By Stuart Wilson
Empa’s ongoing legal action against the runaway resellers at the heart of the Dubai-based channel credit crisis has resulted in the distribution house securing a six-figure dollar payment from Fortex-MID covering part of the outstanding debt.
Distributor Empa’s ongoing legal action against the runaway resellers at the heart of the Dubai-based channel credit crisis has resulted in the distribution house securing a six-figure dollar payment from Fortex-MID covering a small but significant part of the outstanding debt.
Savas Yucedag, VP at Empa, explained: “We started legal action back in April and took out the court order against the assets that Fortex-MID had in Dubai. As a result of this court order, we convinced the company owner to pay an amount to us now to give him some extra time to arrange for a full and final settlement.”
Besides Fortex-MID, Empa is also taking legal steps to recover outstanding debts from the other two runaway resellers at the centre of the recent credit crisis: MST and Micron. Yucedag is confident that the company’s legal action will result in Empa receiving significant payments from all the runaway resellers — even if it takes years to reach this goal.
“We are doing exactly the same with these resellers,” added Yucedag. “Hopefully we will be getting results in a month or two and if they cooperate and they pay part of the amount we will be able to give them some extra time. If not we will transfer the court orders to the countries where that are currently living and at the same time apply to Interpol to make sure that they cannot travel.”
Empa is currently in regular communication with the company owner of Fortex-MID and also has intermittent contact with Micron’s boss. To date, Empa has been unable to track down the company owner of MST. Empa’s decision to pursue legal action against the runaway resellers is designed to send a clear message to the channel.
“We don’t want to give the message to the channel that you can cheat Empa and forget about it,” said Yucedag. “If any company has any intention to play about with us they should understand and realise that they will end up in jail sooner or later.”
“We want the entire channel to know that if they are working with Empa, they need to have a clean business. Taking legal action is our right. We are not going to say, ‘Fine, pay whenever you want,’ or write off debts. We use all the tools at our disposal to recover the outstanding amounts from resellers that default,” he added.
The levels of confidence and trust between distributors and resellers in the Dubai-based channel remain low at present and it is taking time for credit lines to be rebuilt. Nevertheless, Yucedag remains optimistic regarding the future prospects for recovery and growth.
“We have defined the third quarter as a recovery quarter where we will recover the business that was missed in the second quarter,” he said. “I am still confident for the future of the channel in the Middle East and we are currently talking to some new vendors as well although nothing has been finalised yet.”