Staff Reporter

The move is part of a strategy to increase the number of non-executive directorships on the board currently standing at five. The retailer said it was looking for an additional non-executive director and would announce an appointment in due course.

Esom was named managing director of the John Lewis Partnership-owned supermarket chain in 2002 after six years at Waitrose as director of buying. He previously worked in a number of buying roles at Sainsburys.

According to Carphone Warehouse director of corporate affaires Peregrine Riviere it is Esoms experience in developing a high-end retailer against stiff competition from lower margin higher volume rivals such as Tesco that Carphone Warehouse will find especially valuable.

The role is to bring a broad range of experience to the board said Riviere. He has had a successful career buying in a period of slowdown and managed to carve out a niche in the higher end of the market.

He has tremendous experience in store roll-out to different markets. While we pride ourselves on already being good at this its always good to get a second opinion.

The dealers who acted as agents for Sheffield-based service provider Intercell are in the Nottingham area

Intercell was sold to Norweb Telecom last year. The sting is believed to involved a company called Ilkeston Co-Op which took delivery of thousands of phones that were either never delivered or activated.

Mobile News understands as many as 7000 connections may have been involved.

It is alleged that the dealers under investigation paid Ilkestons first-years line rental on the connections and pocketed the balance of the connection commission. The system depended on the co-operation of an employee at Ilkeston.

The connections were put through Intercell which was an independent service provider until it was sold to Norweb Telecom.

At the time Intercell was paying 245 for a business connection with a years line rental of 11.91 per month equivalent to 142.93 a year.

The dealers concerned apparently paid Ilkeston the money to cover the line rental and still made 100 profit per line.

A source with an understanding of the system told us:

The terms and conditions of the contract with Vodafone is that commission is based on intent to use the phone. There was no intent. They werent supplying any phones. The two losers are Vodafone who paid 90 per connection and the service provider who made up the balance.

A statement from Your Communications said:

Your Communications is currently investigating the activities of two dealers who acted as its agents in the Nottingham area.

Pending the possibility of legal proceedings it would be inappropriate to comment on the exact nature of the investigation. But the investigation does involve the supply of SIM cards and handsets to a third party. Your Communications and Vodafone are working to ensure that all dealers adhere to best practice in the interests of the industry.

Meanwhile Your Communications MD Hugh Logan has appointed a new man to run the mobile communications division. He is Paul Lawton who joins from Fones Direct.

BTCellnet sales director Mark Stansfield told Mobile News:

BTCellnet has been informed that RSL has gone into receivership and at the moment we are exploring the opportunity but no definite decision has been made yet.

RSL COM managing director Barry Mowbray planned to lead a management buyout (Mobile News May 14) but failed to meet the June 27 deadline set by administrators PricewaterhouseCoopers. Around 115 people have been laid off.

RSL COM UK was allowed to continue trading on its own in March while actively looking for a buyer after parent company RSL Communications Ltd entered insolvency proceedings.

PricewaterhouseCoopers spokesperson Lorna Siddall confirmed that 115 people out of 264 had lost their jobs. The redundancies are spread over Basingstoke (70) London (5) and Telford (30).

RSL COM dealers now face the prospect of losing thousands of pounds of their first years commissions. These are due in September 2001 as part of RSL COMs Commission Plan 2000.

Barry Clifford of Bath-based Avon Technical Services owner said:

I assume that the yearly bonuses wont be paid. That wont affect us much because we didnt expect payment. Other dealers subsidised new connections on account of those bonuses and they (Cont P10) will really feel it. Karen Fulbrook of Hampshire Radio Phones said:

I think we can kiss the commisions goodbye. It feels like Im being dangled over a precipice. We all knew it was going to happen.

Fulbrook and Clifford agree that whoever decides the company needs to do so now.

Fulbrook added:

The longer they leave it the less there is left of it. By Friday most of my customers had agreed they would move to another service provider if we need to.

They dont want to lose the service theyve had from us for the last 12 to 15 years.

Whoever buys the base needs to do it fast or there will be no dealers or subscribers left Fullbrook warned.

Clifford also says dealers wont wait around too long for a buyer.

The adminstrator needs to sell the business now because he must be inundated with applications to migrate customers to other service providers from dealers and for disconnection notices.

Customers need to maintain their service. Dealers need to make a living and look after their customers. I hope they get something sorted out by the end of the week or they wont have anything to sell. There are 70 or so very loyal dealers whose sole business was RSL. They wont sit around and wait for something to happen.

Im extremely disappointed that this has happened from a company perspective and on behalf of our customers. We supported RSL COM from day one. We are in a difficult situation because we dont know what to do with our customers. No-one is processing anything at the moment and in my view that means RSL is in breach of its contract.

