Victoria’s Novatel Telecommunications has gone into liquidation, leaving debts of more than $2 million to a range of creditors, including Emersion Software Systems, Wirefree Broadband, Megaport and Loanworks Technology.
Jirsch Sutherland partner, Malcolm Howell, was appointed as liquidator for the Melbourne-based telecommunications company on 16 March.
According to documents lodged with the Australian Securities and Investments Commission (ASIC), Novatel Telecommunications went into liquidation owing more than $580,000 to Wirefree Broadband, nearly $49,000 to Melbourne’s Emersion Software Solutions and $48,000 to Loanworks Technology.
The documents also reveal that the company went down owing around $1 million to Real Property, $27,000 to the Telecommunications Industry Ombudsman (TIO) and almost $6,000 to Megaport.
At a creditors’ meeting held on 11 April, Emersion Software Systems CEO, Paul Dundas, questioned the actions of Novatel’s former director, Marshall Ma, in the lead up to the liquidation, alleging that he lodged a backdated change of director form with ASIC prior to his resignation from the director role.
At the same meeting, Meiting Liu, the landlord of the premises at which Novatel had resided prior to its liquidation, claimed she had heard from her real estate agent that Ma was allegedly in the process of trying to lease new premises in the same building.
Meanwhile, Dundas claimed that Novatel Telecommunications received around $500,000 from the government for a Data Retention Industry Grants program, which was established by the government to help Australian telcos and internet service providers (ISPs) implement the measures outlined in its mandatory data retention regime legislation.
According to the Attorney-General Department’s list of Data Retention Industry Grants program recipients, published in August 2016, Novatel received $698,000 in funding from the government to implement the mandatory data retention compliance measures.
Dundas, whose company provided Novatel Telecommunications with billing and provisioning software until late last year, has raised questions around the allotment of the grant to the company.
“I have advised the Attorney-General’s Department that I believe there was moneys received from the Data Retention Grant that I do not believe are valid,” Dundas told ARN.
According to Dundas, Emersion Software Systems’ products were being used by Ma and the Novatel team to bill the company’s clients and provision services through two brands, NetCube and Blisstel.
“We were advised that the client-base of Blisstel had been sold in late December, and that the client base of NetCube had been acquired, subsumed by another of our clients around the same time-frame,” Dundas said.
“We effectively ceased providing services to Marshal [Ma] at the end of January after the transition of those client bases to other parties,” he said.
According to ASIC documents, Cloudcomm – which had been trading under the Blisstel brand – also went into liquidation in March. Again, Howell was appointed as the liquidator. Ma is listed as the registrant for the blisstel.com.au URL, according to namefiles.com.
NetCube, meanwhile, was the subject of a directions notice by the Australian Communications and Media Authority (ACMA) in December last year, which put the company on notice over its handling of customer complaints.
In a letter addressed to Ma, dated 14 October, delegate of the ACMA content, consumer and citizen division general manager, Jennifer McNeill, said that NetCube, as a trading name of Novatel telecommunications, had contravened the Telecommunications Consumer Protection Code (TCP Code).
Later, on 5 December last year, the ACMA said that it had directed NetCube to comply with the complaints-handling requirements of the TCP Code, following an investigation.
The action meant that if NetCube failed to comply with the ACMA’s direction by breaching the complaint handling rules in the TCP Code again, the authority could commence Federal Court proceedings for civil penalties.
In February 2016, the ACMA identified a rise in TIO complaints about Novatel Telecommunications, trading as NetCube, including an increase in complaint-handling issues over the previous two consecutive quarters to December 2015.
This resulted in an investigation, which found breaches of TCP Code obligations relating to the recording and communication of proposed complaint resolutions, delays in resolving complaints, reasons for resolutions and credit management action for disputed amounts.
Now, although Howell and the team at Jirsch Sutherland are still in the process of working through Novatel’s liquidation, Dundas doubts whether his company will ever see the outstanding money owed to it by the telco.
“I believe we’re going to get zero. I believe the staff will get whatever is remaining and that everyone else will get nothing,” Dundas said.
Ma could not be contacted for comment at the time of writing.