Mitsubishi Electric Europe has issued a writ against Principal, claiming the distributor failed to pay a bill for nearly a quarter of a million pounds.
Principal was issued with the writ on 19 May, which revealed the distributor owes #240,479.03 plus #1,983.59 interest to the vendor's monitor division.
Rod McMillan, chairman at Principal, confirmed the distributor had to respond to Mitsubishi's legal action by 4 August. But he said: 'The case is not as simple as an unpaid bill - this is a story of corrupt commercial behaviour of a spectacular type.'
According to McMillan, Principal had extended the deadline for its response to the action three or four times: 'We do owe money, I have never been unhappy about that, but Mitsubishi had tried to sue before it was due.'
The distributor is also facing fines of up to #1,000 from Companies House if it fails to file accounts for the year ended 31 May 1997 by 4 October. Commenting on the failure of Principal to file its accounts, one industry source said: 'Compared with bad news and a bad image, a #1,000 fine is immaterial to a company.'
However, McMillan countered that he had been discussing with Companies House the possibility of filing May 1997 and 1998 accounts simultaneously.
'Companies House was happy with that,' he said.
The company's legal problems have added to its troubles, which include being dropped by Mitsubishi in April and the appointment of Computer 2000 in May.
McMillan refused to elaborate on the reasons for the termination of the distribution agreement at this time. An industry source said: 'It is almost as if Principal does not care what has happened.'
He added: 'I do not think that Principal is short of cash - maybe it has a few tricks up its sleeve.'
Mitsubishi was unavailable for comment.
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