Former Guvera CEO Darren Herft slapped with 2-year ASIC ban
Darren Herft, one time CEO of failed Australian streaming service Guvera, has been banned from managing an Australian corporation for two years.
This followed the collapse of four companies within the Guvera set-up, in June 2017.
A statement from the Australian Securities And Investments Commission (ASIC) came into effect on December 19, 2019.
Outlining that various Guvera companies failed to meet their statutory obligations, the regulator went on to additionally assert that Queensland-based Herft also “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.
“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.”
Darren Herft & Claes Loberg
Guvera, which Herft co-founded in 2008 on the Gold Coast with Claes Loberg, epitomised both the expectations and harsh realities of the digital music boom of ten years ago.
Initially funded by AMMA Private Investment out of Australia, Guvera raised about $50 million from 1000 investors mostly of accounting firms and other financial services businesses. Over the next four years, it raised up to $180 million.
Guvera was at the forefront of music streaming but, like many, had problems on how to monetise the potential or create a proper structure.
It set up operations in the US with an office in New York. But its entry into the UK market through the acquisition of Tesco’s Blinkbox Music in January 2015 was a failure.
Blinkbox ran out of money and was put into administration, and its employees sued, receiving £3.5 million in compensation.
Guvera’s June 20016 bid for an IPO in Australia was rejected by the Australian Securities Exchange which questioned its claims in its prospectus.
As a result, the company was forced to close down in Australia and shifted its focus on emerging music markets as India and Indonesia before ceasing operations entirely.
A federal investigation of Guvera began in late June 2017 and six months later Herft (who stepped down as CEO in January 2018) was questioned in federal court about the company’s failure.
ASIC says the seven failed companies of which Herft was a director were Guvera Australia (in liquidation), Guvera Operations (in liquidation), Guv Services (in liquidation), Professional IPO Management (deregistered), KwikTV (in liquidation), The Product People (in liquidation) and WWP Accounting Group (deregistered).
ASIC was also interested in Herft’s company AMMA, which charged 10% commission and of which he was executive chairman.