- An explosive Sunday Times report claims David Brown, former CEO of Ve Interactive, is being investigated for fraud.
- Ve Interactive is a former UK tech unicorn which fell apart spectacularly earlier this year, with Brown stepping down, and the company going into administration.
- Brown allegedly spent thousands of pounds of company money on renting luxury flats in central London, a hire purchase agreement on a £200,000 Land Rover, fine wine, and high-end furniture.
- He also allegedly spent Ve Interactive money propping up several other businesses, but didn’t declare this to investors.
The former CEO of Ve Interactive, an ad tech unicorn which fell apart spectacularly earlier this year, is being investigated over claims he spent £11.5 million of company money propping up his other ventures.
According to The Sunday Times, David Brown is also being probed over renting three luxury flats and a £200,000 customised Range Rover, and lavish expenses which included spending £45,653 on wine. A source with knowledge of the matter confirmed the investigation to Business Insider.
Brown is the founder of Ve Interactive, but stepped down as CEO in March after the company failed to pay staff on time. The company went into administration in April, before being rescued by its new management team.
According to The Sunday Times, that new team has called in legal firm Edwin Coe to investigate the way Brown allegedly spent Ve Interactive’s money.
When they took control, the new team found Ve was paying for Brown’s central London flat, costing £6,930 a month, plus another costing £4,170 for director Martin King. Brown’s brother Steve reportedly made use of a third flat in east London which cost £3,462 a month.
The team also found Ve had been financially supporting several other unrelated business ventures to the reported tune of £11.5 million.
First up was a consultancy called Thinkers HQ, owned by Brown, his ex-wife, Martin King, and King’s wife, according to the Sunday Times. Thinkers HQ owned several other businesses in turn — a furniture maker called Tree Couture, boutique shop Clerkenwell London, and training businesses Thinkers Connect and Thinkers Academy. There’s also a travel site called Travioor, owned by Brown’s girlfriend Irene Martinez. Most of these hadn’t been declared to Ve Interactive’s investors, bar Traviooz, Business Insider understands.
There was also thousands of pounds’ worth of Tree Couture furniture in Brown’s office. A source told Business Insider that you can actually see Brown’s office used as an example on the Tree Couture website.
Brown was reportedly about to install a billiards and pool room in one of Ve’s offices before his departure. He also had thousands of pounds’ worth of fine wine.
Brown said all of the allegations were “cheap jibes” and “misinformation,” according to the newspaper. He’s also threatening legal action against the administrators and Ve’s new management, and said there was “significant legal action under way.”
Ve Interactive did not comment. Edwin Coe did not immediately respond to a request for comment.
Ve Interactive’s new team was put in place by a consortium of its investors, including Aston Ventures; Mark Pearson, founder of vouchercodes.co.uk; and US investor Andy Astrachan.
The three formed a consortium called Treyew, which injected £3 million into Ve Interactive when it was struggling to pay staff, in exchange for Brown stepping down from the top job. Aston Ventures partner Morten Tonnesen took over as chief executive.
That new management wants to distance itself from Brown’s leadership, a source told Business Insider.
It bought Ve Interactive out of administration for a headline figure of £2 million but, the source said, has ploughed considerably more money in on paying staff salaries and other costs.