A Sydney-based startup that received over $65 million from investors has been placed into liquidation with just $50,000 left in the bank, with a Federal Court judge haranguing the company for having an app that “does not work”.
The startup, Bux Global, was launched in 2016 and spruiked itself as a mobile app which allowed users to easily transfer money internationally via their Bux accounts. According to evidence provided to the Court, the startup had raised upwards of $65 million from investors throughout its tenure.
The West Australian reports shareholders in the company include Aussie sports stars Danny Green and Greg Matthews, and other reports also name former editor of The Australian Chris Mitchell and current AMP chairman David Murray as former members of the startup’s advisory board, who both quit earlier this year.
According to Federal Court Judge Craig Colvin, the 450-plus shareholders in Bux Global were issued “repeated unfulfilled promises” an ASX listing would be pursued for the company. Instead, millions of dollars of investor money was allegedly used for “the private purposes of persons associated with Bux Global”.
This included a total $1.2 million that was allegedly transferred to the bank account of the founder’s wife. Furthermore, Colvin claims people involved with the promotion of the Bux app issued offers of shares “without complying with the prospectus provisions of the Corporations Act“.
Proceedings against the startup began in late-2017 after numerous shareholders applied through the courts to have the company wound-up, claiming the company had promised an “initial public offering or public listing on a stock exchange was imminent” but no progress had been made towards a listing.
Evidence provided to the Court also found the company “has received minimal earnings from the Bux App”, with reports showing it made just $12,000 in revenue with $8 million in operating losses. The Court also noted the majority of staff at the company had resigned.
The company sought to have the wind-up requests summarily dismissed, which was refused by the Court initially and after an appeal. Throughout 2018, the Court heard further evidence about Bux’s operations. However, the company seemed unfazed, with the judge noting it had “carried on casually and without regard to the seriousness of the winding up application that the company faces”.
Justice Colvin also claims during the case against the company, those in control of Bux ” took steps which support the conclusion” any business in relation to Bux and its apps were being phoenixed into another company.
“Very recently the signage at the notified principal place of business of Bux Global has been changed to remove the name of Bux Global. The name of another company, 2WayWorld Technologies, has been displayed at the premises,” Colvin said.
“The extent of evidence before me as to the activities of 2WayWorld Technologies indicates that it is involved in activities that might be described as being in the same field as that of Bux Global, particularly matters relating to the Bux App.”
The Court appointed liquidators Martin Bruce Jones and Andrew Smith of Ferrier Hodgson to manage the liquidation of the company.
StartupSmart contacted the liquidators but did not receive a response prior to publication. StartupSmart was unable to contact the founder of Bux or any representative for the company.
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