CUSTOMER SERVICE? - The Computer Shop

Time Computers which is owned by Burnley-based Granville Technology Group, has closed its 80 retail stores, which trade as The Computer Shop, because they can no longer process card payments. A spokesman for Time said, "We have a problem with card processing and we're talking to the bank about it. It shouldn't take more than a few days to sort out." News is that they've defaulted on their loan with HSBC and as a result the bank has withdrawn facilities to process card payments.

They also have a waiting list for HP laptops that customers have ordered, and although customers have paid, HP are refusing to supply them to Time because it believes that they cannot afford to pay for them. It was later announced that the company had gone into administration with a loss of 1,500 jobs. Customers were initially told that the stores had shut for stocktaking but with losses of up to £2m a month the company could not continue trading.

The company had not filed any accounts since June 2003 when it recorded a £2.5m profit and sales of £207m. GMB Union official Graham Coxon, said he wanted the Department of Trade and Industry to investigate the company's collapse and the role played by its directors. However, the company's website business is continuing to take orders, so customers take note - remember what happened with Coldseal

Customers will have their warranties honoured. Clydesdale Financial Services, which offered "buy now, pay later" loans for people to buy computers or plasma screen TVs, confirmed they would not be activated if customers did not get their goods. A spokesman said, "We will mend any broken computers."

Granville Technology Group can be contacted on: 0870 830 3288
or email: enquiries-time@gtuk.com

Local MPs, both Labour and Conservative, have insisted “something must be done” about the collapse of Granville Technology Group Ltd. Kitty Ussher, Labour MP for Burnley, has called on the DTI to investigate the company’s collapse, paying particular attention to management’s actions in the run-up to the collapse. Nigel Evans, the Tory MP for Ribble Valley, also called for an inquiry, demanding to know “which members of the board knew that the company was in dire straits, and when they knew.” Evans also wanted to know “what steps were taken to try and seek assistance from either the Department of Trade and Industry or other Government agencies prior to the announcement being made”. As well as expressing concern for axed workers, Evans also voiced worries about the effect on other local firms.

The jobs of the remaining 165 employees at Granville Technology have been secured for the time being after administrators Grant Thornton won a case in the Court of Appeal. The application was made by Grant Thornton adminstrators to reverse the judgement of the Krasner vz McMath case, which found that protective awards and payments in lieu of notice received 'super priority' under the Insolvency Act. As a result, such liabilities would rank ahead of all other payments in an administration, including not only the administrator's expenses, but the claims of preferential creditors (including other employee claims).

In turn, the effect of Krasner made it more likely that administrators would 'play it safe' and terminate employment contracts within the first 14 days of the administration. But Mr Justice Etherton decided to reverse the Krasner decision. Grant Thornton's lawyers, Lovells, said that the judge's decision restored the position as understood before Krasner, and ensured that the 'rescue culture' was not frustrated by these employment liabilities attracting 'super priority'.

The complex business set up of Granville Technology Group means administrators Grant Thornton is still unclear who actually owned the Tiny and Time brand. It is also not clear what legal links Granville has with businesses such as VMT, the company that manufactured the computers for the Group. This has lead to unsubstantiated reports that VMT is not affected by GTG’s collapse and will continue to produce plasma and flat screen TVs as well as notebooks and PCs. Simon Rothschild from Grant Thornton UK said, "It's too early to say but there's no real likelihood for unsecured creditors getting a refund."

The only ray of hope for some Time and Tiny customers concerns anti virus software. Granville had a licence agreement with Kaspersky Labs which enabled it to pre-install Kaspersky Anti-Virus and Kaspersky Anti-Hacker with a one-year licence. Kaspersky said it will honour valid licences from GTG's customers, despite being owed money by the computer manufacturer.

Any customers wanting to contact Kaspersky Lab can call 0870 011 3461
or email info@kasperskylab.co.uk

Administrators are trying to work out what happened to as much as £8m worth of assets at the Granville Technology Group. In a letter to creditors, Grant Thornton says the investigation is centering on the brothers behind the firm, Tahir Mohsan and Tariq Mohammed, the transfer of assets to offshore companies, and missing hardware stock. Apparently, Burnley-based Granville transferred around £3.3m worth of stock to a France-based start up.

The shares were put in an "offshore vehicle" totally unconnected with the parent company. In addition to the transferred assets, around £4m worth of PCs and other stock is missing. Grant Thornton said, "We have no records of the shop stock, so any number here is going to be a shot in the dark." Administrators have also been unable to recover minutes from board meetings, and say management accounts have not been prepared for more than 12 months.

At the time of the company's collapse, Granville said it was owed in the region of £11.2m but now says this is probably overstated. Grant Thornton is considering legal action against the directors of the firm. (Source: Channel Register)