The Australian Securities and Investments Commission has applied to the Federal Court of Australia for the appointment of provisional liquidators to six companies within the Uglii Group, as the country’s corporate watchdog ramps up its investigation into the embattled internet business.
As a self-proclaimed Google competitor, the online search company is facing up winding up calls from the ASIC amidst allegations of “serious corporate misconduct”, directed specifically at the six companies within the wider Uglii Group.
According to reports, they include Uglii Corporation, Traralgon Technology Holdings, Uglii Find Australia, BizMio, Projects Discovery Services and Uglii Ads System.
“ASIC is concerned that the Uglii companies are unable to pay their debts and we lack confidence in the management of the companies,” the ASIC stated.
“ASIC is also concerned that current and potential shareholders and creditors are not being informed about the financial position of the Uglii companies. It is a serious (and potentially criminal) breach of the Corporations Act for a director to allow a company to trade while it is insolvent.
“ASIC took action in the public interest, which includes the protection of shareholders and creditors.”
Action from the ASIC follows a troublesome six months for the struggling Melbourne-based internet firm, which lost its CEO John Knorr in February following Fairfax Media allegations of misleading investors with regarding to multinational dealings.
As also outlined by The Age, Knorr previously claimed his company was a competitor to Google, and relied on the “support from banking giant HSBC, China's postal system and India's ruling party.”
Yet with such claims proving false, and allegations mounting of a honey-trap type operation, in which Knorr has “snared at least $25 million from 3600 mostly unsophisticated investors”, the ASIC has decided to finally take action.
In particular, the ASIC alleges that the companies have been involved in “multiple contraventions of corporations legislation” and remain concerned that the companies are “not being properly managed and are insolvent or likely to become insolvent”.
Consequently, the ASIC seeks from the court the appointment of Robyn Erskine and Adrian Hunter of Brooke Bird as provisional liquidators of the companies, requesting a detailed report to the court that sets out the financial position of each of the companies.
ASIC’s application will be heard in the court July 1 and after the hearing, the court will decide whether a provisional liquidator should be appointed to the Uglii companies.
“The main purpose for seeking to appoint a provisional liquidator is to preserve the assets of the companies and maintain the status quo pending the determination of the petition for a winding up order,” the ASIC stated.
“The word “provisional” is a qualification not of the liquidator's powers, but of the tenure of the office; he or she is a liquidator but the appointment is temporary, pending the hearing of the petition to wind up.”