SD&C puts Display in recovery position

Troubled UK financial software supplier Display IT has been given a stay of execution despite a winding-up order from its main creditor.

Last week, Software Design & Construction (SD&C), Display IT?s main creditor and designer of the software it sells, issued a winding up petition against the supplier to recoup its losses.

But at a hearing held at the end of last week, Display IT was given a breathing space when SD&C agreed to ask for an adjournment to give the software firm time to organise a rescue package.

The reprieve comes one week after a creditors meeting was held to discuss the resignation of Display IT?s auditor, Deloitte & Touche.

This is the latest in a long line of scandals to rock the company, including the suspension on 17 July of trading in its shares on the unregulated Ofex Exchange, and the resignation of its public relations company, College Hill, after Display IT refused to reveal details of its relationship with Alsina, a Luxembourg-based company that made significant contributions to its income.

Peter Levin, Display IT founder and former chief executive of the company, and its other directors have since left the firm. Levin was understood to have attended the creditors meeting.

Two weeks ago, the DTI launched a preliminary inquiry into Display IT to discover the facts behind the collapse in the software firm?s share price and its failure to produce evidence of its dealings with Alsina (PC Dealer, 3 September).

In a statement, Display IT admitted it had made a false statement about a #5.7 million contract with Alsina for which it was unlikely to receive payment.

The investigation will decide whether a full-blown in-quest into Display IT?s business practices is necessary.

On 1 August, the DTI?s chief examiner of investigations and enforcement wrote to Levin demanding to see documents under section 447 of the 1985 Companies Act, which concerns market manipulation of a company?s share price.

In a further development, two shareholders, H Hanif and David Ward, have stepped in as directors of Display IT to replace Levin. Ward told the shareholders present at last week?s meeting that half of the 66.3 per cent of shares owned by Levin would be sold to refinance the company.