Former shareholders in troubled Melbourne IT reseller, TLC IT Group, have used the latest creditors’ meeting to call for further investigation into the now defunct entity.
According to documents posted to the Australian Securities and Investment Commission, TLC IT Group was liquidated on April 16, along with its subsidiary, TLC Data Security. A creditors’ meeting overseen by liquidator, RSM Bird Cameron, was held in Melbourne on April 27.
According to official documents, TLC IT Group managing director and majority shareholder, Alan Chapman, appointed liquidators to the overarching entity. Separately, Avnet filed a wind-up order against TLC Data Security for unpaid debts worth nearly $250,000, forcing its demise.
Alongside a 55 per cent stake in TLC Data Security, TLC IT Group held a 100 per cent stake in TLC Managed Services, and a 40 per cent shareholding in TLC IP Networks. Despite the failure of the parent company, the latter two entities continue to trade.
The fate of the TLC IT Group business and its various subsidiaries has infuriated former minority shareholders and executive directors, Jan Chapman and Craig Boyle, who claim they have not been paid rightful share entitlements or outstanding loans made to the company in recent years.
During the creditors’ meeting, Jan Chapman alleged significant discrepancies between information provided by company directors, and total business assets. The pair used documents outlining the rapid movement of shares out of TLC IT Group into a separate company, Big Bog Pty Ltd, in the days before liquidators were appointed. It is understood Big Bog Pty Ltd is owned by Alan Chapman’s defacto partner.
“Our objective was to convince the liquidator that they needed to investigate this further as we believe assets have been moved out of the business prior to liquidation, and it wasn’t simply a formality,” Jan Chapman told ARN.
Boyle and Jan Chapman bought a 20 per cent stake in TLC IT Group several years ago, but resigned in October 2009 following disputes with Alan Chapman over finances and future direction. After months of chasing payments and information about the business’ viability, the pair were informed that they should have divested their shares in the business 30 days after resigning.
A third-party evaluation was completed by Whelan and Cook in March based on TLC IT Group’s unaudited books for the year to October 31, 2009. In a letter sighted by ARN, the accounting firm valued the company at just $100 and sent Jan Chapman and Boyle cheques for $20 on March 26, 2010.
Notably, the Whelan and Cook letter stated TLC IT Group and its related companies could not be valued “on a going concern” basis, raising speculation of subsequent trading while insolvent. It reported TLC IT Group’s net tangible assets were deficient by at least $600,000, while pre-tax earnings in the year to October 31 were a mere $34,260.
“Overall, it is highly probable that the entire group will be put into liquidation and the entities will cease trading,” Whelan and Cook stated in its letter.
Alongside an initial shareholders’ investment, Jan Chapman also claimed he is owed $100,000 for an outstanding loan, along with at least $17,000 in unpaid credit card debt. Boyle, meanwhile, has filed for $20,000 from a loan to the business, on top of his initial $100,000 shareholders’ investment.
Although initial creditors’ documents valued TLC IT Group’s debts at $527,962, Jan Chapman said additional claims saw the figure rise to more than $600,000. The latest costing includes $23,000 in outstanding superannuation claims, along with additional creditors. According to initial liquidator documents sighted by ARN, other creditors in TLC IT Group include Exonet Services ($23,183) and the Australian Taxation Office ($135,340).
Alan Chapman had not responded to repeated requests for comment at time of publication.
TLC IT Group and its subsidiaries have no affiliation with TLC IT Solutions in Queensland.