Original URL: https://www.theregister.com/2013/06/14/money_laundering_case_dropped_against_qicomm_ceo/
Former QiComm CEO cleared in money-laundering case
Too late to save the business, though
Posted in Legal, 14th June 2013 14:56 GMT
The founder and former owner of telco integrator QiComm has been acquitted of money-laundering charges brought by HMRC - but said this came too late in the day to keep his biz afloat.
Thuraisamy Pathmanabhan, also known as Pat Nabahm, was charged with conspiracy to conceal, disguise, convert, transfer or remove criminal property under the 2002 Proceeds of Crime Act in December 2012.
The charges followed an investigation by HMRC, the Border Agency and the police's East Midlands Special Operations unit. QiComm CFO Frederic Charo and senior sales manager Mayuran Kuhathasan were also arrested and slapped with the same charges.
The case was however dismissed by Southwark Crown Court on 21 May, the listings department confirmed: "There was an application to dismiss [from Nabham] and it was granted."
Subsequently, charges against the others were also dropped.
Nabham told El Chan: "The damage [to my business] had already been done." QiComm went into administration in January and Nabham said he blames the Border Agency for triggering the police probe.
QiComm had four business units: it was a mobile virtual network operator, a carrier, a telecom system integrator and a co-lo service provider.
The carrier business represented some 80 per cent of the £100m plus revenues QiComm generated in fiscal '11, and Nabham said a good whack of this related to sales to retail customers in France, who paid in cash.
He claimed due to French regulations his business was unable to open a bank account in the country into which the money could be banked.
Nabham told us that in September 2011 the Border Agency found QiComm's MD returning from the French biz with wads of money, and this ultimately piqued the interest of the HMRC and the police.
"The Border Agency stopped him and thought this was [a] money laundering [ring]. We tried to explain the situation but they didn't want to know."
The three were arrested on 30 November 2012, severely disrupting the business and generating negative publicity that led to key carrier suppliers withdrawing services. This and mounting costs meant the carrier unit was no longer viable, and it was closed.
Buyers and investors were sought for the remaining operation but no deals could be closed and the company was placed into the hands of administrator Re10 in January.
In a Statement of Affairs (SoA) report filed by Re10 at Companies House, it said analysis of the MVNO division showed it was no longer profitable following the carrier closure, and was sold to Go Network for £5,000.
The SI biz was subsequently sold to the management of that arm led by Iain Brotherston for £280,000. The operation has rebranded as Electra Networks, a company incorporated on Christmas Eve 2012, according to Companies House.
The data centre operated from leasehold premises in London Docklands and the lease was assigned to Hampton Hill Real Estate (HHRE) Ltd, owned by Nabham, in November 2012.
Developing those facilities cost QiComm £7m, the SoA report at Companies House stated.
Nabham told us he had planned to transfer the lease to HHRE from June and it was not connected to the money laundering case. But he was aware that some in the industry were making this link.
He said Re10 had sold the assets of the data centre but an ongoing legal dispute meant he was unable to say more.
According to the SoA, trade creditors including T Systems, Colt Telecom and Mayflex are owned £18.6m and it is unclear what dividend they could expect.
Nabham told us that in total 60 staff were made redundant, along with 36 call centre workers in the Philippines.
The Middlesex-based firm enjoyed a meteoric rise to success. Founded in 2005, it grew to a £103m turnover business by the end of fiscal 2011, up 11 per cent on the previous year.
But it also made an operating loss of £1.4m in fiscal '11.
Re10 was unavailable to comment at the time of going to press, and we are awaiting comment from HMRC. We will update as soon as we hear anything. ®