Colt Technology UK nixes winding-up order threat from Italian VoIP reseller over £3.8m disputed debt Colt Technology UK has won a High Court injunction preventing an Italian company allegedly suspected of being involved in a VAT carousel fraud from issuing a winding-up order over an unpaid – and hotly disputed – £3.8m debt. After Colt's UK auditors PricewaterhouseCoopers (PwC) "raised concerns" over SG Global Group's business …
I hate voice, partly for the reasons explained in this case. Which is quite fascinating reading, especially relying on a ruling made in a Prohibition era involving a ship full of whisky and (allegedly) some mobsters.
I rather like this bit-
although the second of these is unsigned and the third is in draft form only
regarding SGG's contracts with its suppliers. Seems legit.
But having been involved in similar deals, what can happen is an excited sales person lands a 'massive deal' based on the interconnect revenue number, and railroads it through the business. If sales are paid commission based on revenue, you can guess where there focus is.. Plus the sales director because targets.
My job wrt due diligence was technical, ie could the 'partner' deliver services per our SLA to customers, but that can get murky with 'virtual' services like VoIP and resellers/abitrage. In this sort of case, I'd have expected to see SIP trunks between Colt and SGG to assure some sort of QoS.. And in a dispute like this, call traces from Colt's SBCs showing path taken. That would provide some comfort as to who was actually terminating the calls.
But then what can happen is engineering gets overruled by sales because it's a 'commercial' issue, even though those commercials look dodgy AF. Or 001 in the real-world, even if voice packets should be 101. But I digress. Engineering reservations get shouted down as being 'sales prevention', sometimes even after TSHTF and the recommendation to no-bid turns out to have been correct. Which can also mean the sales person's taken their commission & moved on, so prospects of clawing that back are slim to none. I've also been involved in deals where engineering, legal and treasury have recommended no-bidding, but been overruled by sales. Those 'sales driven' companies are FUN, and generally best avoided if you value your sanity.
But such is politics. From the ruling, the margins don't necessarily look bad to me given the VoIP world is a shark infested swamp that can make Florida realtors look honest. It's a low margin/high volume game where voice managers often chop & change suppliers based on rate sheets dangled in front of them.
In Colt's defence though, pre-sales due diligence often isn't that in-depth.. So interesting details like SGG's partner being a laundry worker wouldn't have come to light. But that's Italy.. Certain people there have plenty of experience in the laundering business..
I worked for a foreign company which had a robust compliance procedure. It also had a sales director who absolutely hated confrontation. One day a large-ish UK deal is in the offing. My company is keen to do the deal but there's a small snag. Everything is destined for use in the UK despite the deal being with another foreign firm. But there's this foreign bloke in the UK who is their UK rep. He's the one actually negotiating the deal and he would like a cut. Therefore he suggests that he signs what in reality is a £450k deal for say £500k with us. We then pay him commission on this which will be say 10% or basically the £50k overpayment. He says his employer is aware of this arrangement (which I highly doubted).
Despite it not being my deal I objected that this deal was whilst at the time just about legal it was ethically very unsound. It would also doubtless violate the bribery act if it came into force before the deal was signed. I made damn sure this was down in writing so I didn't end up as a scape goat. Nonetheless I was ignored because it was a good deal and represented a nice profit. Then a problem emerges in the form of one of the products. Despite our best efforts one of the products was not what the foreign customer was expecting. Therefore they were returning the units we'd supplied for test, as specified in the contract they could do. They wanted the cash paid for the eventual production run of those units back please.
I was amused when the sales director had a sudden revalation. He spotted that the if he made a full refund of the 100k for those units we'd be out by the 10k commission. I suggested that he refund the 90k and say to their rep that he owed the extra 10k. I said as his employer knew about the arrangement there shouldn't be a problem. That was popular with everybody except the rep who thought he certainly shouldn't be paying that. He didn't have a choice though. Thankfully the bribery act prevented any repeat of this.
The numbers have been changed and VAT ignored to make things easier to understand.
A large sales commission made a salesperson forge the MD's signature on a contract [which to my knowledge was still under ' mutual negotiation']. Many months later, when on loan to the division for that product, I was still arguing the 'terms of contract' with my opposite number, who inadvertently said, "but you and we have signed a contract". Red lights flashed! (Value in multi millions of Euros). Eventual major enquiry, 'sales had not read detailed technical specs in minute detail including all foreign in-country referenced "boilerplate standard' ' Technical Specs' so all equipment supplied did not comply. We could not service equipment as we had no local employees security checked. (sensitive application). Loss was about 3 times "signed" contract value. Sales has taken commission and left company.
Division I worked for never employed sales on commission. Loss almost took down major EU company.
Anonymous for reasons.
I was once sat next to a senior civil servant on a plane. Cue the usual chit-chat on non-work related matters. I had mentioned an interest in farming so he asked how I would propose to avoid possible food shortages in the run up to Brexit (it was a while ago!)
I joking said "rip up all the golf courses and return them to prime agricultural land". He did not say another word for the next 3 hours!
(Yes, I know its not all prime agricultural land - e.g. links. But it was intended as a joke.)
Golf lubricates far too much business (public and private) in my view.
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