Sydney Tools has confirmed it is suing competitor Total Tools over an alleged email hacking.
According to Sydney Tools, Total Tools hacked into its email system last year to give them insight into its competitor’s plans before they were announced to the market.
Sydney Tools claims that several senior officers and employees at Total Tools took part in the hacking system, including CEO Paul Dumbrell, Chairman Warren Jones, franchisee Anthony Soccio and others.
According to Sydney Tools, Soccio covertly accessed internal Sydney Tools emails using a password he obtained from a former Sydney Tools employee. Sydney Tools alleges that these emails were distributed to others within Total Tools “so the emails could be read, analysed and used to inform Total Tools’ head office’s commercial decisions”.
Sydney Tools also alleges that “Total Tools’ head office conducted the scheme without Sydney Tools’ knowledge or consent and deliberately kept the scheme secret from Sydney Tools”.
Further claims included “contacting a number of suppliers of products to Sydney Tools that were identifiable from the emails, and implementing advertising, product drives and other initiatives to compete against the planned promotions and initiatives of Sydney Tools that were revealed in the emails”.
“No email system was hacked.”
However, Total Tools CEO Paul Dumbrell denies the claims.
“No email system was hacked. Sydney Tools failed to close or shut down a staff member’s email who had left the company, so there was no hacking as alleged,” Dumbrell told Inside Retail. “The emails in question were broad mailings to a staff member within stores and weren’t commercially sensitive. Clearly, we will vigorously defend the matter as it goes on.”
Last year, Sydney Tools announced plans to add 40 stores in every state in the next five years, focusing on both capital city and regional locations.
“We have a massive ‘runway’ ahead of us. Australia, like the US, has a large ‘tradie’ market so we’re confident with our expansion plan,” Jason Bey, director of Sydney Tools, said at the time.
“We have just finished implementing a range of new software systems which fits in with our program.”
In June this year, Metcash acquired Total Tools for $57 million. Under the plan, Metcash will provide Total Tools with a $35 million debt facility to support its growth plans and the potential future acquisition of interests in a select number of stores.
The matter is back before the Court on 5 November 2020.