Clifford says hes not convinced Barry Mowbrays buyout attempt was all it was cracked up to be.

I understand the administrator set a date of July 31 to sell RSL COM. I assume some of the people bidding were trying to play a joker and wait until after the deadline to buy it at a bargain price. Ive got no idea who will buy the base. There arent many companies that could buy it.

Says Fulbrook:

I think we were gullible to believe the management buyout would work. Obviously it fell flat on its face last week. Dealers are moving their customers to other service providers. A year ago most people started to hedge their bets and to spread their connections through more than one service provider. RSL has never been good at paying commissions. None of us can do anything until the new service provider takes over We cannot service our customers. We couldnt afford to move all our customers to another SP in March in case the buyout had succeeded. No one was likely to buy the company knowing they could wait until the administrator was forced to sell it off for a much lower one. Someone will buy it. The problem is who and how quickly? I wont give my business to anyone.

RSLs troubles began last year when the company laid off 60 staff following a shift from the consumer to the business market.

This March the company went into adminstration but was allowed to continue trading normally after parent company RSL COM Europe and a number of other RSL COM sunsidiaries went into administrative receivership.

At the time managing director Barry Mowbray told dealers:

It is business as usual for the UK company. Commissions will continue to be paid as usual.

PricewaterhouseCoopers the parent companys provisional liquidators indicated that it wanted to sell the business as a going concern. Its US parent suspended interest payments on some of its bonds and reportedly deferred repayment of a $100m loan.

Knights worked for 3@ telecom between 1994 and 1997. Vodafone acquired 3@ in 1999 for 7 million.

Knights originally demanded that 3@ boss Freddie Fazelynia (who is now a director of Yes Telecom) should pay. Fazelynia refused and Knights legal advisors told them to go after Vodafone as it was a company debt.

At a hearing at Manchester county court last June Vodafone successfully defended Knights action. However Knights appealed against that judgment on the grounds that Vodafone broke Civil Procedure Rules (CPR) by manipulating evidence.

The latest development is that the Court of Appeal has backed Knights case and listed it for a full appeal hearing.

Knights proprietor Allan Knight said the company now has a great chance of winning its action against Vodafone.

Vodafone now has to overturn the statement made by Lord Justice Clarke. We have a great chance of winning he told Mobile News.

Knight is seeking exemplary and punitive damages for the destruction of his business and claims non-payment was a deliberate ploy.

At the time of going to press Vodafone and Freddie Fazelynia were unavailable for comment.

Meanwhile a spokesperson from the Department of Trade and Industry was unable to confirm or deny industry rumours that the RSL COM directors were under investigation over allegations that RSL COM was trading while it was insolvent.

A Vodafone spokesperson told Mobile News:

Such investigations are not conducted publicly. We investigate hundreds of allegations a year and never issue comment until our investigations are complete.

We are buying 40000 RSL COM customers who are connected to Vodafone. We are also acquiring a handful of BTCellnet customers who are part of one particular account. The deal will take effect at the end of October. We are not going to reveal the amount paid. In the acquisition of these subscribers it is Vodafones intention to work closely with the dealer community who were involved with RSL COM so that we ensure the future retention of those customers.

Up to 60000 BTCellnet accounts were initially involved when RSL Com went into administration. However because of the protracted nature of the negotiations some customers will have churned as dealers sought to protect their positions.

At the time of going to press PwC said the situation is progressing and all parties are working hard to bring the deal to a conclusion.

BTCellnet sales director Mark Stansfeld said:

We have made significant progress and fully expect to have completed the assignment of RSL customers who are connected to BTCellnet (by the time people read this report). It has been a protracted process because of the complexity of the RSL situation and having to work through Pricewaterhouse-Coopers.

We are writing to all (Cont P2) end users and to dealers with whom we have a direct relationship to clarify the position. Any BTCellnet accredited dealers or distributors with whom we have an ongoing relationship will earn commission on RSL accounts as per the current BTCellnet commission arrangements.

We were under no obligation to pay ongoing commissions but we have a responsibility to dealers with whom we already have a relationship. Dealers had a revenue stream from RSL customers. These customers still need to be serviced.

Stansfeld confirmed that dealers could not expect payments under the RSL CP2000 plan due in October.

We cant do anything about the October payments that are due to dealers from RSL in accordance with the CP2000 plan. Wed like to help but there simply isnt the money. Anybody who hasnt already developed a relationship with BTCellnet is welcome to talk to us provided they deliver high-value post-pay customers. There has been some indicationthat the RSL base is 60000 customers. But some may have been churned. Some will have fallen by the wayside as will be evidenced when due diligence is conducted Stansfeld said.

