Once a major IT distributor in Asia and Europe with a turnover of almost $3 billion, Singapore-based Esys Distribution has been involved in many controversies since 2006. Involved in a fraud with Karma and CHS in the early 2000s, the company’s distribution agreement with Seagate was terminated in 2007 because of its refusal of an audit of its sales. The hard drive vendor then sued Esys for about $130 million on the charges of non payment of arrears and claiming rebates fraudulently.
A year later, Estate Office Chandigarh, an Indian local government body, found Esys India guilty of unethical practices and changing its shareholding pattern against the rules of allotment of 6 acres of land. The land was resumed by local court, which charged promoters of the company for unethical activities and imposed it a heavy fine (source : Hindustan Times 01/30/2008 and 10/14/2008).
In 2008, Esys closed without notice its Australian subsidiary. This embarrassed local resellers, which were thus unable to cover warranty claims for Chimei monitors they purchased from it (source : Computer Reseller News Australia, 02/26/2009).
More recently, the company is being involved in a major financial mess with Bombay-listed Teledata, according to Indian newspaper Financial Chronicle. As usually, Esys owners refuse to answer to journalist questions, which raises more eyebrows and interest. The newspaper has questioned the authenticity of revenue from Esys Singapore subsidiaries for almost $1 billion, as Esys books have not been audited for the last two years. According to the newspaper, another glaring example of fraud in balance sheet is that Teledata is showing revenue from Esys subsidiaries it does not own.
In EMEA region, the company seems to reorganize for future. esysdistribution.com and esysglobal.com websites are offline since end of 2008. This should not help Esys working. And, indeed, the company has chosen to cover Belgian and French sales from Netherlands. Like its Austrian and Italian offices (which are nowhere to be found on official national company listings), its Polish subsidiary was closed in February, while warranty claims on products sold in the country should be sent to a company named Ezy Infotech in the Netherlands. And, purely by chance and a few weeks later, a Polish Ezy Infotech was established. Ezy and Esys are of course officially totally unrelated, according to Esys Germany manager Mark Coplin who declined to answer further to our questions. Even if Ezy Infotech is the property (among other companies such as Tradelabs, Strategybot or Esys Global in Dubai) of Niraj Goel, the brother of Vikas Goel, founder and owner of Esys Distribution. Even better : in the Netherlands, both companies are located in the same city. And in Singapore, Ezy Infotech is run from the premises owned by Esys Singapore. Future will tell if all this was also purely by chance.
Of course, being unrelated, Ezy Infotech should be untouched by Esys frauds. But interestingly enough, Indian Foreign Investment Promotion Board (FIPB) has rejected application of Ezy Infotech for a major investment on the charges that promoters of company are of doubtful credentials and that there are major allegations of frauds against them (source : FIPB).
Edit : follow-up about relations between Seagate, Esys and Ezy here.