer connections yet its still got to support its direct sales teams. The SPs still have their own businesses to run. Their people are all being paid salaries and incur overheads. How can the SPs keep them if they are not allowed to do the business?

Another Vodafone supplier added: In the past SPs would not always get the funding they were after. But they knew they could rely on it. The new era of Vodafone management thought this was old-style thinking. They now want to give the SPs everything they ask for and then deal with the financial implications at six-month intervals. They have turned the partnership relationship into a supplier relationship. The trouble is when Vodafone decides to turn the tap back on its SPs will be doing business with the other networks.

A Vodafone spokesman commented: We have asked our independent service provider partners to work within a budget set between now and the end of the year to avoid the foot-on-foot-off accusation. This gives them a set limit to work towards until the end of the year. During this period we will be talking to them to help them to grow their businesses with Vodafone.

But Vincent Curley managing partner at VAT consultancy Curley & Co and a former Customs fraud investigator contradicts this.

An internal Customs document from January 2001 talked about applying pressure on banks he said.

In my experience Customs would put pressure on the banks and I would also expect it to point out to the banks their obligations on money-laundering. I know from advising on the mobile industry that main high street banks close down the bank accounts of mobile phone traders without proper explanation.

However an HMRC spokesman said: HMRC is in regular dialogue with the banking sector and shares information on risk trends. At no point would HMRC ever recommend a financial institution cease working with a specific business or sector. Any decision taken by a bank in relation to either the continued operation of accounts or indeed the closure is a matter entirely for the bank and is a commercial decision solely at its discretion.

But Alias Dass senior partner at Dass Solicitors claims that there is evidence to the contrary.

Some traders say bank staff showed them an internal policy document that says that pressure has been put on them by HMRC he said.

Many traders claim to have received letters from UK high street banks issuing them 30 days notice to shut down their business accounts.

HSBC Barclays and Royal Bank of Scotland/NatWest said that each business customer was dealt with on its own merits regardless of the industry it was in.

One of the companies that you spoke to received a letter from us which did mention the word sector said a Bank of Scotland spokesman. We acknowledge that the wording may have been misleading and given the wrong impression. We look at each business on an individual basis. These decisions are not taken lightly. It is not a blanket approach.

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This followed parent company Maxon Telecoms decision to sell its radio business to Chongo Information Company last December.

Among those who jumped ship were former head of sales Robert Johnson former senior business account manager Andrew Smart former marketing manager Richard Preece and former type approvals manager Trevor Parrett.

Preece told Mobile News that he decided to quit because the situation had become untenable in the wake of the sale. Maxon Telecom sold Chongo the brand rights to its two-way radios he said.

But Chongo assumed that gave it the assets of the company as well. It was trying to bully us. The situation became really confusing. Chongo went away and found new premises and then tried to hire all 30 of Maxon Europes workforce.

Chongo is solely focused on radio and the nine of us were much more centred on mobiles. In the end 21 people went to Chongo but nine of us decided to start a new company instead.

The new company Mobile Expertise offers two-way radios data modems GSM and CDMA handsets and other communications kit.

We are looking to bring new handsets to the UK and Europe and the rest of the world said Slee. We have a strong pan-European distribution base as well as good ties in Korea.

London-based insolvency practitioner Kingston Smith & Partners has been appointed to oversee the sale of the company and its assets.

Ora has a turnover of 3 million a year according to Kingston Smith.

Mobile News understands that its account portfolio had slipped from around 4000 at its height a decade ago to under 50 in 2005.

It lost its high volume accounts with O2 and Orange in March and April this year leaving it with just its distribution ties with the dealer community.

Former Ora sales director Bob Johnson believes that Ora still has a good brand name in the industry and could emerge from receivership.

Johnson said: Ora lost its way and by the end it couldnt be taken seriously by any of the major corporates or any of the significant dealer chains. But there is a good opportunity now for the Ora brand to rise again.

Ajay Gokani managing director of accessories distributor Elite Mobile said: Im not surprised. I knew it was struggling. It lost its O2 and Orange accounts and the only surprise really was that it survived as long as it did.

The market has changed significantly from a couple of years ago. People arent interested in the same kinds of accessories. It is more technology-led now. People are interested in Bluetooth and SatNav and if you dont stock those things the market will pass you by.

Iain Humphrey founder and managing director of accessories distributor Shebang said: It doesnt surprise me that it has gone into administration. I had heard that it has been in trouble for some time. It hadnt got its act together since the last time it went into administration.

