While most of the funds are as yet unaccounted for, creditors were eager to discover what was going to happen to the approximately $13 million which has been traced back to a loan to Froggy Holdings, which is 65 percent owned by Suleman.
In an attempt to avert the forced sale of Froggy ISP and Froggy Mobiles, the man charged with making the ISP profitable back in June, John Karasmanis of Karasmanis Business Services Group, has presented the liquidators with a -business plan" which is understood to include a -compromise of debt".
According to the liquidators, the -compromise of debt" could lead to a diminution of the amount owed to KSE creditors, however, attendees of the Froggy-related meeting, held directly after the main meeting of creditors, were allegedly told that they would not get any less money if the company were to remain in operations, and potentially get substantially more, according to a source.
Karismanis allegedly told a group of about fifty creditors who remained after the initial meeting had broken up that he was initially appointed to Froggy ISP to -clean everything up" in June this year, according to the source. He apparently asserted that he had nothing to do with the original operators and described the recent spate of sackings as proof that he meant business.
At approximately the same time Karismanis was called in to work with Froggy, Karl Suleman's lawyer, and former NSW Minister for the Environment, Tim Moore, was allegedly appointed to represent Froggy ISP in a contractual dispute with an unnamed broadband supplier.
The source said Moore told the small crowd that the attempt to save the Froggy ISP and mobile businesses was a suggestion of Karl Suleman's, because he believed the company would be worth more if it were allowed to remain a viable operation.
Karismanis said Froggy's billing system was in such a bad state when he was first contracted that in the month of May only $50,000 was collected from customers, while overheads were running at around $600,000 to $700,000, according to the source.
He apparently went on to explain that when the new systems, including extensive credit card-based billing, kicked-in in July, the company was almost able to cover costs, with subsequent months leading to an increase in fully paid subscribers. According to the meeting attendee, Karismanis described November as the company's best month ever as it managed to become profitable for the first time, collecting $697,000 from subscribers.
If accepted by the liquidators, Karismanis' -business proposal" will see Froggy ISP and Froggy Mobiles combined into a single unlisted public company, however he allegedly said that in order for the plan to be a success he would have to attract 20 new investors.
Karismanis also alegedly confirmed he had received an offer from OzEmail for the Froggy ISP subscriber base, however he refused to reveal how much money was involved. He did say however, on repeated occasions, that if sold now the company would roughly be worth $400,000. According to the source indications were, that Karismanis was eager to offload what he described as non-ISP assets bought in the company's name earlier in the year.
Although Karismanis is working hard to convince creditors of the benefits of the deal, ultimately the decision lies with the liquidators, who are currently reviewing his proposal.
Their ISP service is absolutely shocking. The sooner they close down the better.