The PC assembly and IT distribution arm of Elite Industries is in administration, citing ongoing problems with faulty components as the main reason for its troubles.
Elite Industries Group, the part of Elite that manufacturers and distributes computer products, has been placed in the hands of administrator Armstrong Wily & Co.
Elite Technology Group, another arm of the company which sells monitoring and surveillance system products is continuing to trade.
A spokesperson at Elite, claimed it was expected that Armstrong & Wily would restructure the company over the next 28 days. Speaking to CRN, Robin Lu, managing director at Elite Industries, said the company was hopeful of a "positive resolution".
"We want to find a resolution and still survive," he said. The company had been hit hard over the past two years by the failure of Fujitsu hard drive and some motherboard products which Lu declined to name. The cost associated with replacing faulty products and warranties had hurt the business, he said.
He estimated that over the past one and a half years, faulty products cost the company around $2 million. "We need to be competitive with other dealers -- for example if a Fujitsu hard drive fails, we have to have another hard drive which is a cost for ourselves," he said.
Due to problems with faulty drives, Elite is one of a group of companies investigating a class action suit against Fujitsu.
A second creditor's meeting was scheduled over the next few weeks. Lu said there were between 30 and 50 creditors.
A spokesperson for Elite Technology Group said the company was a creditor of Elite Industries. "We don't have a huge exposure to them," he said. "Because we also have our own independent buying arrangements with suppliers as well."
The company has its own ABN number and bank account and will have its own premises in Brisbane soon, he said.