A Vodafone insider told Mobile News:

We started getting closer to RSL COM dealers last year because we had our doubts as to whether RSL could pull this one off.

Half of these dealers already had a relationship with us. But we should be able to pick up some additional business as a result.

Our concern has to be to maintain the base. If we dont have a relationship with the dealers they are going to churn pretty aggressively. We have evidence that the RSL base is already suffering substantial levels of churn.

The injunction application is an escalation of the war between Myers and Ackroyd (Mobile News September 3) which has intensified with accusations by Myers that Ackroyd has locked him out of his own business and is trading unlawfully.

Meanwhile Ackroyd has set up his own business called Cellular Trade Accessories funded with his own money. Myers told Mobile News:

We had a difference of opinion and decided to discontinue the partnership. I went out to arrange funding to make a verbal offer for share of business which he declined.

He has since secured the premises with his own locks and decided to continue trading. I have not left the business. I have agreed to dissolve it.

Myers said he was one of the original founders of Prima in 1997 with his cousin Paul Myers.

He said Ackroyd became a partner a year ago after paying a small fee to his cousin for the goodwill element.

I have instructed solicitors to deal with the matter. They wrote to him warning him to stop trading.

He (Ackroyd) has conceded that he cannot use the Prima name. But he is still trading from the premises. Not a single cheque has since been banked into the Prima bank account. Creditors will be paid in full.

The courts will hopefully appoint some independent accountants to go in within the next few weeks.

Ackroyd said he had taken legal advice.

We owe creditors money and debtors owe us money. I am only trying to liquidate the stock to pay off the creditors.

We cant just walk out of the building and lock it up without paying the landlords.

I am safeguarding the stock and our interests. I wrote to all creditors asking them to continue paying cheques to Prima. Creditors are being paid.

I have taken over the lease on the Prima premises but we will move if we have to.

I made Myers a reasonable offer to buy his share of the business but he declined it.

He has not been locked out of the business. He can come in and see me anytime that he wants to said Ackroyd.

We are looking at Odyssey but no deal has been signed said a Carphone Warehouse spokesperson.

A Leonard Curtis spokesperson said:

We cant comment on prospective buyers but there has been lots of interest.

The administrator looks to be facing a losing battle to keep Odysseys 20 stores open after industry sources revealed a number of key suppliers owed money by Odyssey are refusing to supply further stock.

A decision on whether all stores would remain open or not was due last Monday but was postponed to the middle of last week.

Leonard Curtis had intended to let all the stores continue to trade and sell the business as a going concern. But with stock dwindling the stores will not be able to remain open unless stocks can be replenished.

Elite managing director Ajay Gokani confirmed his company was no longer trading with Odyssey due to outstanding debts.

We stopped trading with them some months ago. The debt is underwritten by our insurance company so we are not unduly worried about the situation he added.

Meanwhile it has also been revealed in Odysseys last accounts show that Odyssey directors Russell Park and Karmi Corine awarded themselves a dividend of 124000 each despite the company turning in a loss of 500000 in the year ending March 2001. Park and Corine appear to have justified the payment based on the profit Odyssey made in the previous year.

At the time of awarding (Cont P2) themselves the dividend Odysseys accounts showed that the company owed at least 600000 to creditors on the balance of assets and liabilities despite turning over 15 million.

Leonard Curtis stated that Odysseys turnover rose approximately 400000 to over 16 million in the year ending 2001. But it is not known whether the company made a profit or loss.

The administrators decision to close stores could end he dispute between Odyssey and Primemark over allegations that Odyssey used unlicensed copies of Primemarks Foneman software in its stores.

Primemark director Asif Laher said:

If the stores do close we may be able to gain access to our software and remove all unlicensed copies from Odyssey. We are still awaiting a decision from the administrator.

Chief executive Keith Curran said: Every angle is being explored whether it is sale or acquisition. The market has changed drastically in the last few months and that has delayed a decision. Initially it was thought that CellStar might sell. Now we have been looking at possible acquisitions.

Curran told Mobile News:

When we announced the European strategy review last April most of the feedback from the European business indicated it was interested in talking to the US parent company in terms of buyouts. I can state categorically that no decision has yet been made by the US parent company to sell any part of the business. We are still working very closely with Andersens the appointed consultants. For the moment its business as usual for us.

Curran has appointed John Acornly to run CellStar UK as acting managing director.

Brian Semple left the company earlier this year. John Acornly has taken his place as acting MD until the strategy review is completed.

In April Curran said that CellStar had appointed consultants Andersen to assess in the middle to long-term where the market is going and what CellStars options and opportunities are in that marketplace. It is very important for CellStar as a major player to have a key role in every region he said.

