Staff Reporter

However Rocom has vowed to challenge Oranges right to issue clawback claims. If Rocom wins its appeal there could be wide-reaching implications for Oranges other distributors and direct dealers.

Rocom had been defending a 1 million clawback claim by Orange claiming Orange employees had authorised irregular connections made through two of its former dealers. Rocom chairman Bob Old lodged a counter-claim alleging that Orange employees were to blame for the situation. But that claim was dismissed by the judge at the hearing on October 22.

Orange issued a statement saying:

The judge rejected most of Rocoms defences and counter-claims. The only outstanding issue in the litigation is the exact amount which is due from Rocom to Orange in respect of clawback commission. This amount will be determined at a future hearing

But Rocoms chairman Bob Old insisted that Orange had won nothing and that he would battle on to challenge Oranges right to (Cont P2) clawback commission. Old told Mobile News.

Orange has made an announcement that it has won its long-running dispute with Rocom by obtaining judgment against Rocom.

Oranges premature and simple statement is misleading. It does not make it clear that when the court order is executed a judgment against Rocom will be offset by credit due to Rocom of a greater amount such that Rocom would be net in credit.

Rocom has been given leave to defend Oranges claim to clawback commissions and to call into question historical clawback of commissions by Orange. Rocom is now preparing a substantial defence and counter-claim.

The net result of which may be that Orange owes Rocom a sum of money because either Orange is wrongly claiming commission clawbacks or has already wrongly clawed back commissions.

The clawback came after Convergent experienced a high volume of disconnections from an unnamed dealer. The dealer has since stopped trading. (Cont P2)

Convergent Telecoms parent company Convergent Communications issued a trading statement stating that the 1 million loss would mean interim results would be below market expectations. Industry insiders say Walsh had to go because he had overall responsibility for connections made through the company.

Convergent chief executive Tony Farmer said the loss would not affect the companys ability to continue trading.

We have suffered a bad debt from a distribution relationship. The loss is irrecoverable and we have written it off on our interim results. The whole of the business remains unaffected. In fact our service provision business is growing well. There will be no further impact on the business following this loss.

Industry sources say he has been in talks with Virgin Retail to acquire some V.Shops.

He is believed to have approached Virgin Retail some weeks ago with a view to purchasing some of their companys stores. The move apparently coincided with Virgins decision to review its V.Shops which resulted in the sale of 40 stores to Sanity Records two weeks ago.

Sanity purchased 100 Our Price stores just under a year ago.

Insiders claim Emanuel is still in talks with Virgin to acquire some of the remaining 60 V.Shops in order to expand his new mobile phone retail chain Tomo which launched earlier this year with a solitary store in Nottingham.

Virgin Retail is still considering a number of options for the (Cont P2) remaining V. Shops including turning some into mini-Virgin Megastores branded Virgin Megastore Express.

In the meantime Virgin Mobile says the sale of V.Shops does not reduce Virgin Mobiles presence on the high street. Virgin Mobile corporate affairs director Steven Day told Mobile News:

Virgin Mobile is sold exclusively as the only mobile phone products in V.Shops. We will continue to supply products to Sanity Records and be the sole mobile phone products in the stores under new ownership.

Blue-I paid a high price for licences to produce fascias featuring cartoon characters from Warner Brothers and the Coca-Cola logo.

Blue-I was formed by Jay and Vimal Pau and used to be known as Fone Range Partnerships (not to be confused with the Fonerange brand now owned by Elite Mobile).

Blue-I commercial director Oliver Brooks declined to comment on the reasons for Blue-Is failure.

Blue-Is collapse will affect people who are owed money by the Pau brothers old company Paragon the former holding company of Blue-I which is also now defunct. (Cont P2) They are unlikely to receive any dividend.

When Paragon went bust in April 2001 its creditors approved an offer made by liquidator Levy Gee which reckoned that they might receive 9p in the pound. This offer was conditional on Blue-I paying Levy Gee 400000 for stock and equipment and the release of Blue-I shares.

Paragons liquidator Simon Glyn confirmed that Blue-Is failure meant Paragon creditors would be left out of pocket. Blue-I still owed Levy Gee 290000 which the liquidator will now not receive.

Glyn told Mobile News: The offer of 9p in the pound was just an estimate. We have not yet agreed all the creditors claims.

An ex-Blue-I employee said the commitment to repay 400000 to Paragon caused Blue-I to suffer cashflow problems.

He confided: In hindsight the goodwill payment was paid at an over-inflated price. It was a burden that Blue-I struggled with as market conditions worsened and sales dropped.

