Cellnet Denies Legal Breach
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UPDATE: Cellnet Chief Executive Mark Bloomer has denied its failure to declare the loss of Sony, Apple and Kyocera distribution deals left them in breach of ASIC and ASX regulations. He also said it may be better off without the three vendor partnerships.

In recent months the IT distributor’s  business partnerships with the three manufacturers came to an end, and it has also been widely reported thin client vendor Neoware had formerly been a Cellnet client that also jumped ship.

However, Bloomer yesterday said Cellnet was never a distributor of Neoware products and that this had been incorrectly reported by a number of news sources.

He also indicated he had been in touch with the Australian Stock Exchange (ASX) regarding Cellnet’s reporting responsibilities to shareholders following the loss of the three business relationships.

“I had discussions with the ASX, and they agreed [the loss of Sony, Apple and Kyocera deals] were not material disclosures based on their impact on our results,” Bloomer said.


The determining factor in whether such business changes need to be reported to shareholders is their percentage impact on profitability.

Bloomer indicated the Sony deal only extended to its range of headphones, accounting for under 0.2 percent of Cellnet’s total turnover. He also said it was “on the fringe…we’re not involved much in the AV market so it wasn’t a big focus for us”, and that its good working relationship with Sony continues.

Similarly, he said while its turnover of Apple products was higher, “its impact on profit was quite small”, as was Kyocera’s.

Bloomer referred to Cellnet’s anticipated $1.6 million dollar loss as prompting the business to look closely at the feasibility of a number of its distribution partnerships.


“We just reported a loss, and we’ve got to work out how to turn it around…There are a number of vendors we work with where we do more work than what we’re paid for…We could be better off without them.”

He denied Cellnet had been dumped by Sony, Apple and Kyocera, instead suggesting the business relationships were ended based on mutal agreement.

“If a relationship is not working for one side, normally it’s not working for the other either. It’s always a little bit of both.”

Bloomer also said that while Cellnet was divesting itself of some of its less profitable distribution partnerships, it was also currently in negotiations with a number of new vendors in market sectors more specifically aligned with Cellnet.