Shooting himself in the foot

Shooting himself in the foot

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The longer this campaign drags out, the more good stuff emerges against Sam Cohen. Ten years ago I wrote a chapter about what constitutes the most important aspect to a range of business issues. When it came to ‘customer service’ I wrote that ‘speed’ is of the essence. Deal with customer complaints quickly, and settle disputes with urgency. The longer they linger, the more chance of someone’s bottom being bitten.

Sam Cohen is living-proof that the longer a case drags out, and the longer a company chooses to disrespect its clients, the larger the hole in the ground.

For example, Sam Cohen and IHRB were deep-fried by the Police and the Health Care Complaints Commission. Instead of righting his wrongs, he decided to jump out of the frypan, landing into the fire, while protesting his innocence. The harder he tries, the more likely it is that he will put his foot in it. There have been several such moments for Mr Cohen. Here is another:

A former client of IHRB told me that Sam Cohen attended a CTTT hearing and, during the conciliation process, Mr Cohen cried poor, saying that IHRB can’t afford to provide a refund. The client alleged that Mr Cohen said something like, ‘How about I pay you $1000 out of my own pocket?’.

Two weeks ago, while offering moral support to another victim, I attended a CTTT hearing and, sure enough, with my very own ears, I heard Mr Cohen make the same offer, while crying poor. While a CTTT Member was in the conciliation room, in his capacity as a conciliator, Mr Cohen said that his business partner has deserted him, and that IHRB has no money, and that the client does not deserve a refund, but out of the goodness of his heart, Mr Cohen would offer to pay $1000 out of his own pocket, and not from the company’s funds. Indeed, Mr Cohen cried poor when it came to not paying his bills to his pharmacist.


What’s the big deal in all of this? Wow, it’s big alright. Mr Cohen is shooting himself in the foot — well, both feet really. Here’s how:

LEFT FOOT: A company that dares to say that it has no money to pay its debts, in the normal course of its business, is admitting that it is insolvent. The laws surrounding insolvency are perfectly clear: It is illegal to trade while insolvent. So is IHRB insolvent? Mr Cohen seems to suggest that it is. In which case, as the Director and Company Secretary, he can find himself in hot water.

RIGHT FOOT: A company that promotes a money-back guarantee, must make provisions for refunds. If IHRB has no money set aside for refunds (given that it promotes a 100% money-back guarantee as often as it promotes its phone number) then it is exposing itself big-time.

I am no lawyer and I am no accountant, but I would hazard a guess that Mr Cohen is on thin ice.


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