Despite clambering back from the brink of liquidation, information technology and telecommunications firm Maxis Corporation may still be shut down by the Australian Security and Investment Commission (ASIC) on grounds of negligence.
Maxis, which was placed in voluntary administration in January supposedly $6 million in debt, put forward a deed that would return 100 cents in the dollar to primary creditor Compaq (owed $3.3million), and 82 cents in the dollar to its other 300-odd creditors.
The proposal was all but signed and sealed last week, having gained shareholder approval. According to Maxis executive chairman, Vaz Hovanessian, ASIC agreed to drop its insolvency action against the group if it applied to stringent undertakings. However, the government watchdog, which has copped a public beating in recent weeks for failing to pre-empt the folding of HIH insurance which left thousands out of pocket, is refusing to let go of the negligence claim.
"It seems absurd that they would try to wind up Maxis when we have achieved much better results than in a liquidation scenario," Hovanessian told ARN.
If the group's assets are sold off by receivers PricewaterhouseCoopers, creditors can expect approximately 14 cents in the dollar. ASIC was unavailable for comment yesterday.
The hearing has been set for June 18, however Maxis hopes it may be able convince ASIC to reverse the decision out of court.
Hovanessian said Maxis has already paid significant installments on its debts, including $1 million to Compaq in March. These payments were funded by the group's networking services and data transfer arm, Managed Networks, which is still generating $9 to $11 million in annual revenues and employs 32 staff.
The bulk of Maxis' debt stems from its procurement and hardware distribution business, ABT SupplyLine, while its regional telecommunications and satellite subsidiary Heartland carries 20-odd creditors.
Hovanessian cites mismanagement and infighting as the crux of the group's decline. He adds that the administration process has seen several millions of dollars lost. "We were looking to sell the SupplyLine business for $5.8 million in September. Now it has lost that entire value," he said.