The former CEO of failed Australian streaming service Guvera, Darren Herft, has been banned from managing corporations by the Australian Securities And Investments Commission. The ban actually came into effect last month and will last for two years.
Digital music platform Guvera was founded by Claes Loberg and Herft in 2008 and operated in numerous markets during its ten years in business. It often stated that its main focus was on the yet-to-be-realised potential of ad-funded music streaming, although it also offered paid-for options.
Things really started to fall apart for the Guvera business after its failed bid to enter the UK market in 2015 via an acquisition of Tesco’s Blinkbox Music. A year later a proposed Initial Public Offering was knocked back by the Australian Securities Exchange over concerns with the Guvera business plan.
In the wake of that knock-back Guvera’s operations were scaled back with two of its Australian companies being put into administration. A year later Guvera ceased operations entirely, with various companies in the Guvera Group falling into liquidation. The Australian Securities And Investments announced an investigation shortly after.
Herft’s actual role at Guvera varied over the years, but among other things he led on raising finance for the company via a separate investment vehicle he headed up called Amma. Much of the finance that paid for Guvera came from smaller, less sophisticated investors, leading to criticism of its fundraising approach, especially after the company had collapsed.
In a statement published earlier today, ASIC sets out a number of ways in which it believes different Guvera companies failed to meet their statutory obligations. Herft also, the regulator states, “improperly used the Guvera Group structure for his gain and the gain of others in circumstances where there were significant conflicts of interest in the operation of the companies within the group”.
Confirming the ban, the regulator’s statement goes on: “ASIC has disqualified Mr Darren Russel Herft, of Sanctuary Cove, Queensland, from managing corporations for a period of two years. The disqualification follows the failure of four companies within the Guvera Group, which operated and developed a worldwide music streaming platform. An additional three failed companies were also considered by the ASIC”.
“Mr Herft’s disqualification”, it adds, “took effect from 19 Dec 2019 and will continue until 18 Dec 2021”.