The IT distribution and computer assembly arm of Elite Industries has been placed in administration.
Elite Industries Group Pty Ltd, the arm of Elite that manufactured personal computers and servers as well as engaging in wholesale and retail sales of IT products, is now in the hands of Hugh Wily of chartered accountants, Armstrong Wily and Co.
Elite Technology Group Pty Ltd, a separate arm of the same company, continues to provide monitoring and security products such as digital video recording computer equipment that users would deploy alongside closed circuit television monitoring systems to secure physical premises.
Another related holding company, Elite Industries Pty Ltd, also continues to trade.
The administrator is currently undertaking initial investigations to check whether the company in administration was interwoven with any other operations.
Part of the investigation will involve making sure that any transactions made between such entities are legitimate.
The directors of the company were put in a position where they had little choice but to place it in administration, according to Elite Industries managing director, Robin Lu.
The company’s assembly business was placed under great strain by falling margins and the poor reliability of components used to manufacture its machines.
Much of the blame, the company claims, lies with the manufacturers of motherboards and hard drives.
Elite Industries was particularly hard hit by its decision to use Fujitsu hard drives in its computers.
As reported by ARN, class actions in the US, Australia and other countries allege that, several years ago, Fujitsu released about 4.9 million defective hard drives onto the market.
Elite Industries is involved with a group considering a class action suit against the hard drive manufacturer.
Coincidentally, last year, the legal firm preparing the local class action suit nominated Andrew Wily, of Armstrong Wily and Associates, to act as its representative once the case faces trial.
Lu said Elite Industries had no choice but to offer attractive warranties on its products, despite the temptation to reel in terms or increase warranty prices to combat the high failure rates.
“We have to compete in this market,” he said. “And we have to do what it takes to make the customer happy.”
Queries about outstanding orders are being redirected to the administrator.