From "The Australian". If this is to be believed, SOT is...

From "The Australian". If this is to be believed, SOT is finished. Not only are they in dispute with dealers over commissions, they are apparently unable to pay their own staff.

End of the line for Soul Communications


Cath Hart | May 29, 2008

SOUL Communications, known internally by some staff as "Two.Tel", is currently under investigation in four states for failing to pay wages and entitlements to staff.

The revelation, confirmed to The Australian by the Workplace Ombudsman yesterday, comes as the telco faces legal action from dealers claiming they will lose their businesses because Soul owes them more than $1 million in commission fees.

Staff still working for Soul, a subsidiary of SP Telemedia which merged with Australian internet service provider TPG in April, yesterday said the business was in "chaos". It is not related to private equity group TPG.

Phone calls to Soul's NSW offices were diverted to the Perth office, where insiders claimed staff numbers had been whittled from more than 400 to about 50 over the past 12 months.

"No one is working in their job description. We keep turning up but there are lots of people just sitting around waiting for a redundancy offer -- but we've heard rumours they won't offer us one because they can't pay it," one said.

Several former staff, who were joining Centrelink queues yesterday, said they were unsure whether their entitlements would ever be paid and that they were having trouble getting early termination notices -- which are crucial for securing welfare payments.

As the circle of unpaid creditors widened, Soul again refused to respond to questions from The Australian yesterday about whether the company had cash flow problems or if new CEO David Teoh's management regime was suffering from teething problems.

Telco industry insiders described Mr Teoh, who founded TPG in 1986 and is now Soul's executive chairman and major shareholder, as "reclusive" and reluctant to communicate.

"Soul is being run by an accountant who doesn't understand the business," one commented.

The Australian revealed yesterday that at least one Soul dealer had initiated court proceedings to recoup unpaid funds and that several others are also considering legal action.

In response to a query from the Australian Stock Exchange, Soul confirmed it had withheld dealer payments from five dealers saying it had agreements in place with the dealers which "entitle Soul to withold or claw back dealer payments in certain circumstances".

But Michael Karikis from Melbourne-based AMD Telecom, who claims he is owed $300,000 from Soul, said dealers like him were being unfairly penalised by the telco. He said he had been told Soul was withholding payment because customers he had referred to the telco had not paid their bills.

Mr Karikis said this was because the company had connected customers who would have been rejected by other telcos in an effort to expand its customer base.

"Soul approved customers who applied through you who should not have been approved. Other telcos would have refused services to those customers," Mr Karikis said.

"But Soul were in acquisition mode and they wanted to grow so they were putting on everyone and anyone -- but now we're bearing the consequences."

Other customers had failed to pay their bills after being disconnected after waiting up to an hour to speak with Soul's customer care line. "The customers can't get in contact with Soul and they don't pay their bill and they're a bad debt," Mr Karikis said.

Internal company documents obtained by The Australian confirm that Soul received a litany of complaints from customers who waited an hour when they called the customer care line, only to be disconnected.

The document details complaints about non-payment to creditors, poor customer service and dealer support and billing errors, including customers being back-billed almost $1000 for charges dating back six months.