SOUL Communications' $230 million absorption of TPG Internet is increasingly looking like a reverse takeover after a review revealed Soul is plagued by bad debts and a flawed business model. The findings of the internal review will result in Soul, formally known as SP Telemedia, writing off $60 million in bad debts, dealer commission payments and asset valuations in the year to July 31. The write-downs are expected to result in a $31 million pre-tax loss, to be confirmed when Soul releases its results in a month. What makes the turnaround more notable — it had predicted a $20 million after-tax profit — is that the company said the former TPG broadband business exceeded its forecasts for the four months it was part of the combined group. While no executives were quoted in the disclosure to the exchange, the revision is thought to be driven by TPG founder David Teoh, who became Soul's executive chairman and biggest shareholder in the merger.