Explorer has moved on revenue partner Mercantile Bank in a legal battle to recoup some of the damages it claims it is owed.
Explorer has been operating with Mercantile on a revenue split agreement, whereby Mercantile facilitated the operations and banking detail of the Visa branded Explorer card and Explorer would be responsible for growing the customer base and marketing.
The revenue split operated on a two thirds, one third split with Mercantile the dominant party.
In a Sens announcement late this afternoon, Explorer advised shareholders it would be seeking legal redress and damages against Mercantile for what it terms, a "breach of its contractual obligations" and repudiating agreements between the two parties.
Also in the announcement, Explorer made reference to Mercantile unilaterally making use of Explorer`s logo for a newspaper advertisement advising cardholders to contact the Mercantile call centre in future business dealings.
Explorer CEO, Aaron Stanger says he has had to make the decision to either liquidate the company or fight for the shareholders and seek damages against Mercantile.
"We have done everything in our power to keep negotiations between ourselves and Mercantile amicable, this was not to be. Mercantile have effectively strangled Explorer and have not come to the party regarding out September 11 agreement to rationalise back-office functionality," he says.
Stanger alleges Mercantile has denied Explorer access to large parts of the revenue stream owed to it in the agreement, thus hampering the company to such an extent that Stanger says it drove his directors to seek a share suspension.
"Mercantile controls the credit book, which at the moment stands at R60 million, the result is that we are working at a quarter of our capacity, Mercantile clearly has no intention of honouring agreements and is acting in an overtly hostile way towards us."
The hostilities between the two companies is not new; Explorer had filed against Mercantile three months ago, although at that stage the legal action was called off and Explorer continued with business.
Explorer has unilaterally terminated its agreement with Mercantile while it consults with its legal team in order to quantify a damages claim.
When contacted, Mercantile said it would issue a statement on the matter, but it had not done so at the time of publication.
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