The directors of Sunlit Technology are embroiled in a bitter dispute concerning financial records and the division of company assets following their decision to dissolve a three-year partnership.
Caught in the crossfire are suppliers, one of which is considering legal action against the directors (see p1), which could see Sunlit thrown into liquidation.
Sunlit Technology had grown from a single store in 1995 to an eight-store $20 million conglomerate.
The dispute involves founding director David Wu and former partner and director Paul Johnson, who bought into the company in 1998. At the time, Sunlit had two retail stores.
Now Johnson claims he is unable to gain access to the company's financial accounts kept by Wu and Wu's wife, Dianne, the acting financial controller.
Wu, on the other hand, is pointing the finger at Johnson, claiming he has taken sole possession of jointly owned stock and is trying to avoid liability for the company's debts as a 49 per cent shareholder.
Unable to resolve their differences, Johnson and Wu signed a heads of agreement on September 20 to split the business. In this document, a copy of which has been obtained by ARN, company assets including the eight stores, office furniture, transport vehicles, accounting package, IT infrastructure and company naming rights were divided equally.
However, the company's current stock, representing the majority of the business value, was not included in the document.
Since dissolving the partnership, Johnson has taken control of four of the stores as part of the heads of agreement. He has since changed the locks on these premises, and has begun trading under the business name Sunlit Technology Compugate.
According to Johnson, the heads of agreement was to be the forerunner of an independent third-party audit of the remaining stock, which would then be divided equally. To date, this has not happened.
In the meantime, he claims ownership of the stock from the stores he has taken control of, as per a verbal agreement with Wu, and will continue trading.
Wu said the stock belongs to the original company prior to the partnership being disbanded. He said the stock cannot be traded under Johnson's new business name, and he demands it be returned to Sunlit in order to pay creditors.
When ARN contacted the Department of Fair Trading in Queensland, a spokesperson said it had conducted a limited investigation into Sunlit but deemed the situation and all stock involved to be a "dispute between two directors".
The conflict came to a head earlier this month when Wu entered a number of Johnson's premises to physically take back the stock in these stores. Indooroopilly Police were then called to a "disturbance" at the Toowong store location where Wu and Johnson were in confrontation.
Johnson said he has sought a peace and good behaviour order against Wu, for a separate incident in which Wu allegedly damaged property as he tried to enter one of the stores and assaulted Johnson's father who was in the store at the time. Wu told ARN he did force entry into the store but denied assaulting Johnson's father.