Golden Bell hits problems
The Dubai distribution sector has been hit by the downfall of reseller Golden Bell and assembler eMachine. The two companies, both controlled by Hossein Karimi, hit cashflow problems and now look unlikely to pay back credit given to them by distributors.
The Dubai distribution sector has been hit by the downfall of reseller Golden Bell and assembler eMachine. The two companies, both controlled by Hossein Karimi, hit cashflow problems and now look unlikely to pay back credit lines given to them by distributors.
Omiros Pissarides, general manager at Logicom Dubai, said: “We are hearing about some credit issues in the market and these particular companies did have buying relationships with Logicom.”
Estimates of the value of credit owed by Golden Bell and eMachine to distributors vary wildly. Some industry insiders put the figure at up to US$4m with a couple of distributors allegedly liable for amounts up to US$1m.
Some distributors claim to have stopped offering credit to Golden Bell and eMachine some time back. Tech Data claims to have blacklisted the companies seven months ago due to the riskiness of extending credit. Besides Logicom, Empa has also been cited as a distributor with credit exposure to Golden Bell.
“This is a painful process that distribution has to go through,” said Adnan Al-Falah, managing director at Tech Data Middle East. “Those companies that are serious about IT distribution need to put the proper processes in place and stop dealing with the channel players that still have the wrong trading mentality.”
Aptec has also denied any credit exposure to either Golden Bell or eMachine. “We saw problems at an early stage and pulled any credit,” said Mario Veljovic, sales and marketing manager at Aptec Gulf. “Aptec understands that components distribution is an inherently risky area and looks to keep credit lines to a minimum with certain customer types. We have also heard that a large dealer in Abu Dhabi is getting ready to fly.”
Vivek Gupta, finance and operations manager at Emitac Distribution, added: “It was the Golden Bell Group but we were fortunate enough not to do any business with them so there was no credit line. Golden Bell had been faxing distributors looking to reschedule payments and offering 25% of what it owed.”
Calls to eMachine went unanswered and requests to speak to a spokesperson at Golden Bell were ignored. Distribution sources claim that much of Golden Bell’s stock has found its way onto Computer Street at heavily discounted prices. According to authorised distributors, HP LaserJet 1300’s are now available at below cost after Golden Bell dumped its stock to raise some cash.