The bitter legal fight between two business partners over control of the acquired ispONE business has brought to light details of the murky sale.
Telecommunications wholesaler Conec2 acquired ispONE in controversial circumstances in August 2013, for $1.7 million, after entering administration as a result of court battles with former partner Telstra and former client Kogan Mobile.
But the business partnership between former ispONE boss Zac Swindells and Conec2 owner Cameron Adams – which court documents reveal created AsiaPac as a vehicle for the sole purchase of ispONE – began to sour towards the end of 2013.
Swindells earlier this month filed a lawsuit against Adams for what Swindells claimed was a breach of conduct and alleged efforts to edge Swindells out of their jointly run operations.
Recent court documents have also revealed Adams and Conec2 did not actually provide any of the $1.7 million in funds to acquire the Conec2 business.
The August 2013 acquisition drew criticism from industry and ispONE creditors after it was revealed ispONE had been approached with three higher acquisition offers than the $1.7 million ultimately accepted from Conec2 for a business with $55 million in annual turnover.
Administrator Ferrier Hodgson at the time said it had accepted Conec2’s offer as it represented the “best return to creditors” due to its unconditional nature and Conec2’s ability to execute a sale agreement immediately, despite the terms of all the bids being materially similar.
According to court documents this week, Swindells financed the acquisition himself, through $150,000 cash; a loan from technology company Medion Australia (with which ispONE had a prior telecommunications wholesale agreement); a mortgage over the home of Swindells and his wife; a charge over AsiaPac; and some funds from a bank account of one of the ispONE businesses.
Adams provided no funds or security to acquire ispONE from the administrators, the documents state.
Neither Adams nor Swindells have responded to request for comment. Stewart McCallum, the Ferrier Hodgson adminstrator appointed to ispONE, today said his company had run a "robust" sale process that had provided the best value to shareholders.
In the court case, Swindells claimed Adams had cut himself and two former ispONE employees off from the bank accounts of ispONE brands iBoss and One Telecom, and had appointed himself the director to iBoss, One Telecom and AsiaPac against a prior agreement.
He also alleged Adams had failed to transfer Swindells’ 50 percent shareholding in AsiaPac out of a trust held by AsiaPac parent company Conec2 Hong Kong, in which Adams holds 100 percent of shares, as agreed.
Swindells requested and was granted an injunction against Adams from operating as a director in AsiaPac, iBoss or One Telecom until the case is heard in the Supreme Court of Victoria.