AUCKLAND company Lingo Computer Systems (LCS), owned by Paul Jenkins, has fallen victim to volatility in the local PC assembly market.
The company, along with another firm owned by Jenkins, Nodaan Limited, formerly known as Think IT, entered voluntary liquidation on July 23.
However, while Think IT is continuing under new owners, LCS is no longer operating.
Jenkins in June sold Think IT as a going concern to Andrew Corner and father and son Norman and David Johnston, who also run computer leasing company Mach8 and an accounting firm, Leonard Knight.
At the time Jenkins changed the company’s name to Nodaan Limited, while the new owners took on the Think IT name for a new company they registered under which to run the Think IT business.
Meanwhile, on June 25 Jenkins changed the name of Lingo Computer Systems to Camjen Holdings, which was the company’s original name until May 2001. Last month he entered the company into voluntary liquidation, along with Nodaan Limited, leaving behind a number of creditors, including at least two distributors.
While it appears Nodaan was wound up because the company had been sold, the reasons behind LCS’s demise remain unclear. But sources say the likely cause is the tough conditions in the New Zealand assembly market. Similar factors reportedly led to the downfall of The PC Company last year.
LCS is reported to have been suffering cash flow problems for some time and was said not to be viable without support from its sister company, the former Think IT.
Raymond Burgess, who was appointed by Jenkins as liquidator for the two firms, says the liquidation is the result of the sale of the Think IT business.
“It is usual practice for a company’s name to be changed and then to be wound down after it has been sold. The new owners would insist on the name change to protect the value of the name they bought.”
Burgess says it still too early to say what the outcome of the liquidation will be for creditors as some company assets still had to be sold and debtors had to still settle accounts.
The creditors include two distributors — Express Data and another, which does not want to be named — while Renaissance is listed as a secured party in LCS. But Renaissance says it has not dealt with LCS for some time and is not owed any money.
Paul Plester of Express Data believes like many other New Zealand companies LCS succumbed to “classic cash flow” problems.
“Many do not have the skills they need when it comes to collect debts, and goodwill does not pay the bills,” he says.
Express Data is comfortable to deal with the new owners of Think IT, says Plester.
Attempts to reach Jenkins were unsuccessful before deadline.
Meanwhile, Andrew Corner, the new managing director of Think IT, says the company is faring well and operating profitably.
“We are delighted with the progress. We have undergone a lot of changes since acquiring the company. We have moved to new premises and are taking on more engineering staff,” he says.
Corner says he and fellow directors Andrew Johnston and David Johnston, bought Think IT as it provided the engineering services support for customers of their computer equipment leasing company, Mach8 Leasing.
“The sale of Think IT came up at just the right time,” says Corner.