INFOTECH: Call Centre Specialist On Hold
Recent Western Cape Business News
AN ambitious plan to build a Cape-based call centre technology specialist appears to have fallen by the wayside, leaving thousands of shareholders either fuming at developments or desperately hoping the venture can be resuscitated.
Milnerton-based Global Call Centre Solutions (GCCS) kicked off operations in earnest around two years go, hoping to cash in on the perceived swing towards Voice over Internet Protocol (VoIP) on a Voice and Data Convergence platform. The company also offered other associated services like e-commerce, virtual private networks, call centre solutions, business processing outsourcing solutions and IP PBX.
It is believed that investors – mostly from Cape Town – pumped up to R20 million into the venture.
Central to this is a disputed agreement with Blue Platinum Investments, which was allegedly given a mandate to sell GCCS shares at an exorbitant commission of 60%. Essentially the bulk of capital raised from shareholders to fund GCCS’ operations actually went to the share peddlers.
On paper GCCS appeared to have cottoned onto a viable scheme – effectively offering to save corporates millions of rand in telephony costs.
The brains behind the GCCS initiative was Roland Buhler, who came to prominence in Cape business circles in the late nineties when he fronted failed snack foods group Pirate Snacks.
Pirate Snacks, which also plied the public for funding, went unceremoniously down the tubes with shareholders losing their entire investments.
Like Pirate Snacks it seems GCCS could sink without a trace as well – although CBN is in possession of minutes from a shareholders’ meeting that suggests irate investors are quite insistent on determining what exactly went down (so to speak) at the company.
In attempting to gauge the situation at GCCS, CBN was only able find an annual report to end February 2007. This report makes for dismal reading with GCCS – during that period – generating sales of roughly R180 000.
Despite such a minuscule turnover GCCS somehow conspired to incur costs of almost R5 million, which naturally put the fledgling company deep into the red.
In commentary accompanying the results directors noted: “In some areas the company has not reached its anticipated forecasts for the current year as set out in the prospectus as a result of the slow change in the local telecommunication sector and the delay of the anticipated second fixed-line operator entering the market.”
At this point GCCS – based on its shares in issue and shares placed with public investors at 25c/share - was worth almost R40 million.
The balance sheet, however, showed the group to be worth closer to R3 million. That valuation included R5 million that was raised from investors in a shares-for-cash issue in 2006.
It would seem that between March 2007 and mid-2008 things simply fizzled out at GCCS.
Minutes from a meeting held at the NG Kerk at Melkbostrand in late July suggest that founder Buhler had been ejected from the business by concerned shareholders led by company executive Ronnie de Kock.
De Kock chaired the meeting – although the minutes show that Buhler was also present.
The meeting opened with an admission that GCCS was “in financial difficulty and currently without any capital.”
More specifically, the minutes suggest GCCS had no funds in banking accounts, creditors of around R1.3 million, a debt to SARS of R1.2 million and owed staff salaries of R600 000.
Worst still for a telecoms company, the minutes noted that “currently all communications have been suspended by Telkom.”
And the woes don’t end there. Property group Growthpoint was closing the group’s Cape Town office and the Johannesburg office had been shut by the landlord.
There is an admission in the minutes that GCCS is insolvent, but there were still questions from shareholders around whether the company could be revived under new management.
Other questions raised by clearly irate shareholders revolved mainly around how and where shareholder’s funds were spent by management.
Another key issue raised by shareholders was why no-one was notified that the company was insolvent or in trouble.
There was also an admission that GCCS had scant assets – save for its staff (who have clearly not been paid for months). This really means there is no realistic prospect of shareholders recouping some of their investment funds.
In the minutes De Kock points out that the GCCS directors have been living off shareholders funds and not generating income.
While the minutes reflect considerable shareholder anger and dismay – including a suggestion to press criminal charges against the GCCS directors – there is also a desperate hope that the venture can somehow be revived.
According to directors, it would take around R4.5 million to revive GCCS.
At the shareholders’ meeting Buhler committed to personally raising funds to “get GCCS back on its feet again.”
There was even a suggestion that each shareholder put R2 500 into GCCS in a bid to rescue the company. But this probably can’t happen until shareholders are presented with audited financial accounts to end February 2008, which will show how the initial funding was spent.
It would not surprise CBN if GCCS shareholders are reluctant to commit further funds once they have scanned the audited financial statements…
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