Brisbane-based reseller group, First Technology Cooperation (FTC), has been put into administration after incurring $2.2 million worth of debt.
Queensland accounting firm, Ramsay Clout, confirmed it was appointed as administrator by company director, Michael Kong, on February 10.
An initial creditor's meeting was held in Brisbane on February 16 to discuss the fate of the reseller group. One of the two administrators appointed, Dane Hammond, said it didn't look like there was any prospect of selling the business.
"The company is too far gone," he said. "The owners had already shut up shop when we were appointed."
Hammond said Ramsay Clout had secured the premises and was now in process of evaluating seized stock.
"It doesn't make for good reading," he said. "Things are rather messy - it will take us a while to go through the figures. The company's record keeping is a shambles."
According to preliminary data, FTC's debts run to about $2.2 million. This incorporates $1.4 million in related party debt incurred by directors through loans and company funds.
The remainder represented money it owed to creditors, Hammond said.
Distributors, Bluechip Infotech and Achieva, are both owed more than $100,000. Other creditors include Synnex, Tech Pacific and eSys. A further $10,000 is owed in staff entitlements, he said.
A second creditors' meeting has been slated for next month.
Hammond said the administrators were now working on a report that would recommend whether the company should be liquidated or a deed of company arrangement drawn up. The report is due to be issued on February 28.
FTC operates six branded stores across Queensland. It is understood to be one of two retail companies operated by Kong. The other, First Technology Solutions, is also believed to own two of the shop fronts.
Hammond said the only store to be owned by FTC, in Fortitude Valley, had already closed.
The remaining stores would continue to trade until the relationship of each to Kong's company had been determined, he said.
The news of the group's receivership follows industry reports earlier this month that the company was in danger of collapse. eSys general manager, George Skaf, told ARN it had halted dealings with the reseller last month after the reseller failed to pay outstanding invoices. The distributor had been unable to recover any stock from FTC and was owed about $50,000, he said.
Hammond said administrators were limited in how far they could investigate the assets of Kong until a decision had been reached on the company's future.