OVT (ASX) Ann: Legal Action by Clee Capital

Originally posted by Zingy: ↑

Hi all, as indicated yesterday I had a call and also with Ben Reichel new Co Secretary and this is generally how it went and hopefully got all my notes correct.

Nevertheless I am sincerely hearted by the purpose and approach that Ben and the remaining board members are taking to resolve this matter on behalf of the shareholders and current IOU staff and customers.

IOU Q&A with new Co Secretary Ben Reichel

Q: It appears that the previous board fell asleep at the wheel?

A: certainly the remaining board members feel a great deal of regret but if someone (cfo) and possibly others are in a position that enables them to easily mislead and hide certain actions this makes it rather hard for any board. That said we are resolute in purpose to secure the business and assets.

Q: What do we know about the purportedly missing cash?

A: it appears that the fairly reputable local law firm which was said to be holding these funds in escrow were unaware of its existence and we have reason to believe the former CFO had forged a law partners name on the letter of confirmation presented to the board. This is a very serious matter and certainly not to be taken lightly as further evidence of significant fraud not only misappropriation of Co funds.

Q: Ben, you have been in the role as Co Secretary for two weeks how do you feel about the situation and fellow board members?

A: good question well yes I was concerned as things began unfolding so quickly but this is what I do and as we ploughed through it I’ve formed the opinion that this is a very worthwhile fight and the shareholders deserve immediate and uninterrupted action to be taken to secure the business and assets. As for My fellow board members we are absolutely unified and I hold each in very high esteem.

Q: Have you been to the iou office in KL and what had you learned?

A: yes in week one we advise the local team management of our intention to travel there but had little response while the former cog avoided Aaron and I. We arrived and were told by security the office had been closed. It turned out the CFO had closed the office and sent the team home for the entire week. He continued to avoid us. We since discovered a number of unauthorised transactions and loans to related entities of the former cfo including payments to his wife.

Q: Are you confident in retrieving the stolen funds and what other strategies are you looking at such as liability insurance?

A: Yes we believe we can revive a great deal of the funds but we are working on this now with a newly appointed forensic auditor Crow. Yes in addition we feel there is a strong case for an insurance claim against a party for any unrecoverable funds & will pursue these.

Q: What steps have you taken to right the business and secure assets on behalf of your shareholders?

A: Well we have begun taking actions including regrettably letting go around 50% of staff, cutting spending and office space. I confirm the Myanmar office is totally shut down and we are looking at other areas to find significant savings. We are very confident that the business can be cash flow positive in a very shortly period of time. The Mobile payments business is strong and we simply have to manage the Telcos wholesale services costs but the receivables are wholly profitable it’s just a matter timing when due. We have some other work to do to clean up the accounts and work with some vendors but again the business has very good prospects esp with assets held. We are talking to a number of lenders for capital injection that aims to provide buffer only while we sort out the cost management and recovery of stolen funds. One of these discussions is quite advanced and for up to $5m.

Q: have you had dealings with IDSB and can their Dividends be lifted?

A: Yes I met with them and very impressed with the business and opportunity in front of IOU with the short term financing business. Actually we are asking if the dividend payment ratio can be lifted as they seems to have a fairly conservative approach but they also need to be mindful of their Capital Reserves requirements.

Q: What about the AG code license, are you concerned?

A: Happily they have advised us that this is expected with Q2 this year so that will be a great outcome for IOU and it’s shareholders.

Q: What can you say about the Clee Capital group actions?

A: This is very concerning indeed and especially that they are working with the former CFO which does not reflect well at all on them and goes to their intentions. They helped arrange the CR in 2021 and were paid $3.5 million AUD from it, they have since claimed a further $1.25 million due to unissued options exercisable at $1 each. These were eventually issued. They have no claim whatsoever but this is why we believe they want board overturned to stack it and favour their unjustified claims.

Q: What about the EGM and communications?

A: Absolutely we will nominate a date within the required timeframe date likely early May. Now it’s up to shareholders then as to what they want to do but in the meantime we will be getting on with the task of recovering the business and putting it into profitability ASAP. Communication had as I understand it not been great but I’m no in charge of investor relations and this is a key focus. Actually you should expect another update very shortly.

Thanks for your time and transparency Ben.

non of this is advice and are my own notes from my conversation but like Number above I too encourage you to contact iou and I think you will find a very approachable and determined team are in charge now.

Zingy

Expand

I am reluctant to believe what Ben said. How would he know what’s really gone on as company secretary for only 2 weeks. And why did Jarrod White suddenly leave the position as secretary?

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