IT and business consulting supergroup Growthops could be left waiting for well over $1 million in unpaid bills following the collapse of a number of businesses belonging to financial infrastructure and technology provider Sargon.
Adam Nikitins and Stewart McCallum of Ernst & Young (EY) were appointed administrators of Sargon CT Holdings, Sargon Superannuation Holdings and Sargon Services on 3 February.
Publicly-listed Growthops has warned its shareholders that it is now assessing the impact on its business of recent developments regarding the voluntary administration of the affected Sargon Capital entities.
“Various Sargon entities have been clients of Growthops. The company considers it prudent to disclose to the market that the aggregate amount owing to the company by these various Sargon entities is less than $1.8 million,” Growthops said in a statement.
“The company is in the process of determining whether any or all of the amounts owing are recoverable. We will be working with the appointed receivers and administrators to clarify the position as quickly as possible,” it said.
Looking forward, Growthops said it plans to assess whether a “provision should be made against trade receivables when it releases its financial results for the half year ended 31 December 2019 at the end of February 2020,” essentially flagging the possibility that the amounts owed may not paid in full or at all.
The warning comes just a day after Growthops founder and former non-executive director Phillip Kingston, who is also founder and CEO of Sargon, resigned from the company’s board.
Kingston’s departure was part of a broader transition for the company to a new board and management team on 13 October 2019.
“We are grateful to Phillip for his vision and leadership. He saw the industry was in a period of structural change, driven by changing client and consumer preferences, coupled with the impact of technology,” non-executive chairman Scott Tanner said at the time.”In response, he brought together a group of entrepreneurs to form GrowthOps.
“We sincerely appreciate Phillip’s dedication, drive and unwavering commitment to the Company, its staff, clients and shareholders. He has also been a source of stability and continuity for the business as we transitioned from the prior management team and board.
“With the handover now complete, Phillip has decided that the time is right for him to step down from the board,” he added.