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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.
On 12 July, the voluntary administrators published a notice on the Australian Securities and Investments Commission (ASIC) website confirming that a special resolution to wind up the company had been passed.
The company’s UK-based parent, Foreverhold Limited, was placed into liquidation in May.
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, on Wednesday 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.
“The Company’s income for the year ended 31 December 2021 and 2022 were largely attributable to grant income which represented 83 per cent and 84 per cent of the total income respectively,” a filing on 23 May states.
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 previously reported that when Kemp was appointed by Queensland Premier Annastacia Palaszczuk as the state’s Chief Entrepreneur, government documents recorded bankruptcy proceedings against Kemp.
The government documents had been redacted; however, Jeweller subsequently learned that she was sued by a company called Lexington Trust Pty Ltd.
During Kemp’s term as Chief Entrepreneur (2018-2020) – Palaszczuk extended her term by a year – Everledger recorded losses of around $AU5 million.
More recently, Jeweller reported that Everledger’s website featured a number of other organisations’ intellectual property (IP) which had been misappropriated and their logos were being used to promote “trust” in Everledger.
Furthermore, an earlier and long-running IP legal case concerning a jewellery trade mark concluded with a Federal Government agency issuing ‘bad faith’ finding against Kemp.
The legal dispute involved two businesses as the Applicant of a trademark: Phenix Jewellery (Kemp was a shareholder and held a senior management position), and Absoft Qld, an IT service provider to Phenix Jewellery (Kemp was a director).
The Opponent to the application was Jewelscan. That legal case concluded in October 2012 and, in a damning decision, the Applicant(s) were found to have acted in ‘bad faith’ by the Australian Trade Marks Office.
New information – history repeating itself?
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.
Innovation Australia determined in 2009 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 IT 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.”
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.
It is also unknown whether the various investors – which included the $US400 billion Chinese tech giant Tencent, owner of WeChat – were made aware of Kemp’s previous business history prior to making substantial investments in the blockchain start-up.
Trust and transparency
Despite the controversy surrounding Kemp and the collapse of Everledger, she has remained vocal on various social media platforms about trust and transparency in the international jewellery industry.
She recently confirmed on Twitter, that she will be a guest speaker at the ‘Founder and CEO Summit’ hosted by the UK-based Women’s Business Club.
The Club’s website describes the event: “A remarkable gathering of influential women entrepreneurs and business leaders from around the world.
“This exclusive event provides a platform for women who have built or led successful companies to come together and share their inspiring stories, insights, and valuable advice.”
While Kemp has taken the time to promote and advertise her appearance at the event, she has not publicly acknowledged the collapse of Everledger anywhere. Her extensive Linkedin profile makes no mention of the $AU19 million failure, nor does her Twitter account.
Ironically, the announcement that she would appear at the Women’s Business Club event in London was posted on 11 July, just one day before the special resolution to liquidate Everledger Australia was passed.
As previously reported, following more than $AU50 million in funding since inception, and more than 25 years in the IT industry, Kemp’s company collapsed with no assets.
“It appears that the company does not hold any intellectual property that may be commercially realised,” the liquidator reported.
Kemp, who described herself as a ‘serial entrepreneur’, is also scheduled to be a guest speaker at an upcoming jewellery industry summit in Sydney (26-28 August).
Jeweller has contacted Kemp multiple times for comment since the collapse of Everledger in April; however, she is yet to respond.
I’ll be speaking at the Founder & CEO Summit, sharing my journey & insights to inspire women in business worldwide. Join me for this empowering virtual event at https://t.co/0ooZ6FPuq8 #WomenInBusiness pic.twitter.com/hwjjvUqAV3
— Leanne Kemp??? (@leanne_kemp) July 11, 2023
More reading
Skeletons in the closet: Everledger CEO’s bad faith practices under the microscope
Inconsistencies and oddities in Everledger CEO’s background
Lust for trust: Everledger in hot water for misuse of third-party logos
Everledger collapse places Queensland Government in firing line, CEO faced bankruptcy in 2004
Everledger collapse: Questions raised around business model, management
Second collapse in Everledger saga; CEO denies ‘cash-burning’
Australian diamond tracing tech company collapses
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