Three big accounts held by Spike prior to the buy-in were British American Tobacco Australasia, Adultshop.com.au and adult products supplier Sharon Austen. A source close to the company has told ZDNet Australia that despite the large business generated by these accounts, they were deemed undesirable according to the Islamic beliefs of TechPacific's owners and Spike was ordered to drop them.
Tim Mendham, communications consultant for Spike, refuted the suggestion and said a culture clash was not behind its recent financial woes. -Certainly they weren't make or break clients," he told ZDNet Australia. -I started in April last year, and we weren't working on them then. As I understand it [Spike's problems are] a combination of current market conditions and working capital - cost versus revenue."
ZDNet Australia was also told it was difficult to get the company to agree to take on Ruski as a client, because it is an alcoholic brand.
-From my experience I haven't seen that at all," Mendham responded when asked about a possible culture clash between Spike and its owners. -Techpacific is a very entrepreneurial organisation, a venture capital company, and if you look at some of the other companies they've invested in...I've never had any great problems."
Techpacific's other investments include Crosby, a corporate finance and investment banking firm, and two venture capital funds focusing on new technology companies in the Asian Region.
Techpacific has registered two charges for AU$21 million in advances it has made to Spike, however the administrators yesterday told a meeting of creditors the charges would not be enforceable, and the claims may be limited to between AU$200,000 and AU$500,000.
The administrators also revealed Spike owes employees around AU$2 million, and has further debts of AU$3.7 million. It is owed AU$27 million, but AU$11.6 of this is from Spike subsidiaries in Asia, which are secured in favour of techpacific, and recovery of those debts is unlikely, according to the administrators.
If Spike is not sold in the immediate future, it will be wound down within two to three weeks. Mendham told ZDNet Australia negotiations with potential buyers were proceeding, and a sale is expected in the next few days, although he admitted he had not been told the identity of the potential buyer.
