Study Case Analysis: OneTel Collapse

One.Tel was one of the fastest growing companies and the fourth largest telecommunication company established soon after deregulation of the Australian telecommunications industry in 1995. The company was a brain child of Jodee Rich and Brad Keeling who secured investment backing from Murdoch and Packer business empires and employed over 1400 people during its peak. In March 2001, however, the telecommunication industry was rocked by the news of the collapse of One.Tel. On May 28, 2001, One.Tel was put in the hands of administrators after an investigation of the company's financial situation showed it to be insolvent. Much of the blame for the collapse was attributed to poor corporate governance and unethical business practices by the senior management. One.Tel collapse has since been a subject of intense media scrutiny and management research with a large collection of commentaries, essays and analyses available in the media. ASIC's legal proceedings against One.Tel.

CPA Australia has a good resource of One.Tel background and copies of financial statements at the time of collapse.

How to analyze this case?

a) What was the nature of the business the directors of One.Tel were running?

b) What is the role of accounting information in decision making? Should the directors have known?

c) What were the key internal control failures, including accounting and reporting practices that stand out in this case?

d) What were the underlying corporate Governance, legal and ethical issues that led to its demise? e) What lessons can we learn from this case "the collapse of One.Tel"?

f) What are the summary of key legal issues and implications based on a review of legal proceedings ASIC against the company directors?

Please explain so I could learn how to analysis this case. Thank you.