Main creditors are believed to include CellStar Elite Mobile Accessories Motorola and Air Call.

Leonard Curtis partners Stephen Swaden and Jonathan Schapira are the appointed administrators.

A Leonard Curtis spokes- person confirmed:

Odyssey Corporation PLC went into administration on Tuesday August 28. The stores will remain open for business as usual. None of the 112 staff have been laid off. We are looking to sell the business including all 20 shops as a going concern. We cant confirm how much money is owed to creditors at this time.

Industry sources close to Odyssey have revealed that the company owes at least 600000 to several UK distributors. One 2 One is understood to have met Odyssey directors last week in order to ascertain the situation. Director Russell Park declined to elaborate on the situation saying:

Everything has happened so suddenly. I cant comment on the situation. My head is spinning (Cont P2) right now. Well talk in the next few days.

The news comes four months after Park told Mobile News that Odyssey was not suffering financial problems.

In April Park said: we have had a successful year. Turnover has reached record levels and profits to the year ending February 2001 are expected to be in the region of 500000.

Odyssey co-founders Russell Park and Carmi Korine started out advertising mobile phones at competitive prices in the London Loot 11 years ago. By 1999 Odyssey was turning over 12 million from 28 stores and had ambitious plans to expand to over 40 outlets. Odyssey aimed to turnover 22 million in 2001-02.

A Leonard Curtis Spokesperson said Odysseys turnover to March 2001 was well below that target at just 16 million.

Software company Primemark responded immediately to the news claiming it would take legal action against Park personally. Primemark has had a long-running feud with Odyssey over allegations that Odyssey used unlicensed copies of FoneMan software in its branches in Hatfield Croydon Coventry Ilford and Basildon (Mobile News April 16).

Primemark director Asif Laher said:

We understand that Odyssey Corporation has been placed into the hands of administrators. The position of Odyssey confirms the real reasons we have been stating all along for it being unable to pay its debts and totally vindicates the performance of FoneMan software against claims made by Russell Park. We have instructed our lawyers for advice on recovering the debt against the administrators and also for action against Mr Park personally given that company directors can be personally liable for breaches against the Copyright Designs and Patents act.

Primemark previously had a bankruptcy petition against Odyssey for bad debt overturned by the Royal Court of Justice (Mobile News May 29) and was forced to pay Odysseys costs of 12000 plus its own costs.

Myers left the business a fortnight ago. Ackroyd is running the dealer side of the business until he and Myers can agree terms over the dissolving of the business.

Ackroyd said he was personally paying smaller suppliers until funds can be released from the business account.

The company is now called Richard Ackroyd trading as Prima. I am running the business using my own funds until we can unfreeze the Prima bank account. We are extremely cash-positive.

Currently Phil Myers is unavailable to co-sign cheques. Larger suppliers are aware of the situation and have been made aware that we have sufficient funds to meet our obligations.

There are enough funds to pay what we owe leaving enough left to reward Phil and myself for our hard work over the last year or so. Smaller suppliers are being paid. Our suppliers have been very accommodating so far.

Theres not a lot we can do right now for the major creditors. But I would be surprised if we owed money to smaller trade creditors.

Ackroyd says Myers originally offered to buy the company outright but the two men couldnt agree on a fee.

It has all come as a shock to me. A fortnight ago Phil said he wanted to buy me out. Then he left to talk to some backers. Not long (Cont P2) after he faxed through a proposal. We hadnt had an opportunity to discuss it before I was sent another fax.

It arrived the following Monday stating he intended to dissolve the partnership said Ackroyd.

This was confirmed by a letter from his solicitors. He then approached the bank and froze the account without my knowledge.

Now he has faxed a number of customers telling them that we are trading illegally.

He is threatening us with a high court injunction to stop using the Prima name. If he wants the Prima name he can have it. We are quite willing to change the name. It looks like we might be trading as Trade Accessories from next Monday. Im not sure what Phil wants to do.

We are continuing to support dealer sales. Phils expertise is on the trader side. As far as Im concerned its business as usual.

Support from customers has been surprisingly high. We wont be able to retain all customers because some of them were his personal friends.

Ive not fallen out with anyone over this situation. We are better-placed to serve the dealer market because that is what we are focusing on. Im concerned though at why we have got to this stage.

If Phil wanted to buy me out he knew what the company was worth. Maybe we could have run the business as two separate companies.

I cant explain why Phil has decided to leave. Maybe he found some other backers who wanted to set something else up. I wish we could sit down and sort this out over a cup of coffee. Instead all I keep getting is letters and faxes from solicitors said Ackroyd.

Phil Myers was unavailable for comment.