By Stewart Carter Editor, eCommerce ReportShareholders of listed Australian IT company, Cosmos are hardly unused to bad news. After all, it has accumulated losses now total in excess of $70 million.However, even by Cosmos' standards, 2005 has been an exceptionally bad news year. The results for the six months to December 2004, released in February, showed a further $1.8 million added to the total lost.Then on the March 7, the company issued a series of statements to the ASX. Cosmos announced that its company secretary John Garrett - had been replaced, that a long-standing director Bob Tynan had resigned and replaced by two new directors, and said that the employment of its chief executive, Nigel Purves had been terminated with immediate effect.Purves had also been Cosmos managing director and indeed one of only four directors in total at Cosmos. So only one director was left remaining from those who sat on the board at Cosmos last year - chairman Henry Preston. But in early April Preston "resigned to concentrate on his private interests". To top it all off, Cosmos has since become embroiled in allegations that its pharmacy software fixes prices in contravention of Trade Practices law.Until recently, the real reasons for the extraordinary turmoil at Cosmos board this year could only be a matter for conjecture.Now, however it has become clear that the clean-out of the Cosmos board followed the involvement of its wholly owned subsidiary, Cosmos E-C Commerce Limited in a Western Australia Supreme Court action.Cosmos subsidiary is a not insignificant player in the Australian payments industry, with its payments gateway servicing up to $2 billion in transactions annually.According to the company's 2004 annual report, it has some 200 businesses as customers of its ecommerce services. They include a number of Sydney area local councils such as Waverly, Fairfield, Wollongong and Warringah.So it is something of a twist that a dodgy Cosmos cheque payment was a key piece of the recent WA Supreme Court action.Details of the action, which was heard in Perth on March 21 and 22, came to light a few weeks ago, when the decision of Commissioner Siopis was published on the web.Siopis found that former Cosmos chief executive and managing director, Nigel Purves, and former Cosmos company secretary, John Garrett, were both involved in some fairly unsavoury corporate skullduggery at WA company - Resource Equities.Purves and Garrett both held directorships at Resource Equites but their positions, and that of chairman Leon Carr, were under challenge from a group of disgruntled shareholders.The challenging shareholders looked to have enough shares to vote them off so to defeat the challenge the three directors hit upon a plan to issue 7 million new shares to Cosmos at 5 cents per share, ostensibly to raise working capital. The share issue was approved when the three met immediately ahead of the company AGM on October 29 last year. As it turned out the shares weren't needed to fend off the challenge at the AGM, but they were needed at a