Bill Express

The Age continues excellent coverage of the investigation into Bill Express today thanks to Mark Hawthorne’s work.  In addition to the Supreme Court investigation yesterday which shed light on cash leakage from the business in early 2008, Newton Chan pleaded guilty in the Magistrates Court to manipulating the share price.

What a mess.

Newsagents and others connected in the channel who questioned the structure and operation of Bill Express from late 2005, two years after the business started, were put down by the ANF.  Despite evidence requiring investigation, the ANF remained steadfast in their support of Bill Express because of a deal signed in 2003.

Even though the deal between the ANF and Bill Express was only a heads of agreement (and based on no due diligence by the ANF), the Directors of the day chose to not challenge Bill Express out of fear of legal action by the company.  This kept newsagents in the dark.  The most concerning period for this was 2007 through 2008.

Had the ANF listened to concerns raised by its members and acted, newsagents could have saved millions of dollars and the Bill Express mess could have been exposed a year earlier.  But that’s all water under the bridge.  I mention it today as a reminder that associations and business do not mix.

Mark Hawthorne’s Twitter live feed from the Supreme Court this morning is fascinating.  Check out his latest tweet:

supreme court just heard #billexpress paid TBS $600k a month, and $7m in last month. Court told this was ‘stripping of money’

Mark Hawthorne from The Age will be tweeting live from the Supreme Court today where public examination is underway of key players in the collapse of Bill Express. Follow Mark on Twitter at CollinsSpencer.  It is unusual to have a live news feed, via Twitter, from the Supreme Court.

Newsagents should follow Mark’s tweets and stay across this fascinating story which caused tremendous disruption and cost to our channel.

In other Bill Express news this week:

• Julian Little, former Director of Bill Express and point person between Bill Express and the ANF is working in Dubai on, yep, a bill payment project. Mark Hawthorne at The Age reported earlier this week that the liquidator will seek an arrest warrant for Julian Little if he refuses to leave Dubai and appear at the public hearing.
• Yesterday, questioning in the Supreme Court surrounded cash transfers to Australian Private Networks (APN).  In June 2008 I noted that APN was then 95.5% owned by Telecards Asia and that Telecards Asia was owned by Sandro DiDonato – a many closely associations with plenty of businesses in the Bill express universe.  The Age has more on the APN questions.

While newsagents really only want to know if they will be pursued for the equipment leases and what they can do with the old Bill Express equipment, the extraordinary public examination currently under way will shed some light on what went wrong and offer a reminder why industry associations are better off not getting involved in commercial activities.

The ANF led newsagents into Bill Express, strongly recommending they take it on.  The ANF had not undertaken any due diligence.  When the business went south in 2008, the ANF let newsagents down with no advice followed by poor advice before finally offering the right advice.

Mark Hawthorne reports in The Age today that former directors of Bill Express delivered documents to the Federal Court in Melbourne yesterday as required by a court order obtained by the liquidator.  Eleven days of public examination are scheduled to start in March.

It is a pity that newsagents were not being given the same opportunity of transparency around the arrangements which led to so many to lose so much on Bill Express.

Some newsagents have recently received letters from a firm called Professional Collection Services (PCS) demanding money in relation to Bill Express.  The Bill Express liquidator has engaged PCS to collect Bill Express debts relating to telecommunication services incurred prior to Bill Express ceasing operations. Unfortunately the letters of demand to not specify what the debt relates to or any other relevant details.  I’m told that the legal advice for anyone who receives such a letter if to immediately write back and seek details of the claim in writing so that this can be verified.  The contact details are: PCS, PO Box 85, Collins Street West, VIC 8007.  Email: vicadmin@profcoll.com.au.  This is not something to ignore.

ASIC has laid charges in relation to alleged market manipulation relating to Bill Express.

Mr Newton Chan of Balwyn, Victoria, has been charged with eight counts of market manipulation following an investigation by ASIC.

The charges relate to Mr Chan’s alleged manipulation of the share price of Bill Express Ltd (BXP) (now in administration) while he was a senior client adviser at Macquarie Equities Ltd.

ASIC alleges that between 3 May 2006 and 26 March 2008, Mr Chan used a number of trading accounts held by various individuals and entities with Macquarie Equities Ltd to purchase more than 34 million BXP shares, worth over $6.1 million through hundreds of transactions. ASIC alleges these transactions created, or were likely to create, an artificial price for BXP.

Mr Chan has also been charged with falsifying order records by entering false names in Macquarie Equities’ electronic ordering system during this period and with providing false or misleading information to ASIC during an examination.

Mr Chan appeared in the Melbourne Magistrates Court today. The matter is next listed for committal mention on 12 March 2010 in the Melbourne Magistrates Court.

The question if the charges are proven will be – who was Newton Chan acting for?

Bill Express is a story whichh will not go away.  Newsagents are reminded every day when they stumble across useless equipment in their back room.  They will also be reminded if they read the list of services the ANF Chairman offers from his newsagency according to the ANF yearbook (page 83) just published by the ANF – yep, Bill Express.

If any newsagent has received any payment following and as a result of the recent ACCC case in the Federal Court I’d be interested in knowing.  I will pass the information on to Hank Spier who has been working on behalf of newsagents on the Bill Express matter since before the company collapsed.