Kingston Smith advertised the sale of Acson Limited trading as Ora in the Financial Times on November 29. It was listed as a 3 million turnover business with a well-established UK brand 20000 square foot of leased office space in the Home Counties and a dedicated technical and sales staff.

Ora founder Malcolm Hanson returned to the accessories company in 1998 as interim managing director less than a year after selling it for 20 million to a management consortium.

In 2001 the company went into administration with 21 million of debt before little-known accessory firm Acson bought its brand name and trading assets and installed Oliver as CEO.

Commenting on the decision an Alcatel spokesperson said: Alcatel is exiting mobile handset activity. TCL will use the Alcatel brand because that is part of the agreement. All handsets will be produced in China. Eighty staff will be kept on as distribution agents for TCL and the remaining 280 employees will be assimilated into the rest of the Alcatel operation.

Alcatel exchanged its 45 per cent stake in the TCL joint venture for a five per cent stake in its communications division TCL Communications. Following the move TCL has merged its two mobile handset businesses as TCL Communications.

Alcatel leaves the TCL tie-up after nine months with a huge loss of investment and know-how on its initial stake. Alcatel contributed e45m for 45 per cent of the business last August. It also brought to the table its brand and intellectual property both of which it gives up following the sale.

The Alcatel joint venture lost e26m last year of which Alcatel took a 45 per cent share.

Our own activity in handset production was making huge losses so the solution we found in August 2004 was a way to avoid closing the company down altogether the spokesman added.

We were very close to doing this. The joint venture was a way of tying it to a major player in China. But because of the high competition in the Chinese market and the lack of synergies between France and China it was not easy to make profits and the situation got worse.

Julien Grivolas an analyst at Ovum said: The loss-making and limited market share worldwide were clearly not appealing.

Gordon Ballantyne director of T-Mobile direct maintains the move did not represent a strategy shift for T-Mobile despite the fact that the network shut down 20 solus dealers in March and April as part of its Europe-wide Save For Growth programme.

At the beginning of the year we conducted a review of our retail capacity to focus on the profitable parts within our retail portfolio said Ballantyne.

If you look at our existing footprint in the UK it is not as big as it should be. We now have the opportunity to build a very robust retail business. We will always have store openings and closures.

T-Mobiles retail footprint will double in size by the end of 2006 and increase to more than 300 in 2007. The new openings will see the network increase its number of retail staff by 1200.

But Nick Childs lead organiser at the Communication Workers Union said the decision showed that T-Mobiles original strategy was wrong.

It seems ridiculous because it has just closed down 20 stores and made around 85 sales staff redundant said Childs. It obviously realised that its strategy was wrong.

Dan Biesler research analyst at Ovum added:

T-Mobile got it wrong. This is a reversal of its strategy and a similar reversal has already happened in Germany.

T-Mobile hasnt grasped the importance of customer services and its brand has suffered. That has to be put right.

Many delegates told us they feel HM Revenue & Customs is at war with them said Ian White editor of Mobile News.

They say they are being singled out because the authorities are unable to stop the real criminals. Ironically it is the inability of EU governments to collect tax from each other which gives the real crooks their loophole.

The presence of a BBC TV Panorama investigation team at our conference suggests the wider public interest may be at risk here he said.

The sense of persecution was emphasised by Mike Cheatham of Bond House the computer components brokers caught up in a landmark legal case that will decide the legality or otherwise of Customs VAT recovery regime on EU trade.

There is a war out there with Customs. The only way to sort this problem is for Customs to change its mindset he said.

Cheatham claimed HM Revenue & Customs could stop fraudulent trading overnight either establishing a base rate of VAT on all goods passing between EU countries or by implementing a system he had developed himself. But he said he was not going to reveal details of his solution to Customs until he was sure it had altered its view that the trading market exists only for purposes of fraud.

Meanwhile leading VAT solicitor Hassan Khan warned conference delegates not to hold their breath hoping for a defeat for the Government in the Bond House case that would re-write the rules on cross-border tax accounting and possibly leave the way open for traders to sue for compensation due to withheld VAT refunds.

I hope we win. But we have had five judges from five countries who have been taking a year to deliberate on the case and are still undecided since the Advocate Generals opinion. That must sound an alarm bell. It will not be over until the European Court of Justices opinion is out.

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