Investor Matt Newing has hit back after losing 拢600,000 following the decision to put Vibe Tickets into administration .
Other than a handful of comments on LinkedIn, the boss of Elite Telecom hasn鈥檛 spoken publicly after Luke Massie bought Vibe Tickets out of administration on April 30.
In an exclusive interview, 25-year-old聽Massie said he was “backed into a corner” and rubbished claims it was planned as 鈥渞idiculous鈥�.
He said due to a “very restrictive” shareholder agreement that was in place, the existing backers refused to provide any additional funds until new legal documents were drawn up to give them equal rights on the board.
As a result of the administration process, Newing and Elite Telecom, Vela Technologies Plc and Scott Fletcher lost 拢600,000, 拢400,000 and approximately 拢500,000 respectively.
Both Vela Technologies and Fletcher have agreed to invest in the new business.
Newing has vowed not to invest another penny buts says he鈥檚 decided to speak out now to put his side of the story forward.
The 43-year-old confirmed to 老九品茶Cloud that he tried to buy Vibe Tickets out of administration but lost out to Massie, and claimed 鈥渞ed herrings鈥� and 鈥渟pin鈥� had been put out there in the light of the very public fallout.
Recounting what happened he said things came to a crunch when Massie called an emergency board meeting, during which he asked investors to inject 拢150,000 into the business to keep it afloat while a 拢1.6m funding round with the then current shareholders and investors聽was closed.
Newing said: 鈥淥f this, I had committed 拢75k聽–聽which,聽as mentioned before,聽was聽almost double what my pro rata shareholding would have equated to聽(I had circa 20 per cent).
鈥淭his was on the table right聽up聽until the moment Cowgills were brought聽in聽by聽the directors聽which they聽had聽no option to聽do given the聽subsequent聽unwillingness of Luke or other investors (Fletcher/Vela)聽to similarly commit. It would have聽only聽taken a further聽拢75k to keep聽everything聽going.
鈥淚聽made an offer聽of聽拢150,000 (to buy the business out of administration).聽If accepted, this would have聽seen聽all creditors including HMRC聽adequately聽covered.鈥�
The administrator鈥檚 report claimed Massie originally tried to buy the business back for 拢30,000 but eventually succeeded with an increased offer of 拢160,000, enabling him and the other shareholders to 鈥渆njoy the spoils for聽themselves鈥� despite the fact that 拢75k would have kept the business afloat.
Newing said claims that the legal聽 structure was hindering further investment was a 鈥渟mokescreen鈥澛� and said Massie鈥檚 (pictured聽below)聽announcement that he was giving away shares in his new company to his original crowd investors did 鈥渘othing to聽compensate the many聽other small investors who had backed Luke and the business聽from聽as far as back as June 2016鈥�.
Newing added: 鈥淎t the insistence of Luke,聽 Fletcher and Vela, we聽all聽agreed in October 2017 to make the giving of investor consents as streamlined as possible so that Alex Cliffe, the 鈥榠nvestor director鈥櫬燾ould give or withhold consent聽quickly聽on behalf of the investors.
鈥淗owever聽–聽and this is the other red herring聽–聽there had聽not been a single occasion when聽Luke or the management had to聽approach any of聽the investors聽for their聽consent (or聽ask聽Alex to give it on their behalf聽as investor director) which聽is evidence聽in聽itself of both just how much scope聽Luke and the management had within the legal documents聽to get on and run the business.
鈥淲e were all just pretty happy and relaxed about letting him just get on and do what he needed to do. I,聽and I suspect others, were far too聽busy to be interested in the minutiae of what the team was聽doing聽on the ground on聽a day-to-day basis.
鈥淲hilst聽this could have been grounds聽in itself to possibly聽have聽more stringent legal documents, by any measure聽–聽and despite everything that has been said聽–聽the legal docs were as simple and聽vanilla聽as anyone in Luke鈥檚 position could聽have聽reasonably expected to achieve.
鈥淭he third red herring is all this talk about how the current legal docs were deterring other external/institutional investors from coming on board.聽Absolutely聽rubbish! That聽simply isn鈥檛 what happens in聽the real world.
鈥淲e pointed out that no new institutional investor would ever聽be expected to adhere聽to the current legal documents. That聽just isn鈥檛聽how these things work or how lawyers operate. Instead, they would have produced their own聽house style/standard template聽equity聽documents聽setting out the basis upon which they were prepared to聽invest.
鈥淚n such an eventuality, it聽had always聽been appreciated by me and others who invested alongside me that聽the current equity documents聽i.e.聽shareholders鈥� agreement and articles of association,聽would have been聽binned had we聽been successful in聽securing聽an institutional investor.
鈥淰ela, Fletcher and Massie all knew this but still they continued to talk about the barriers presented by the current legal documents.
鈥淔orget me and my position, small shareholders are key to funding new businesses and start-ups so should be treated with respect.鈥�
Fletcher publicly backed Massie in a post on LinkedIn in the wake of the first story: “I was a large investor in Vibe and continue to back Luke,鈥� he wrote.鈥� 鈥淚 can say with 100 per cent certainty this wasn’t Luke’s fault other than being naive when he was just 20 and signing up to ridiculous terms via an investment agreement.”
In an earlier interview with 老九品茶Cloud, Massie said: “The fact that some people think I planned this to rip people off鈥� that鈥檚 what I think has hurt the most.
“I honestly believe that in this world the only thing you have is your name鈥� and to have that publicly questioned when no one knew what went on and no one had the facts. One person even mentioned that I am young and na茂ve. What鈥檚 age got to do with this? At the end of the day, I鈥檝e probably brought in a lot more investment to the region than many other people have.”
Massie said he resorted to borrowing and selling personal assets 鈥� including Bitcoin 鈥� to help foot the bill.
“I had 24 hours to try and find the cash 鈥� I wasn’t willing to give up on it,” he said previously, insisting that the move secured 22 jobs.
Massie said Vela Technologies Plc and Scott Fletcher have both agreed to inject 拢200,000 and 拢500,000 respectively in the new business – and that he鈥檚 close to closing a new investment round.
Following Newing鈥檚 latest claims, Massie issued the following statement: 鈥淐learly Matt and I have very different interpretations of events that led to the administration. I disagree entirely with his claims but I don鈥檛 have the time or the inclination to re-tread old ground.
鈥淥ne thing I鈥檓 sure we can agree on is that it was a disappointing outcome for all involved. I鈥檓 comfortable in how I鈥檝e behaved throughout. I鈥檝e worked hard to protect Vibe鈥檚 original crowd investors in the only way I could, given the circumstances.
鈥淚鈥檓 looking ahead with a renewed focus and even stronger belief in what Vibe stands for and what it鈥檚 capable of. The shift in recent weeks in Vibe鈥檚 marketplace is too significant to ignore and demands my full attention. Now really is our time.鈥