Failed IA startup lent founder $4.7 million for ‘personal asset purchases’

An AI marketing startup once valued at $1 billion collapsed into administration with just $20,000 in the bank and an outstanding $4.7 million loan to its sole director and CEO that was allegedly used to finance “personal asset purchases”.

Minutes of a meeting of creditors of August 9 obtained by Sydney’s morning herald Y Age Show managers from startup Metigy are investigating alleged purchases of personal assets by the former head of the collapsed firm, David Fairfull (who is not the David Fairfull who chairs accounting firm Hall Chadwick).

Administrators are also reviewing company records to check whether Metigy traded while insolvent or engaged in non-trading.

The minutes reveal that administrators Cathro & Partners believe the startup failed to file “the majority” of its tax returns or hire outside accountants to help complete its financial statements in the years since its founding.

David Fairfull, sole director and CEO of Metigy, a startup that collapsed, allegedly received a personal loan of $4.7 million from the company.

David Fairfull, sole director and CEO of Metigy, a startup that collapsed, allegedly received a personal loan of $4.7 million from the company.

Metigy, which promised to help companies improve their digital marketing through artificial intelligence, appeared to be a fast-growing technology startup that had attracted more than $20 million in investment since it was founded in 2015. One investor, Five V Capital, reportedly valued it at $1 billion in April.

But at the end of July, Fairfull placed Metigy in administration, ceased operations and laid off more than 70 employees. Investors, including Regal Funds Management, along with Metigy’s own managers, legally froze a $10.5 million trophy home in Mosman that the Fairfulls bought last year.

Charging

Fairfull and Five V did not respond to requests for comment. Reg declined to comment.

The minutes of the meeting show that when Metigy went into administration he had about $20,000 in the bank and a time deposit of more than $200,000, plus money owed by Fairfull. It also owed employees about $1 million in entitlements along with $227,000 to vendors, an intercompany loan between the Metigy entities of $16 million, and statutory liabilities of more than $2 million. Investors were owed about $32 million through convertible notes, according to the minutes. The government is also likely to be a creditor through the Australian Taxation Office, a representative at the meeting said.

Be the first to comment

Leave a Reply

Your email address will not be published.


*