Chinese smartphone Company Oppo whose Australian operation is riddled with losses, debt, and tens of millions of dollars in loans, has reported a 23% fall in revenues as of June 30th, 2022, with one of their Companies OMC Electronics Pty Ltd declaring $8.2M in losses and another linked business that sells smartphones a $10.2M loss with questions being raised as to whether they have a future in Australia.
Both businesses have common directors including the OPPO ANZ Group Chief Executive Officer and the Director of Global Marketing and Brand Strategy at OPPO.
OMC Electronics has over overall $98M in liabilities with questions being raised by auditors as to whether they can continue as a ‘Going Concern’.
According to filings lodged with the Australian Securities and Investment Commission OMC Electronics claims that sales of their smartphones fell from $165.9 million in 2021 to $127.8 million in 2022 a fall of approximately 24%.
Current 2022 liabilities of the OMC Electronics business are listed at $66.67 million Vs $46.13 million in 2021.
OMC Electronics also has extensive borrowings, back in 2021 the Company listed borrowings from Singapore Company Long Shining Development Ltd of $13.3 million and a note in the financials recently lodged with the Australian Securities and Investment Commission claims that as of the 17th of February 2021, the company has entered a new loan agreement, Long Shining for $25M in US dollars and that the loan is secured and debt free.
ChannelNews understands that the business recently repaid this loan.
The business also has another loan listed on their books listed as ‘A Noncurrent loan payable’ of $30.49 million from a Sydney based business called Harmony Unity Pty Ltd.
A search of ASIC reveal that the director of this Company is one Yuchen Hou.
The business is registered at an apartment at 188A Abuklea Road, Eastwood NSW 2122.
Yuchen Hou the sole director of Harmony United that loaned $30M to an Oppo operating Company. He is also CEO of Oppo Australia.
Yuchen (Marvin) Hou is the Group Chief Executive Officer of Oppo ANZ, we have contacted him to ask whether interest is being paid on the loan and why he is loaning millions to a Company where he is CEO.
In 2021 OMC Electronics listed a loan from Harmony Unity of $28.43M, this has now risen to $30.94.
A note in the ASIC lodged OMC Electronics financials contains a statement by Zhiyuan Lian a Director at Wis the Companies auditors that “The Company incurred a net loss of $8,206,184 during the year ended 30 June 2022 and, as of that date, the Company’s liabilities exceeded its total assets by $48,047,202″.
He goes on to write ” A material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern”.
The directors of OPC Electronics are listed as Yuchen Hou, Chao Duan, Yanfeng Zhao Yunzhi Lin and Thanh Dai M. Tran (Michael Tran) as he likes to be called.
Michael Tran former Managing Director of Oppo Australia, he now lists himself as Global Marketing Director.
Tran who has not described as Director of Global Marketing and Brand Strategy at OPPO.
Total deficiency in equity is listed at $50.74 million.
In 2022 OMC Electronics spent $8.36M on marketing and promotions.
The total liabilities of this Company are listed at $98.4 million.
Questions have also been raised about another interlinked Company called OCPA Holdings Pty Ltd.
This business loaned OMC Electronics $1.8M.
This business has the same directors as OMC Electronics. As Of June 30th, 2022, this business reported a loss of $10.2 million dollars Vs a loss of $5.73M in 2021.
This business that also claims they sell smartphones claims revenues of $132M Vs $165M in 2021.
The liability of this business is listed at $98.93M as of June 30th, 2022.
Accumulated losses are listed at $50.7M.
A note in the accounts of this business claim that the Directors of OCPA Holdings have assessed the financial situation of the business and considered that the company will be able to continue as a going concern.
The shareholder of OCPA Holdings Pty Ltd confirmed that they will “subordinate” the amount owing from OCPA Holdings Pty Ltd in favor of other creditors and will provide necessary financial support to OCPA Holdings Pty Ltd to ensure its ability to pay off the debt when they fall due.
The consolidated entity will control the budget of marketing and promotion expenditure in the next 12 months.
The business that is ‘A supplier of smartphones’ to the Australian market claim that they anticipate that “sales (smartphones) is …expected to increase gradually.”
Analysts are tipping a downturn in the smartphone market with brands such as Apple and Samsung already cutting back on 2023 production.
Oppo globally is owned by BBK Electronics who are under investigation in several Countries including India.
In Australia they sell Oppo, Vivo and Realme smartphones.
Recently, two of its brands – Oppo and Vivo – have come under the scrutiny of tax authorities in India with questions now being raised as to whether the local operation should be investigated by ASIC and the Australian Tax Office.
Oppo globally is owned by BBK Electotonics who are under investigastion in several Countries including India. In Australia they sell Oppo, Vivo and Realme smartphones.
Recently the Indian Enforcement Directorate (ED) claimed that the Indian arm of Vivo had sent millions of dollars “illegally” to China in order to avoid payment of taxes in India.
This, according to the ED was half of Vivo’s turnover in India.
A few days later, The Directorate of Revenue Intelligence (DRI) detected customs duty evasion by Oppo Mobiles India Private Limited.
Some observers claim that the local operation should be investigated by ASIC and the Australian Tax Office in Australia.
ChannelNews and 4Square Media are not aware of any illegal activities by the Companies linked with the operations of Oppo in Australia.
We have reached out to Michael Tran at Oppo for comment, we are still waiting for a response.
