Jeweller - August 2023

News
That’s all folks: Brisbane-based Everledger to face $19 million liquidation
Despite attempts to save the Brisbane-based
technology and diamond tracing company,
Everledger Australia has been placed in liquidation
with unsecured creditors totalling $AU19,178,371.
In addition, more information has come to light
about CEO Leanne Kemp’s previous companies and
business dealings.
The voluntary administrators published a notice
on the Australian Securities and Investments
Commission (ASIC) website on 12 July confirming
that a special resolution to wind up the company
had been passed.
Everledger was launched in 2016, and it was
previously thought that the acceptance of a Deed of
Company Arrangement (DOCA) proposed by Kemp
- seeing her pick up the company for as little as
$AU50,000 - would prevent it from being liquidated.
In a filing published on ASIC on 21 June, a
nine-step process was recommended by
voluntary administrator Steven Staatz of Vincents
Accountants which included Kemp (The Proponent)
forgiving a debt of $AU243,512 as a creditor and
making a payment of $AU50,000.
According to Kemp’s plan, she would be required
to assist Deed Administrators secure an Australian
government Research and Development Incentive
Return for the company valued at $AU625,000.
Following the successful completion of the DOCA,
the control of the company would be returned to
Kemp as director.
“In my opinion, it would be in the best interest of
the creditors to accept the proposal for a Deed of
Company Arrangement,” Staatz wrote on 21 June;
however, it all fell apart when the wind up notice
was accepted.
Everledger was initially placed under Voluntary
Administration on 24 April, and the subsequent
administrator’s report noted that, under Kemp’s
management, the company effectively survived on
government income and grants.
Further details revealed
This is not the first time a company led by Kemp
was placed under administration following the
failure to secure government research and
development funding and/or tax concessions.
Following Jeweller’s recent reports on companies
with which Kemp has been associated - as director
and/or shareholder - various industry sources have
come forward with further information.
These voluntary submissions relate to Everledger,
Phenix Jewellery, Absoft, Kemp’s personal work
history, as well as additional companies where
external administrators were appointed.
Jeweller has now learned of another legal matter
concerning Kemp and the Australian Government.
The dispute was over taxation concessions,
between the government and her Absoft Qld
company (which had changed its name to
'Naughtsncrosses Pty Ltd’). Kemp went to
the Administrative Appeals Tribunal of Australia
following the denial of generous research
and development tax concessions claimed by
Absoft Qld.
Innovation Australia is the independent statutory
board that advises the Australian Government
on innovation, science, and research matters - in
conjunction with the Commissioner of Taxation.
An independent assessment in 2009 had
determined that the activities claimed in connection
with Absoft’s technology project did not satisfy
the statutory criteria. Following Kemp’s challenge
of the decision, the Appeals Tribunal upheld
Innovation Australia’s original decision to deny the
claim for tax concessions.
Appeal Tribunal deputy president Phillip Hack
concluded that Kemp’s evidence was lacklustre.
“The evidence of Ms Kemp about this document
was vague; she did not know whether any of the
parties signed a version of this document but it was,
she said, ‘executed by way of a payment’ (whatever
that might mean),” the decision reads.
As part of her appeal, Kemp claimed that the sale
of the product had been made to another company
in 2007; however, Hack had a different view.
“The evidence falls well short of satisfying me that
was so but even if it were it is not demonstrated
that the software was developed for the purpose of
sale, lease, etc. to two or more entities,” he stated.
“If contrary to my view of the evidence, there was a
second later sale that was, at best, opportunistic;
it does not demonstrate the purpose of the original
activity in writing the software.”
Is history repeating itself?
Hack also criticised Absoft’s case indicating
that it was not easy to discern and much of it
was couched in generalities.
“[Kemp’s assertions] did not point to any evidence,
perhaps because there was so little evidence to
which reference could be made,” Hack concluded.
The Appeal Tribunal’s decision to uphold
the original decision denying Absoft
(Naughtsncrosses Pty Ltd) tax concessions
was made on 24 October 2012.
ASIC records show only seven days after the
decision, Absoft Qld was placed under
Voluntary Administration, on 2 November 2012.
It is worth noting that Kemp has previously
attributed the collapse of Everledger solely to
decisions made by other people.
In an interview with JCK Online, she claimed
that the withdrawal of financial support by other
shareholders was a breach of a legal agreement;
however, she has not explained why or how that
occurred. She also alluded to legal action against
the unidentified investor.
“We had a legal agreement, and we feel there’s
been a breach of that agreement. We will let the
legal process run its course,” she said in an article
published 16 May.
It is unknown whether Kemp intends to make good
on her legal threat now that Everledger Australia is
in liquidation.
Jeweller has contacted Kemp multiple times for
comment since the collapse of Everledger in April;
however, she is yet to respond.
August 2023 | 21