A COMPANY at the centre of a Corruption and Crime Commission investigation is still operating in Western Australia, targeting the small to medium enterprise market.
At the outset of investigations in 2008-09, a Victoria-based group of businesses including Consumable Management Group, Better Image, Mycom, Elite Imaging Australia, Reliance, Premium Office Supplies and Premium Office Express was named for using aggressive and coercive sales techniques to sell over-priced, non-genuine toners to public servants, using “rewards” such as gift vouchers and electronic goods to seal the deal.
“Between 2006 and 2009, at least $620,000 worth of toner was purchased by local and state public authorities from the company. Had the same number of cartridges been purchased from approved suppliers, the cost to government would have been significantly less, around $205,000,” the CCC report stated.
The Pegoli family from Melbourne’s east is behind the group of companies, which have an annual turnover estimated at about $20 million.
Despite the controversy, the Melbourne business remains active in WA, allegedly targeting small to medium businesses, according to industry insiders.
One longstanding industry professional told WA Business News a large financial services firm in Perth had been doing business with the Victorian company, with a junior staff member of the firm who spent $11,500 on toner worth about $2,500 rewarded with electrical goods sent to their private address.
Quality Printer Cartridges director Lisa Rodi said she had regular contact with customers that had dealt with the Victorian companies’ aggressive sales tactics.
The CCC investigation was based on the procurement by public servants of toner cartridges outside of purchase agreements.
The report was tabled in WA parliament last November and referred to the Australian Corruption and Crime Commission, which could not confirm or deny any investigations into the companies.
The Victorian Ombudsman also conducted an investigation into improper procurement within Arts Victoria, several public schools and a prison.
In South Australia, the government investigated cases of improper procurement involving the same group of businesses investigated by the CCC in WA.
Victorian Police were contacted by WA Business News and also could not confirm or deny whether the group of companies was being investigated.
The consumer protection unit in the WA Department of Commerce has not had the companies on its radar because it does not deal with business-to-business interaction.
Three Pegoli family members have registered 23 business names with the Australian Securities and Investment Commission since 1996; among these are Grasshopper Toner, Pace Australia Holdings, Leading Lazer, and Kangan Water.
According to ASIC records, Leo Pegoli has 16 companies registered in his name. He was part of a group that filed an injunction against the ANZ Banking Group’s plans to sell $25 million in seized Opes Prime shares during the stock broking firm’s collapse in 2008. The group failed in its bid to stop the transaction.
Businesses spoken to by WA Business News say the fallout from the CCC inquiry and investigations in Victoria had affected the whole office supplies sector.
Balcatta-based Toner Plus has been operating since the late 1980s and director Eddy Bulich said companies using aggressive sales techniques had added strain to an industry already suffering from significantly reduced margins.
Mr Bulich said the industry had changed with the push towards paperless offices, increased competition from eastern states cartridge suppliers, and pressure from printer manufacturers such as HP and Ricoh.
