iBoss administrators called to step aside

The receivers of One Telecom and iBoss have demanded the resignation of the brands' administrators Ferrier Hodgson, for what they claim is a lack of independence arising from a conflict of interest.

"Our client is in the regretful position of having no choice but to request that you resign from your appointment immediately," the receivers' legal representatives told Ferrier Hodgson in a letter sighted by CRN.

They claimed Ferrier Hodgson had failed "the conflict test" for having been both the administrator of iBoss, One Telecom and AsiaPAC, and the liquidator of predecessor entities ispONE and One Mobile.

Ferrier Hodgson sold One Mobile and ispONE's assets to the Conec2 group last year, which continued to operate the iBoss and One Telecom brands. The new subsidiaries also ran into trouble following the handover and were placed under administration this month, with Ferrier Hodgson again appointed.

The receivers said the conflict of interest hinged on existing debt still owing from the September sale, which meant Ferrier Hodgson was currently acting as both the liquidator of the company owed money, as well as the administrator of the company owing the money.

"In respect of the sale of assets you were the vendor, and are now the administrators of the purchaser," the receivers said in the letter.

"In the circumstances, it simply will not be possible for you to discharge your statutory obligations in investigating the affairs of [iBoss, One Telecom and AsiaPAC], which will include an investigation of the validity of the sale of assets."

A spokesperson from Ferrier Hodgson told CRN the company did not believe a conflict existed.

"They have previously disclosed their role with ispONE to all creditors in the first report to creditors document dated 5th May, 2014."

The law firm representing the receivers, Clamenz Evans Ellis, declined to comment on the letter.

The secured creditors of iBoss and One Telecom appointed PKF Lawler as receivers on May 12, resulting in the termination of supply arrangements with Telstra and disconnection of customers.

The letter from PKF Lawler's solicitors claimed other unsecured creditors shared the receivers' view, with alternative administrators having been briefed in expectation of a hand over.

"Whilst our clients wish to avoid the need to seek an order for your removal, we note that the court may remove an administrator pursuant to section 449B of the Corporations Act 2001," the letter stated.