- A Perth-based startup with an app promising cheap international money transfers has been put into liquidation.
- The Federal Court was told that Bux Global raised at least $65 million.
- Evidence was given to the court that cash raised went to fund the private expenses of those associated with the startup and that the app didn’t do what it was meant to.
Bux Global, a fintech with an app promising to disrupt the way multi-billion dollar international payments are made, raised tens of millions of dollars from investors, some of them reportedly high profile sportspeople, before going under.
A Federal Court judge, who appointed Ferrier Hodgson’s Martin Jones and Andrew Smith as liquidators, says investors put at least $65 million into the Perth-based business from when it was launched in 2016.
Other reports say as much as $100 million was raised, much of its from families and local personalities in Perth.
Evidence was given to the court that cash raised went to fund the private expenses of those associated with the startup and that the app didn’t do what it was meant to.
“The Bux app does not work,” said judge Craig Colvin.
Less than $50,000 remains in cash in the company.
The 450 investors were promised an ASX listing but it didn’t happen.
And evidence has been given to court that those involved promoting the app disseminated offers of shares without complying with the prospectus provisions of the Corporations Act.
Former Western Australia Liberal Party leader Matt Birney says the startup asked him to be a non-executive director, according to a report in the West Australia. He refused despite an offer of $90,000 a year.
David Murray, a former Commonwealth Bank CEO and now AMP chairman, was at one point a member of the advisory board, along with Chris Mitchell, the former editor in chief of The Australian newspaper, and Simon Kelly, a former CFO at Nine. They all quit earlier this year.
Between 2007 and 2011, a total of about $1.2 million was transferred to Roslyn Webber, the wife of Bux Global founder Raymond Webber, the court was told.
“Bux Global was the latest in a series of companies which had been used to raise funds from investors for the development of the Bux App on the basis that there would be a public listing of a company conducting the business in which the investors would have shares that could be publicly traded,” the judge said.
“Responses provided by Mr Andrew Webber, as a director of Bux Global, to inquiries by the Australian Securities and Investments Commission (ASIC) concerning its fundraising activities were of a character that are properly described, as submitted, as being not candid.”
And as disgruntled shareholders made applications to the courts to have the company wound up, those in control of Bux Global “took steps which support the conclusion” that the business was being phoenixed into another company (a process by which the assets of one company are shifted to another, leaving behind debts and other obligations).
The signage at the principal place of business of Bux Global was changed to 2WayWorld Technologies which, the judge says, is controlled by an associate of those who had been directors of Bux Global.
The court was given evidence that Bux Global sacked its lawyers shortly after it was required to provide affidavits to the court.
“The evidence does show that there have been recent and apparently significant changes to the services offered by Bux Global by means of the Bux App,” the judge said.
“It also shows that there have been changes in those who are in control of the company. It also shows that Bux Global appears to have discontinued its operations at its principal place of business.”
At first the underlying basis for the app, a smartphone app to make cheap international money transfers, was well received at launch in 2016 with a huge market ahead for cheaper and faster transfers. (The company has no relationship with the Netherlands-based financial trading app also called Bux, founded in 2014.)
“Recent events indicate that the affairs of Bux Global are being carried on casually and without regard to the seriousness of the winding up application that the company faces,” the judge said in the federal court in Perth.
“They also indicate that those who have been involved for a number of years in the business activities currently carried on in Bux Global have at least ceased their involvement as directors of the company. There is also the evidence of the changes to the website.”
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