Technology

Guvera ceases operations, co-founder Claes Loberg leaves

Michael BaileyRich List co-editor

Updated May 12, 2017 – 10.58pm, first published at 9.34pm

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Guvera Limited has ceased all operations nearly a year after the ASX rejected the music streaming service's controversial $1.3 billion float, with co-founder Claes Loberg stepping down as director and major backer Steve Porch also giving up.

In a Friday night note to the 3000 shareholders from whom Guvera raised $185 million between 2008 and 2016, sole remaining director Darren Herft asked for two volunteers to replace the departees on Guvera's board and help him "rebuild our company".

Messrs Loberg and Porch owned 11.5 per cent and 6.5 per cent of Guvera shares respectively as at the 2016 prospectus. Mr Herft indicated Mr Porch's Coterie Nominees had provided further funding over the past 12 months, but that had now ceased.

Guvera co-founders Claes Loberg (left) and Darren Herft. Wayne Taylor

After narrowly escaping an insolvency bid in January from an investor owed $1.8 million, Guvera briefly reinvented itself as provider of a tracking tool for advertisers on a white-labelled streaming service in India and Indonesia.

The company needed the revenue to meet terms of a deed of company arrangement (DOCA) administered by Deloitte, after it placed subsidiaries Guvera Australia and Guv Services into administration last year, sacking 80 staff. Under the DOCA, Guvera was supposed to pay $180,000 a month to creditors of the subsidiaries, but Mr Herft admitted that DOCA may now be subject to "further claims".

Mr Herft still held out some hope of a capital return to shareholders, saying Guvera Limited held "valuable IP" which could be commercialised or sold. The company owns shares in video messaging play Kwickie, of which Mr Herft is also a director, and Street Talk reported in February that he had approached Guvera shareholders to buy shares in this venture. Mr Herft claimed Guvera now wanted to sell its Kwickie shares to "re-establish working capital".

Mr Herft claimed Guvera Limited was also owed $6 million in refunds for company tax and research and development. In his note, Mr Herft lamented that the R&D had been registered by AusIndustry last September and the refund was supposed to be payable within 30 days, but accepted that "the Australian Tax Office is following a process it is entitled to".

However the ATO is expected to find an extra $4 billion from 'integrity measures' in 2017-18, and even one of the 'big four' accountants is understood to have written several cheques refunding commission to clients whose R&D claims have been retrospectively rejected. So Mr Herft could be waiting a while yet.

On the downside, Mr Herft noted two court cases involving Guvera Limited remained outstanding: one against staff from failed acquisition Blinkbox Music, who are claiming entitlements, and a related case against former UK direct Michael de Vere.

Mr Herft co-owns AMMA Private Equity, who together with its network of accounting firms raised most of Guvera's funding, much of it from self-managed superannuation funds. Mr Herft said he was "as upset as anyone" about the company's predicament.

Michael Bailey writes on entrepreneurship and the arts. He is also responsible for the Financial Review's Rich Lists. He is based in Sydney. Connect with Michael on Twitter. Email Michael at m.bailey@afr.com