Ann: Senior Secured Notes Update, page-10

From capital raisings to litigation funding, Anthony Murphy's covered all sides of Quintis

• Rear Window
• Nov 1 2017 at 7:30 PM
• Updated Nov 1 2017 at 7:30 PM

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Quintis is the target of a shareholder class action alleging the company failed to meet its continuous disclosure obligations.
The man who used to raise capital for now-embattled sandlewood company Quintis has just been appointed to the board of JustKapital, which is funding the class action against Quintis.

Yep, you read that right! Anthony Murphywas on Tuesday appointed to the JustKapital board. He's there because he heads up Lucerne Investment Partners, which owns 6 per cent of JustKapital and is also a lender and adviser to the litigation funder.

Last month, Bannister Law began a class action against Quintis alleging the company failed to meet its continuous disclosure obligations when it took six months to disclose the loss of a major contract. That action is being funded by JustKapital. Which is funny, because its newest director has a long history with Quintis. When he was at Canaccord, Murphy used to raise capital for Quintis' sandlewood investment schemes. He left Canaccord to head up Lucerne in 2015.

But some of his links to Quintis, which has been suspended from trading on the ASX since May, are more recent than that. Murphy was a co-plaintiff in a US case brought by ex-Quintis chief and founder Frank Wilson against Emerging Markets Intrinsic, an asset management company based in the Cayman Islands. The case concluded with no findings against any party in June.

Court docs filed by the plaintiffs (companies associated with Wilson and Murphy) show Murphy had a hand in arranging Wilson's margin loan with Emerging Markets Intrinsic. And JustKapital may even have been dragged into the action. When Murphy filed testimony alleging fraudulent behaviour on the part of Emerging Markets Intrinsic, it was claimed by the plaintiffs that the defendants began bombarding him with abusive text and social media messages. Some of these messages threatened to tell Murphy's other corporate clients about what had happened, with one set of messages saying "JKL" had been emailed. Which is the JustKapital ASX code.

Murphy told us Lucerne's investment in JustKapital goes back to 2016, further than JustKapital's decision to fund a case against Quintis. "We are never going to tell our investment companies what they can and cannot invest in," he said. "My appointment [to the JustKapital board] is purely to represent the best interests of our investors and shareholders."

Which seems fair enough. But still, it really is a small world ...