Michael Sainsbury | June 03, 2008
THE stench coming from mobile phone retailer Allphones is so bad that it is hurting Allphones chairman Tony Mitchell's membership of the expert panel overseeing a tender for the new national broadband network.
Mitchell is certainly not responsible for any of the behaviour of the company he chairs - mobile phone retailer Allphones - described in ugly detail in a court finding last week.
In fact, he is probably regretting not resigning from the largely ceremonial position of chairman at Allphones after the company failed to drum up enough interest for a stock market listing, or even a trade sale. In Sydney's Federal Court on Friday an Allphones franchisee, Hoy Mobiles, won a judgment against a company they had accused of ripping them off.
The court found that Allphones management, led by chief executive Matthew Donnellan, had engaged in engaged in "calculated dishonesty" and "continuing deceit" by withholding commission payments to franchisees.
Donnellan came in for blistering criticism from the judge. "I find that Mr Donnellan considered that Allphones could do what it wanted in accounting to its franchisees for commissions, without regard for its obligations" under a clause in the contract, Justice Steven Rares said.
The Hoys - themselves not blameless, as almost half their compensation was taken back for their own bad behaviour - and other Allphones franchisees are long-suffering if you take some time to read the judgement or listen to some of the franchisees' stories. A substantial group of disaffected Allphones franchisees is mulling a class action against the company, and their time may have come.
Worse still for Allphones and Mitchell is that the company is under investigation by the Australian Competition and Consumer Commission over claims to its franchisees.
A number of executives, including Donnellan, are being taken to court by the regulator, too. Friday's judgment will surely be plenty of grist for their mill.
Every story inked on this matter has the potential to mention Mitchell - and Conroy's panel.
The mobile phone retail sector has been likened, time and again to the used car market of the digital age. In fact, Australia's first major third-party mobile phone retailer was car accessories chain Strathfield Car Radio.
In the first bloom of the mobile boom in the mid-1990s, as Telstra's main non-branded retail chain, Strathfield was where One.Tel chief Brad Keeling and many others got their start.
Slick salespeople made fast and very good money and sometimes, like Allphones, they cut one or two too many corners.
None of the mobile phone companies - Optus, Vodafone, 3 and Telstra - which have benefited from the Allphones sales pitch, would comment on the case yesterday.
One said it was "still digesting" the result.
Indeed, it may give them indigestion and perhaps pause for thought. Are these the people that Paul O'Sullivan, Nigel Dews, Russell Hewitt and Sol Trujillo want to do business with?
Are they people that Stephen Conroy, Kevin Rudd and Lindsay Tanner want to do business with?
Your Comments:
6 Comment(s)
It is all very well and good just to investigate all phones which the paper tigers is doing, however to be completely thorough they should also investigate other telecommunication companies/franchise such as 3. With call centres located in foreign countries the service is equally as bad.
tipoff is entirely -incorrect- this is not, and has never been the case. Please do proper research before going off.
their franchise is pretty poorly run. they lose money in every sale they make - they use a tactic in getting customers connected they advertise a certain phone at a cheaper outright price than everyone else and when they come in for the phone they say we only have one left and its for a contract only and you can guess the rest
Is this the start of a class action? This is not the main case. The next big story is the ACCC case! How can the chairman keep the current board?
What a great story! Is Mr Mitchell going to remain on the broadband board when he is the largest shareholder of the company? This would be a intresting topic to bring up in question time!
To balance up what about a story on Soul and its management one of whom has joined the management of TERRiA.
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