Malcolm Turnbull's son a secured creditor of failed $100m tech firm PlayUp
Shareholders are angry that the Prime Minister's son, Alex Turnbull, has emerged as one of only three secured creditors in PlayUp, the failed sports technology company backed by almost $100 million from some of Australia's most notable business, political and sporting identities.
PlayUp, which started as a sports gambling firm before morphing into a social media company,
entered liquidation in January after a winding-up motion brought by former employees over unpaid wages was not opposed in the Federal Court in Melbourne.
Close to $100 million of money raised from investors – ranging from business luminaries such as Goldman Sachs Australasian head Simon Rothery and
BRW Rich list members Allan Myers, John Higgins and Richard Smith, to athletes including Steve Waugh and Adam Gilchrist – has been spent.
Documents lodged with the Australian Securities and Investments Commission show Alex Turnbull, who owned a small stake in PlayUp's parent company Revo Pty Ltd, is a secured creditor along with Melbourne technology firm Kiandra IT and Bermuda-domiciled JMR Capital.
Alex Turnbull, who runs a hedge fund in Singapore, took a small stake in PlayUp three years ago, as did his father. Several sources have told
The Australian Financial Review that many shareholders are upset the Prime Minister's son had emerged as a secured creditor, effectively placing him at the head of the queue to receive at least a portion of any funds recovered by liquidator Grant Thornton.
Debt deal likely
Sources said Alex Turnbull negotiated a secured debt status with PlayUp management in 2014, when former NSW premier Nick Greiner was chairman. Mr Turnbull is understood to be poised to strike a deal this week to sell his debt on to another party, in a transaction that will see him lose money on his original investment.
But the Turnbull family has still extracted more money from their investment than just about all of the high-profile shareholders in PlayUp.
Malcolm Turnbull was a PlayUp shareholder, buying $1 million worth of shares in PlayUp shareholder Revo Nominees in mid-2012. But in August 2013, he sold his stake after it was revealed in a Fairfax Media story that questioned whether his shares in a media company might be a conflict of interest given his role as communications minister.
Company records examined by Fairfax Media show Revo Nominees paid $921,478 when Turnbull & Co shares were transferred back to the shareholder vehicle in November 2013. At least a chunk of that is understood to have gone to the Turnbulls.
PlayUp at one stage counted billionaire Bruce Mathieson, ex-Telstra boss Bob Mansfield, Asciano director Geoffrey Kleeman and Justin Ho as directors.
A statement by Grant Thornton said it was premature to discuss any findings publicly. "At this point, there have been meetings and discussions with directors, key employees and a quantity of books and records have been secured. The liquidator is developing his understanding of the company's intellectual property … including, inter alia, how funds were raised and utilised. The investigation will also include reviewing the validity of creditors' claims. It's still too early to call a creditors' meeting, however one will be convened at the appropriate time."
PlayUp was founded by entrepreneurs George Tomeski and Luke Bunbury, the company's only directors when it was placed in liquidation in January.
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