Home / eSys hits back at Seagate audit allegations

eSys hits back at Seagate audit allegations

Global components distribution giant eSys has hit back strongly at recent allegations made by Seagate. The hard drive vendor announced today that it was dropping eSys — its largest global distribution partner — claiming eSys had refused to co-operate with an audit of point of sale records.

Global components distribution giant eSys has hit back strongly at recent allegations made by Seagate. The hard drive vendor announced today that it was dropping eSys — its largest global distribution partner — claiming eSys had refused to co-operate with an audit of point of sale records.

eSys has now confirmed that Seagate terminated its global distribution agreement, but has simultaneously launched a vigorous defence of its refusal to meet the specific requirements of Seagate’s audit process.

“eSys strongly refutes any allegations of irregularities in its compliance of the agreements,” read a statement sent from eSys to Channel Middle East. “Over the last six years, eSys has been supportive of Seagate’s and Maxtor’s strategies, even at some cost to itself and its shareholders. Unfortunately, the intrusive nature of the audit would not be justifiable to our worldwide business partners under normal business practices.”

eSys also shed light on the reasons behind the audit dispute. “During the current quarter, Seagate had requested an intrusive audit of eSys’ documents,” read the statement. “eSys has declined access to a wide-ranging series of requests, citing in particular its commitment to the confidentiality of data relating to its customers and other vendors.”

“There have been protracted negotiations starting 2nd October 2006, during which time Seagate has repeatedly refused to provide shipments of their products as required under the agreements. Despite this, and as a sign of good faith, eSys has continued to pay Seagate for invoices raised, bringing down outstandings from US$103m to US$50m, a fact acknowledged by Seagate as well. eSys has a long history of meeting its commercial liabilities in full, and intends to continue this record,” continued the statement.

Singapore-based eSys was previously Seagate’s largest global distribution partner and represented 6% of the vendor's worldwide revenues — equivalent to a massive US$168m — for the quarter ending September 2006.

Despite its dispute with Seagate, eSys remains wholly committed to meeting the needs of its customers. “eSys is committed to continuing its robust growth in the field of technology distribution, and looks forward to an amicable solution to the current issue, which will benefit the channel,” concluded the company statement.

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