The Age today has a wrap up by Mark Hawthorne of last week’s Bill Express announcement.  The Age led on the Bill Express last year thanks to Mark and his team.  It is good to see them continue their coverage.

Justice Gordon today handed down a decision in the federal Court declaring that Bill Express contravened the Trade Practices Act by engaging in exclusive dealing and misleading and deceptive conduct. Action was brought by the ACCC on this matter.  Click here for a copy of the ACCC press release on the matter.

The decision relives newsagents from making further payments on their Bill Express equipment.

Curiously, the ANF is yet to make peace with newsagents about Bill Express.  The AN Board in 2003 endorsed Bill Express and robustly promoted Bill Express – without any due diligence on behalf of newsagents.  Last year, while NANA, the QNF and this blog told newsagents to stop paying their equipment rental, the ANF told newsagents to pay.  They then reversed this advice.  I mention this because the ANF is likely to try and trade off the goodwill from this Federal Court decision.  Newsagents need to remember who got them into this and who misinformed them for so long through the mess.

Newsagents ought to thank NANA and the QNF for their tireless work on this, work done using their own funds.  Their efforts brought the matter to the attention of the ACCC.  The ANF deserves no credit whatsoever.

I have received the following update from parties familiar with the court case relating to Bill Express:

The ACCC case was heard in the Federal Court in Melbourne last week,The only real respondent left standing is Bank of New York. The other respondents, Bill Express, TBI and Mobius are all in liquidation.

The Judge reserved her decision. The decision is expected within 6 weeks,

Once the decision has been handed down we will update the group and report on any consequences for the group ,and newsagents generally, of the decision.

NANA and the QNF led on the Bill Express issue while the ANF provided contradictory advice to newsagents which, if followed, meant some newsagents paid equipment leases longer than those who followed the NANA and QNF legal advice.

The matter of ACCC v Bill Express & Ors has been set down for a trial before Justice Finkelstein commencing on 10 August 2009. A pre-trial conference has been listed for 11.30 a.m. on 22 July 2009.

Australian Pure Fruits is pursuing a newsagent who took on a drinks fridge as part of their Bill Express arrangements.  I would be interested to hear from other newsagents being similarly pursued about the fridge.

Australian Pure Fruits is the company which originally floated Bill Express on the ASX.  They claim to have purchased the fridges from Capital Finance.   Capital provided lease finance to OnQ, the company through which the fridges were supplied to newsagents as part of Bill Express arrangements.  Yes, it all sounds very messy.

I’d want to see proof that they purchased rights associated with the fridge as well as the lease over the fridge before I agree to anything.  The rights were part of a relationship with Bill Express and OnQ and I am not aware of any rights in relation to those businesses being sold or transferred.

The Australian Pure Fruits correspondence I have seen aims to ensure that 80% of compliant product is displayed – that is, products supplied by Australian Pure Fruits.

The second Scheduling Conference in the matter of ACCC v Bill Express & others was held yesterday before Justice Finkelstein.

The ACCC successfully sought a preliminary trial to determine the issue of liability for the third line forcing and misleading and deceptive conduct elements of the case, with the issue of BNY’s involvement to be determined at a later date.

The preliminary trial will commence on 13 July 2009.

Hank Spier, legal counsel for the NANA initiated Class Action on Bill Express, has provided the following update on the action brought against the company by the ACCC.

There is a scheduling meeting in the Federal Court in Melbourne on 12 March. That will set the date for the trial.

Mobius and Bank of New York Trust have undertaken not to pursue any payments from newsagents until the Court action is over.

Check out this photo from a newsagency in New South Wales.  The Bill Express screen is still up and turned on and running an ad for the dead BOPO prepaid Visa card.  No wonder we are considered a has-been retail channel by some suppliers.

If you have a Bill Express screen take it down or play other content.  Do not advertise BOPO because that makes you and all who share your shingle look bad.

We really are our own worst enemy sometimes.

I missed that The Australian published an update on the On Q / Bill Express mess January 16.  The report catalogues what we knew – bad business practices, dodgey loans and lame excuses.

It surprises me that in the collapse and subsequent winding up of Bill Express and OnQ that newsagents have received no communication regarding the equipment sitting in boxes in the back of newsagencies.  I have asked several interested partiesand no one has an answer.

OnQ was placed into voluntary liquidation on December 23, 2008 by resolution of the company’s creditors.  It remains unclear what impact, if any, this will have on the Bill Express equipment which sits in the back rooms of thousands of newsagencies around the coountry. 

On Q is the company which committed to paying rebates to newsagents for the Bill Express / DialTime equipment and services. The rebates were the reason many newsagents signed with Bill Express.

OnQ oine of the Bill Express related companies which would have been part of the ANF due diligence process in the lead up to their endorsement and promotion of Bill Express to newsagents.  The ANF did not conduct any due diligence.

Worrells, the Administrator for OnQ, has recommended that the company be wound up.  This was to be put to a vote of creditors today.  OnQ is interesting to newsagents because of its shareholding in Bill Express and its connection with hardware supplied to newsagents as part of Bill Express through Technology Business International, another OnQ company.  Click here for a copy of the report to creditors provided in advance of today’s meeting.  It sheds some light on the Bill Express / OnQ mess.