Changtel liquidator pursuing Microsoft, Fujitsu and others for £50m tab - sources

Begbies Traynor is looking to claw back any payments made to suppliers in lead-up to Changtel being wound up, arguing they are void, sources tell CRN

Microsoft, Fujitsu and Swann are among the vendors being pursued for a collective £50m by the liquidator of Changtel Solutions, CRN has learned.

Changtel, formerly known as Enta Technologies UK Ltd, was liquidated in 2015 following a dispute with HMRC over alleged unpaid VAT. Jason Tsai, whose family once controlled Changtel, was recently banned from being a company director for 13 years.

Changtel's sole creditor is HMRC.

In February 2016, Changtel's liquidator, Begbies Traynor, reached a £1.2m settlement with Entatech, an independent entity which went into administration this week.

But CRN has learned that Begbies is now pursuing some of the other parties that traded with Changtel in the lead up to its liquidation.

Begbies is trying to claw back any payments that were made by Changtel between when it was presented with a winding-up petition on 7 June 2013, and the date of the winding up order, on 28 January 2015, believing them to be void.

According to sources, the largest three debtors are Microsoft, Fujitsu and Swann, which owe in the region of £11m, £6m and £2m, respectively. Mad Catz, a gaming hardware vendor which recently ceased trading, was in the hole for £600,000.

The collective tab stands at over £50m, CRN understands.

Changtel went into liquidation owing HMRC at least £42m, according to a progress report from the liquidator filed last August.

A letter dated August 2016 sent by Begbies to one of the vendors involved, which has been seen by CRN, requests that the sums they received during this period be paid back in full if validation orders were not obtained for them. It is believed that similar letters would have been sent to the other top debtors as well.

Out in the open

This information has only come to light in the wake of the demise of Entatech, which has no ownership or management ties with Changtel/Enta Technologies. Entatech opened its books to a wide variety of potential suitors during an extensive marketing process last month.

Entatech also wrote to its vendors after Begbies made contact with them.

The letter, seen by CRN, stated: "The directors of Entatech have recently learnt that the liquidator has chosen to pursue several other parties who traded with Changtel post winding up petition date, in the same manner as they pursued Entatech."

Entatech was dragged into the saga because it had historical transactions with Changtel itself until the summer of 2014.

The distributor initially contested that the transactions were void, and was preparing a legal case for a retrospective validation order (RVO). However, it decided to drop this in order to avoid a costly legal battle, and reached an early settlement with the liquidator. It still has about £400,000 left to pay.

CRN is aware that at least one vendor has sought legal counsel on the matter, and it is thought many will look to reach a similar settlement, rather than paying in full or seeking to obtain an RVO.

It may prove more difficult for them to pursue the route of a retrospective validation order due to a change in case laws last summer, one onlooker remarked.

Any money recouped by the liquidator will go back into the pot for Changtel's creditors, which will at that stage would include not only HMRC but any vendor that has stumped up, we understand.

Entatech managing director Dave Stevinson would not confirm the information, but did admit the issue had impacted his firm's trading and hampered the sale process.

Both Microsoft and Fujitsu declined to comment. Swann could not be reached for comment as we went to press.