The following article was written by Tony Boyd in the Business...

The following article was written by Tony Boyd in the Business Spectator on 3/6/2009. Pity we didn't get articles like this at the start of the campaign.

After refusing to provide any meaningful financial support to world leading artificial heart marker, Ventracor, industry minister Kim Carr can now hand the problem to deputy prime minister Julia Gillard.

As employment minister Gillard will be responsible for paying out about $3.4 million owed to the 110 Australian employees of Ventracor utilising the General Employee Entitlements and Redundancy Scheme.

Gillard will now pay out about the same amount that could have come from Carr as seed funding so that Ventracor could remain viable and seek funds from retail investors, high net worth individuals and institutional investors.

When it comes to supporting small innovative companies Carr is all talk and no action.

His first significant action upon being made minister was to scrap the Commercial Ready program, which was put in place by the Howard government to help companies commercialise their innovations. Carr has not replaced that program leaving a vacuum for R&D funding of small businesses.

Ventracor only came into existence because of the Commercial Ready program's predecessor scheme called the R&D Start Program.

The founder of Ventracor, John Woodard, raised $3.5 million and, under R&D Start, that was matched dollar for dollar by the federal government.

Woodard said today that the Rudd government was obviously not serious about supporting small enterprises because it shut down Commercial Ready and never replaced it.

It is understood Carr's office talked about offering up to $4 million in tax breaks to Ventracor. But that offer just shows you how out of touch the bureaucrats are with the needs of a business burning cash.

Woodard's biggest concern is for the 150 patients walking around with Ventracor artificial hearts. They will be reliant on charity or goodwill to garner the ongoing support for their devices.

Woodard was working on a plan to take Ventracor private with funding from a handful of Australian high net worth individuals and an Australian bank. But they ran out of time.

As well, a group of Ventracor shareholders put together a conditional purchase agreement that involved $2.2 million being injected as a debt for equity swap. But the offer was withdrawn about an hour before the creditors met in Sydney this morning.

Ventracor was placed in liquidation this morning as predicted in a column published earlier this week. An offer from an American medial device company fell over at the end of June after it spent $750,000 keeping the company afloat for three weeks.

The liquidator, Steve Sherman of Ferrier Hodgson, will now proceed to sell the company's assets including its intellectual property, data from clinical trials, plant and equipment and residual assets.

Included among the assets for sale are 60 artificial hearts that could still be used to save lives or at least prolong the lives of those in need of a transplant.

However, Sherman told Business Spectator that he could not sell the artificial hearts or pumps unless he had approval from regulators in the various jurisdictions where the company operated.

An indication of the brazenness of those who comb over the wreckage of public companies is a letter Sherman received offering him $190 for five of the Ventracor devices. Each device sold for $100,000 each when the company was solvent and providing devices to surgeons in Australia and the United States.

Shareholders invested about $200 million over the past 10 years in Ventracor's intellectual property. It is probably worth a fraction of that now the company is in liquidation.

Ventracor had been involved in clinical trials supervised by the Federal Drug Administration in the US. It was on the brink of getting FDA approval to commercialise its products. Sherman said the company probably needed another $40 million to reach full commercialisation.

But Woodard said that the numbers he had done showed that once it had been recapitalised Ventracor could have been profitable.