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British Government Shuts Down Almost-Free Internet PC Firm

The office of the Official Receiver has announced that Smartalk, a firm that traded on the Internet and offered PCs with a £100 price tag, provided users supplied marketing information on a monthly basis.

The receiver's office said that a petition by the Secretary of State for Trade and Industry was presented following an investigation carried out by the Department's Companies Investigation Branch (CIB) under section 447 of the Companies Act of 1985.

Following the petition, a court appointed the Official Receiver as provisional liquidator of the company last month, aiming to "protect and preserve the assets and financial records of the company until the hearing of the petition."

The Official Receiver said that the 7,000-plus potential purchasers who have paid for, but did not receive, their computers, generated in excess of 650,000 pounds ($1 million) in revenue for the company.

In a press statement, the receiver's office said that the principal grounds for the petition was that its business was unsound in that in a short space of time the company had attracted thousands of customers, despite the fact that each PC would have cost the firm more than five times the 100 pounds asking price.

"The company purported to be viable by claiming it could exploit the information on the questionnaire and that it could sell advertising links on its Web site," said the receiver in his statement.

"However, it had received no income from those sources and had no realistic prospect of receiving any significant amounts in future," added the statement.

The Official Receiver said it had concluded that it would be "absolutely impossible" for the company to fund the purchase of PCs to the majority of the customers who had paid.

Added to this, the receiver said firm was also grossly under-capitalized, and had no access to any sort of funding, being totally reliant on income from new customers. This, the receiver's office said, meant that the company was insolvent and unable to pay its debts.

Newsbytes notes that Smartalk was incorporated in England as a private limited company on Jan. 21, 1999. Its registered office is at Lifestyle House, PO Box 200, Marathon Place, Moss Side Industrial Estate, Leyland, Preston, PR5 3QN.

Its directors have been Julia Anne Rae and Johnson Williamson, who also acted as the company secretary.

The Official Receiver's Web site is at www.insolvency.gov.uk. Reported by Newsbytes, www.newsbytes.com.

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