E-Store may face ASIC probe - News - Business

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This story was printed from ZDNet Australia.
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E-Store may face ASIC probe

By Rachel Lebihan and Cass Warneminde, ZDNet Australia
October 09, 2001
URL: http://www.zdnet.com.au/news/business/soa/E-Store-may-face-ASIC-probe/0,139023166,120261023,00.htm

The Australian Securities and Investment Commission (ASIC) said it cannot disclose whether or not it's currently investigating beleaguered e-tailer E-Store for allegedly trading while insolvent, despite widespread claims that formal complaints have been lodged with the regulatory body.

One out-of-pocket supplier who contacted ZDNet Australia on the condition of anonymity said E-Store continues to list its branded products for sale, despite the fact it has stopped providing the e-tailer with product since it allegedly reneged on a $17,000 payment.

The same supplier alleges that E-Store also owes three other vendors a combined total of more than AU$1.1 million.

The total level of E-Store's debt remains undisclosed.

A company official said it had made initial arrangements to launch a class action lawsuit against E-Store in order to recoup alleged delinquent payments, but this plan was thwarted when the e-tailer went into voluntary administration, effectively protecting it from outside legal action from non-secured creditors.

The news comes at a bad time for E-Store, with management set to face angry suppliers tomorrow at its first creditors' meeting.

Joint voluntary administrator Ian Purchas of Star Dean-Willcocks, said he couldn't give -much meaningful information at present...I haven't been in this long" and stressed that the administrator is required under Corporations Law to hold the creditor's meeting.

Purchas would only say that a number of creditors are -commensurate with the number of creditors in a company of this size," and said at tomorrow's meeting he would release some ballpark figures on the total number of creditors and what they're owed.

Purchas and partner Ron Dean-Willcocks were appointed as administrators on October 3.

The administrator's report to creditors - which will include details of a deed of company arrangement -- will be released on October 22, and a second creditor's meeting is scheduled for October 30.