There were other factors too. The value of some (fascia) licences dropped because of cross-border trading counterfeiting and grey imports he said. The two licences most affected were Warner Brothers and Coca-Cola which Blue-I paid highly for. Strong police action was needed to stop this but we did not see it. Warner Brothers tried to deal with these problems but it is a long and difficult process.

He claims he was wrongfully arrested at TAPs premises on August 20 as he arrived to attend an Extraordinary General Meeting of the company.

Ali Khan had been released on police bail following allegations that he had made threats against TAP chief executive Nasa Khan shortly after resigning as a TAP director (Mobile News August 5).

However Kingston Police last week cancelled Ali Khans bail and dropped the case due to insufficient evidence to substantiate the alleged threats against Nasa Khan.

Ali Khan told Mobile News he now intends to pursue TAP directors and the police for wrongful arrest and believes the arrest was a ploy by TAP directors to stop him (Cont P2) revealing to other TAP shareholders and directors why he thinks TAP has breached his shareholder agreement.

The investigation against me has been dropped. My solicitors are looking at comments made by TAP MD Bav Majithia to Mobile News with regard to my arrest and various other matters with intention to take further proceedings against TAP and various officers of the company. We are also in very strong conversations with the police in regards to my wrongful arrest.

He went on: I am left with an impression there was an attempt to ensure I did not present certain issues to the board and to shareholders. This is why I am about to request a further EGM so that I can voice my concerns in front of all the shareholders and directors.

Ali Khan who has been in a legal battle to sever all ties with TAP following his resignation as a director in July claims to have successfully served a statutory demand for payment but stresses that there is still some way to go before he recovers all the money he is owed under his shareholder agreement.

I can confirm TAP was served with a statutory demand for payment. TAP has made the relevant payment but there is still a long way to go before all ties with the company are severed. TAP has other agreements to honour.

At the time of going to press TAP declined to comment.

A letter sent on October 11 to creditors by administrative receiver RSM Robson Rhodes estimated the companys trading losses from April this year at 3.8 million most of which is owed to T-Mobile.

Other major creditors include Barclays Bank which is owed 309000. Robson Rhodes also expects a 263000 VAT claim from Customs and Excise and a 62000 claim from the Inland Revenue (Cont P2) for National Insurance contributions and PAYE.

Current indications are that there will not be a distribution to preferential creditors or unsecured creditors said Robson Rhodes.

A creditors meeting will take place on December 17 to officially explain the reasons behind Pointgolds demise.

Pointgolds directors have blamed the companys fall on the expansion of its retail chain including the 700000 purchase of the Wap Store group as well as reduced sales and lower margins.

Robson Rhodes confirms network operators held back commission payments to Pointgold in September after Pointgold started to run up debts.

The letter to creditors said: As a consequence of increasing indebtedness to the mobile phone operators they reduced commission payments which put further pressure on cash-flow. The company became unable to supply the retail outlets as it was outside terms of its suppliers. Commission payments at the beginning of September were withheld.

Robson Rhodes shut Pointgold when it became clear that T-Mobile was about to terminate Pointgolds distribution agreement. Pointgold traded profitably in 2000 and 2001 reporting profits of 303000 and 833000 respectively.

Howard Philips of accountancy firm Sorskys has been appointed as the administrative receiver.

Agcomm director George Savva says the liquidator is likely to pursue the unnamed mobile phone trader who was paid 419000 for a consignment of mobile phones but disappeared without delivering the handsets.

The matter is now in the hands of the liquidators. We tried to pursue the debt without success he said.

Philips was unavailable at the time of going to press to confirm the identity of the rogue UK trader or whether legal action had been taken against it.

Agcomm also got stung by a 1.6 million consignment of Prada clothing that it has been unable to sell for legal reasons.

We bought the Prada stock from an Italian trading company which supplied us with documents stating that we could sell the stock in any country except Italy said Savva. But the documents were forged and Prada served an injunction against us preventing us from selling the stock in all but a few countries.

Unsurprisingly this caused cashflow problems.

We have been unable to sell the stock even at very low prices he added. We are only allowed to sell the stock in the Middle East and Far East but not Japan. We initiated criminal proceedings against the Italian trading company before we went into administration.

A creditors meeting will be held this Friday (November 1) at Agcomms accountants offices in Regents Park London.

Other Cityphone Group companies such as Talk4All and Phone City Franchises will remain unaffected by Pointgolds fall providing that they can remain T-Mobile stockists.

