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Law firm plotting class action over Guvera financing
By Chris Cooke | Published on Thursday 16 November 2017
An Australian law firm has confirmed it is investigating the possibility of launching a class action lawsuit in relation to failed streaming service Guvera, with private equity outfit AMMA and a number of accountancy firms it had relations with the likely defendants.
As previously reported, Guvera finally shut up shop earlier this year, after a disastrous attempt at an Initial Public Offering on the Australian stock exchange last year forced it to bail on numerous markets and put some of its subsidiaries into administration.
More recently, the spotlight was put on how AMMA had raised money on behalf of the Guvera enterprise, and whether Australia’s Corporations Act had been breached in the way unsophisticated investors were persuaded to put cash into the business. In particular, concerns were expressed about AMMA’s relationship with various accountants whose clients had been persuaded to invest in the incredibly risky streaming set-up.
Although Darren Herft, a founder of both Guvera and Amma, insisted everything had been above board, back in June the Australian Securities And Investments Commission confirmed to reporters that it was taking a “close and active interest in the fundraising associated with Guvera and related matters”.
It was around about that time that rumours began to circulate that a number of law firms were considering putting together a class action lawsuit for some of those unsophisticated investors who had just lost all their money in the Guvera adventure. Now legal outfit Bannister Law has put out a formal call for said investors to join its class.
In a statement on its website, Bannister Law notes: “Guvera Limited, a music streaming service company, engaged a private equity company AMMA Private Equity Pty Ltd. From 2009 to 2016, AMMA raised $185.3 million on behalf of Guvera”.
Adding that “initial investigations show that accountants were providing advice to their clients on the prospects of this investment”, it then confirms it is “currently investigating a class action against a number of accounting firms and AMMA Private Equity Pty Ltd”. The company’s Charles Bannister adds: “We are investigating as to how the money was raised and any advice provided to consumers when considering the investment”.
It’s not clear how many former Guvera investors are already on board for the class action, though one possible claimant is quoted in the law firm’s statement as saying: “I am a simple investor and lost $30,000 of my superannuation savings on the poor advice of my accountants”.
It now remains to be seen how many disgruntled Guvera backers come forward and whether Bannister does indeed file legal proceedings against AMMA et al.
