Shareholders hit the blog over Manabars mystery

Investors question mysterious vesting proposal

Shareholders of defunct start-up Manabars Technologies say they are worried about a “mystery” investment proposal that has been put to them.

The proposal, which is said to involve injecting $6 million into the company, requires shareholders to vest ownership in Manabars IP — without knowing who the investor is or what the proposal actually involves.

Manabars IP held the intellectual property of Manabars Technologies, which was liquidated in April and is currently being investigated by PricewaterhouseCoopers.

A blog called MIP New Investor, which aims to provide a forum for feedback and discussion around the proposed vesting, reveals that shareholders are concerned about the secrecy surrounding the new investor.

One blogger asked how many of the benefactors needed to vest interest before the “mystery company” could progress with its work. The Manabars’ representative, known only as “Admin” on the site, replied that the investing company couldn’t invest until all beneficial shareholders had vested.

At the end of July, a blogger called “Girl” asked: “Shouldn’t we be sorting the matter of the dodgy share distribution before we do anything else?”

To explain her comments about “dodgy share distribution”, “Girl” went on to say that shareholders received a letter from CTO David Hughes in January suggesting there were technical issues with shareholding. Another letter from Hughes, in March, said that creditors of Manabars Technologies had converted debt to Manabars shares at 5 cents a share — “and this happened after the company became insolvent”.

”So, now some people turn up who don’t want their identity known but they want something we have... why would I assign anything to some mystery people when there were potentially illegal activities going on in MTL [Manabars Technologies Limited]?”

“I think I would like to wait [and] see what PricewaterhouseCoopers comes up with, the shareholding issue really must be settled before anything else happens.”

“Admin” responded that there were no illegal activities going on at Manabars. The conversion to shares at 5 cents a share was in no way advantageous to the lenders, said “admin”. This was done in an attempt to assist in keeping the company going. “The subsequent liquidation of MTL would support the 5 cents a share price,” said “admin”.

“The identity of the investor will be made known in due course and obviously prior to any decision being finalised. You are being asked to vest your ownership back to Manabars IP Limited to allow a significant investment to be made in the intellectual property. Without investment the Manabars technology will not be completed,” said “admin”.

“Waiting for PWC will ensure nothing happens and the opportunity and your investment will be lost.”

Another blogger, called “Andrew”, commented: “With the current arrangement, I don’t know what I own”. But he concluded his holding must still have some value because “there is this idea of re-investment”.

“[But] I do get the feeling like I am being asked to do this vesting without knowing the full implications,” he said, likening it to being asked to give a stranger a $100 note just because he asked for it.

“Admin” responded that the shareholders’ ownership in Manabars IP mirrors the ownership they have in Manabars Technologies. “There is value if the technology is completed.”

In a mid-July post, “admin” said: “Without any further development funding, all shares are probably worthless. ‘XYZ New Investor’… will clearly outline its aspirations, and beneficial shareholders can then make a decision.”

When trying to contact Manabars’ chairman, Allan Rutledge, Computerworld was told his phone number was no longer listed.

Former CTO of Manabars, David Hughes, said he could not comment on the investment project, because he is not involved. But the technology was 70% completed before the funding ran out, he said.

“It is an interesting space, so I hope it comes off,” he said.

“The technology has a lot of potential.”

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