Schneider Electric chases DPSA for missing millions

Schneider Electric is chasing a near $7 million debt from former distributor DPSA, which declared insolvency after losing a court case between the two.

DPSA was ordered to pay back an outstanding debt of $5.4 million to Schneider following a dispute over a deal to supply servers to Canberra Data Centres in 2015. Schneider claims DPSA's debt has climbed to $6.9 million.

DPSA declared insolvency the day after the court order was handed down on 30 March, and appointed accounting firm O'Brien Palmer as liquidator. DPSA ceased trading between September and November in 2016 after identifying a need to divest from its reliance on Schneider.

According to the minutes from DPSA's creditors meeting on 12 April, Schneider was concerned that the distributor was wound up to avoid paying back its debt, and that the true financial position of the company wasn't disclosed to the liquidator.

Schneider also questioned why DPSA had a net asset deficiency despite reporting revenues between $25 and $30 million in its most recent financial year.

Liquidator Liam Bailey said that the distributor was working on low margins, but acknowledged there were "significant issues" with DPSA's financial history and circumstances that required further investigation.

However, Schneider again raised concerns that O'Brien Palmer would not perform an in-depth investigation into the distributor's affairs because the liquidator was self-appointed by DPSA. After the meeting, Schneider successfully applied to the court to replace O'Brien Palmer with KordaMentha as liquidator for DPSA.

KordaMentha liquidator Rahul Goyal told CRN there was still a lengthy investigation to be conducted.

Schneider's claims account for 95 percent of DPSA's debts, though other debts include $312,000 to another data centre equipment supplier Powerfirm, $17,600 to Datacom and $3000 to Data#3.

In November 2014, DPSA won the right to supply 52 HACS pods to CDC's new Fyshwick data centre for the first stage of construction. By June 2015, DPSA had supplied 12 pods, after which the distributor Schneider stepped in to supply the remaining 40 pods directly.

The dispute came to light in May 2016 when Schneider terminated its relationship with DPSA following the controversy, ending the eight-year partnership.

The decision resulted in a number of staff departures at DPSA and led to chief executive Jacques Tesson launching a new distributor, CertaOne, with Huawei and CenturyLink as vendor partners.

The two firms ended up in court with Schneider claiming it was owed $2.9 million that was allocated to the CDC and $2.4 million from other outstanding debts. DPSA claimed it was owed $3.5 million in missing revenue from the 40 remaining HACS pods, and $2.4 million from the loss of work on CDC's Hume data centre.

Schneider and DPSA were both contacted for comment.