Mainline defended its dealings with Geko Direct in the months before the Orange b2b dealer’s demise.
The distributor claims it invested a ‘significant six-figure’ sum into Geko’s business over the past two years but said Geko Direct had failed to fulfill its side of the deal by raising further funds.
Mainline’s statement was issued as angry former employees claimed this week that Mainline had withheld revenues from Geko.
One source claimed: ‘In all fairness, this is not all down to Geko. Since Orange/Mainline changed the revenue structure in July last year, it caused a lack of cashflow. Mainline have now decided to withhold this revenue share worth in excess of £100,000 per month. No business can survive when its main income is withheld in this manner.’
Some customers criticised Orange’s role as Geko’s b2b partner. One said: ‘So angry! Orange must do something!'
However Mainline said in a statement issued today that it had given Geko Direct six months to come up with additional funds and had held eleventh hour talks with Geko to try and prevent it failing.
Mainline has also offered to pass on Geko staff CVs to other Mainline dealers.
Mainline MD Andrew Boden (pictured), said: 'Geko's position is a reflection of the difficult economic circumstances in which we all have to operate.
‘Mainline has made significant six-figure levels of support available to the business over the past two years. Part of that commercial arrangement was that additional funds for Geko would be raised by the owner, but this investment has not been forthcoming.
‘We have waited for over six months for this situation to be rectified and have been discussing possible ways forward with the owner as recently as this week.
'In the light of the failure of Geko, Mainline has established a freephone customer service line to assist Geko’s customers with any of their account management requirements including pending upgrades, cashback claims and technical queries.
It’s obviously a sad day for the staff of Geko, many of whom have been with the company from the start over 10 years ago. We have invited any Geko employee who wants to stay in the mobile industry to send their CV to firstname.lastname@example.org. We will pass on their details to dealers who may be interested in taking them on.’