Pointgold will be wound up. I have not offered to buy it from the receiver nor has the receiver had any bids for the business. It is not worth a penny. We have lost as much money as T-Mobile Cityphone boss Barry Donaghey told Mobile News.

We are working with T-Mobile to try to stop the other businesses from going under. The other companies look very secure. They are owed commissions by Pointgold.

We want to carry on connecting through T-Mobile. The other companies within the Cityphone group remain profitable and should escape any collapse. Other parts of the group are entitled to become T-Mobile stockists. They were stockists to Pointgold the distributor and have their own management teams and are entitled to get stocks from other T-Mobile distributors. It has been a very bad time for us.

Donaghey agreed Cityphones ambitious plans to have a nationwide chain of 100 shops had overstretched Pointgolds resources.

Ironically Pointgold purchased 30 WAP stores in January for 700000 from the same insolvency specialists RSM Robson Rhodes which is now administering Pointgold.

(see analysis P16)

Thomas owns 18.5 per cent of PNC shares and left the company two years ago.

He says the company is being undersold and that PNCS mobile phone business KJC has improved prospects. In the last six months PNCs deficit narrowed from 14 million to 3.9 million.

Thomas is angry that PNC is looking for a buyer because he feels that the low 16p share price will mean minimum return for investors.

He reckons the share price should be allowed to rise based on the fact that rival Opal Telecom fetched 65 million when it was sold to Carphone Warehouse. (Cont P2)

Thomas will seek re-election to PNCs board at the EGM. If he succeeds he says he will move PNC back into profit and raise share value. This would be better he says than selling the company now.

I support the changes made by the board to reduce the losses. However I question the logic of flogging the company for next to nothing Thomas told Mobile News.

Ian Gray (PNCs current chief executive) has done a good job in turning things around. But I am not impressed with the latest results. Selling now would not provide the best value to shareholders. I have doubled my stake in PNC since I left the business. If the company is sold now I will get very little return on my shares which are currently trading at around 16p he said.

Opal Telecom shareholders received nearer 65p per share. PNC Telecom should be worth nearer 30 million to match the value of Opal.

Thomas says he has the support of a number of other shareholders.

Gray shrugged off Thomas claim; The company has not been valued so it is premature to say how much it will be sold for. Geremy Thomas does not have to sell his shares if he feels the offer price is too low. He can put in an offer for the company if he so wishes.

Some PNC insiders claim Thomas wants control of PNC without investing any money. But Thomas claims his previous attempts to buy back PNC were rejected by its directors.

The board asked me to leave after rejecting my plan to split the mobile retail and fixed-line businesses. I left with a significant shareholding which I doubled Thomas explained.

In the past six months turnover fell from 31 million to 28.5 million. Losses reduced from 14 million to 3.9 million.

The furious VSP dealers have been taken on temporarily by Vodafone. They met at the Hilton Hotel at East Midlands Airport last week to discuss action reports Bard Covington.

Vodafone last week wrote to Anglos dealer/virtual service providers telling them that Vodafone would treat them as dealers from the end of the year and that they would lose their status as virtual service providers.

This means Vodafone will take over the billing and management of their customers. Anglo VSPs who reject this offer can take their business to another service provider if they want. But Vodafone has told all its service providers they are not allowed to take on virtual service providers. The Anglo VSPs now resent the possibility of Vodafone obtaining their customers for free and losing their ongoing revenues.

Tim Speer of Folkestone dealer RHA Telecom said:

Vodafone sent us a daft letter which was very ambiguous. Crooked VSPs and Anglos insecure commercial relationships with the VSPs have affected our business but Vodafone cant force us to hand over our customers. The customers signed with us. We signed with Anglo. We didnt sign with Vodafone. We could churn all the customers to another service provider or network.

Vodafone head of sales Iain Graham admitted a letter had been sent to all 24 Anglo VSPs saying Vodafone would support them through Generation Telecom until the end of the year.

We have offered them the opportunity to become direct dealers but that we would take over the management and billing of their customers. Any Anglo VSPs who dont want to become direct dealers will need to take their customers to an independent service provider.

This is not a knee-jerk reaction to Anglos fall. When a (Cont P2)failure like Anglo happens you look to the reasons why. We are looking carefully at VSPs and the issues they raise said Graham.

But in another letter Vodafones service provision division told Vodafone service providers that Clause 11.7 of their licence forbids them from selling or subcontracting airtime to third parties without Vodafones consent.

This letter asks service providers to report any dealers who are acting as virtual service providers and demands clarification as to who is billing the customer.

But very few SPs have been given such consent.