Table of contents
Impact of One.tel collapse
Legal proceedings against One.tel’s directors
Things can be learnt from One.tel’s failure
Lack of proper corporate governance can be a disaster for campanies. In recent years, major Australian companies such as HIH, One.tel and Harris Scarfe failed under dramatic and high profile circumstances. As a result, executive and non executive directors from each of these companies have spent time in jail. They were vastly different companies, operating in different industries, and failed for very different reasons. However, there was one common link between them. All had poor corporate governance. In this paper, I would like to take the One.tel collapse as one example and analyse how it went collapse through its poor corporate governance.
One.Tel was was established by Jodee Rich and Brad Keeling in1995.
Its business grew rapidly and expanded into Europe and the USA. One.Tel had 2.4 million customers world-wide including 500,000 in the United Kingdom. One.Tel came to do business reselling Optus Mobile Phone Services, reselling Telstra Local and Long Distance International Calls, reselling Telstra internet services, selling pre-paid phone cards for long distance calls, and set about but did not complete constructing a mobile phone network of its own. A huge expansion of activities and liabilities was involved in constructing the network, including contracts committing expenditure of more than $1.1 billion with lucent Technologies. The Group associated with One.Tel employed 3000 workers throughout the world and had many subsidiaries. In 1999 News Ltd and Publishing and Broadcasting Ltd made investment around $1 billion in One.Tel
Impact of One.tel’s collapse
The collapse of One.Tell was the 4th biggest corporate collapse in Australia.
One.Tel was placed in administration and
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