Monday's announcement that ASIC was seeking to join a series of the Froggy companies in its proceedings against KSE have been met with a strongly worded letter accusing ASIC of a -serious error in judgement", composed by Karasmanis.
In the letter Karasmanis argues that by extending its proceedings to include Froggy Holdings, the company name under which the Froggy's ISP business operates, ASIC will ultimately force a potentially profitable company to a fire sale.
-I understood that ASIC with respect to the Froggy group and the KSE issue was interested in... protect[ing] the interests of the aggrieved investors," Karasmanis said in the letter. -ASIC has in fact now ensured that their expected returns have been reduced significantly."
Although contacted by ZDNet Australia, ASIC was unable to provide a comment by press time.
Essentially Karasmanis is arguing that Froggy Holdings will potentially be worth more to investors if it is allowed to continue to operate according to a plan which he submitted to Howarth accountant Neil Cussen the morning before KSE was voted into liquidation.
-We are looking into the plan, however we are reserving our judgement until we receive further particulars from Froggy management," Cussen told ZDNet Australia.
Karasmanis and Cussen are believed to be meeting on Monday of next week to discuss the business plan.
However, it is unclear at this stage who will ultimately determine Froggy's fate. As Karasmanis directs his attentions towards KSE liquidators, and ASIC similarly other ISPs are directing their attention towards Froggy's infrastructure and customer base.
Froggy finds a friend
While Froggy initially knocked back predatory take over offers, yesterday Karasmanis told ZDNet Australia he was in discussions with iPrimus, and would review any offer which sought to maintain the company's operations and its staff.
-I don't just want to sell of a customer list," Karasmanis said. -This company is a very sound operation, and there are a lot of people working here who want to see it continue."
iPrimus general manager Ash Chopra told ZDNet Australia that he was looking forward to working with Karasmanis to put together a plan which could see a more secure future for Froggy subscribers as well as the over 80 employees at Froggy's Liverpool call centre.
-We want to avoid a situation where the Froggy user base may end up being sold for less that the monthly revenue created by each customer," Chopra said. -When One.Tel went down customers were simply shunted onto another services provider, which reflects badly industry generally. We are looking for a way to maintain continuity for subscribers and perhaps even improve their service, and save a lot of the Froggy infrastructure, especially the staff."
Chopra confirmed his interest in working with Froggy's loco-parentis Karismanis, in his petitions to Horwarth and ASIC.
-We are interested in working very closely with Karismanis to save Froggy," Chopra said.
Where's the Loot?
According to Horwarth accountants, and KSE liquidator Niel Cussens, the Froggy Group, which consists of ten companies in all, owes KSE creditors over $13 million. However, it is unclear at this stage how the money was distributed across the companies registered by Suleman.
Karismanis told ZDNet Australia that most of the money was spent on non-core purchases, such as planes and cruisers, which Suleman made under the name of one or other of the Froggy companies. He also said poor business practices lead to a lot of money being lost on run away overheads, until Froggy Holding's billing processors were brought under control in July.
-Once you take away the stupid things that Suleman bought, that have nothing to do with running an ISP, you are left with a company with a lot of potential, as long as we can convince ASIC to stay off our backs," Karismanis said. -I want to get rid of all of that and just focus on running the business."
For full coverage of the trials of Froggy ISP,
check out ZDNet Australia's comprehensive report:
Hot topic: Froggy
I heard that they kicked John Karasmanis butt out of froggy? ROFLMAO this is so funny see one day your the boss sacking whomever you want the second your unemployed, goodluck mate try seek.com.au
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