Otago Daily Times

RipeTime liquidator probes IP allegation­s amid battle

- ANDREA FOX

AUCKLAND: A bitter fallingout between shareholde­rs of a failed technology company that owes the taxpayer at least $1 million has led to the liquidator investigat­ing allegation­s intellectu­al property and other assets may have ended up in Australia.

Horticultu­re analytics technology company RipeTime collapsed in July in a welter of infighting between directors, founders and shareholde­rs.

Administra­tornowliqu­idator Conor McElhinney, of McGrathNic­ol, said his ongoing investigat­ion into RipeTime and actions of its directors and related companies included probing allegation­s by a former director that a company registered in Australia, or other parties, might ‘‘have misappropr­iated RipeTime’s intellectu­al property and other assets’’.

The allegation­s have been made by RipeTime cofounder and director Jon Lowy. RipeTime was not trading at the time the administra­tor was called in.

The allegation­s have been ‘‘categorica­lly’’ denied by Ross Shannon, chairman of RipeTime since October 2018 and a 27.8% shareholde­r.

Mr Shannon, in a written statement to the Herald, said the allegation­s ‘‘are untrue and mischievou­s and part of a deliberate and sustained effort to disrupt the company’’.

Mr Shannon’s son, Jonathan Shannon, was chief executive of RipeTime. He owns 20.05% of the shares. The two had invested more than $2.5 million in the company since October 2016 and advanced a further $400,000, including interest, the statement said.

The Australian company was registered in Australia in April last year as Ripetime Pty Ltd. In February it was renamed Post Harvest Learning Pty Ltd.

Australian company office records show the Shannons are shareholde­rs of Post Harvest along with some other RipeTime shareholde­rs and creditors.

Ross Shannon said Post Harvest was establishe­d ‘‘to develop alternativ­e technologi­es to address the market opportunit­ies identified by RipeTime, but which RipeTime’s technologi­es had, after four years and $5 million of invested capital, proved incapable of addressing commercial­ly’’.

‘‘The technology does not infringe on any of the patents held by RipeTime. Post Harvest has provided details of its patent applicatio­n to an independen­t patent attorney, appointed by the liquidator, and will abide by his determinat­ion,’’ his statement said.

McGrathNic­ol’s final report as administra­tor said 17 unsecured creditors of RipeTime were owed $2.4 million.

This includes a claim of $1.02 million by taxpayerfu­nded government innovation agency Callaghan Innovation from grants to the company.

Mr McElhinney said he was awaiting advice from lawyers and responses from parties holding RipeTime’s assets.

He said his investigat­ion covered an allegation RipeTime funds were used to set up the Australian business.

Also under investigat­ion were all other receipts and payments made from the last capital raising in December 2018, ‘‘including allegation­s that another related party misappropr­iated funds from RipeTime’s bank account’’, he said.

The liquidator is conducting a sale process for the assets, reported by McGrathNic­ol to be worth a net $2.45 million in July.

Callaghan Innovation’s website shows in 2016 RipeTime was awarded a growth grant capped at $5 million, which was due to expire in June last year.

The company also received a project grant of $152,098, excluding GST, in 2015.

The administra­tor’s report said there had been a breakdown in the relationsh­ip between board members and shareholde­rs and with an engineerin­g firm.

There was also a dispute with a key founder of the business involved in the IP developmen­t. Mr Lowy said that was him. His employment with the company was terminated last year.

The report said the board had become ‘‘fractious’’.

Legal action between some directors was in progress when administra­tors were appointed in July.

The disputes had severely affected the company’s ability to secure required funding to complete developmen­t and commercial­isation of its technology, the report said.

Mr Lowy has said he and RipeTime cofounder Grant

Sargent were the directors embroiled in legal action with other directors.

He said the litigation was over governance issues and RipeTime’s constituti­on and shareholde­rs’ agreement.

Mr Lowy said RipeTime was founded in 2016, as ‘‘a side branch’’ of his master’s degree at AUT in 2003. It aimed to revolution­ise quality control of the global fruit supply chain.

Mr Lowy’s Mokoia Investment Group holds 4.7%. His company Salvo is a creditor. It was contracted to produce a small production run of devices and provide premises and resources for RipeTime, Mr Lowy said.

In May last year, he and Mr Sargent appointed themselves directors, as was their right, Mr Lowy said. Mr Lowy had previously been a director, from 2015 to March 2018.

Company records show RipeTime’s directors today are Mr Lowy, Mr Sargent, Jonathan Shannon, Ross Shannon and Michael Van Tinteren, who owns 6.68% of the company.

Australian company records show the principals of Post Harvest — previously registered as Ripetime Pty Ltd — as Ross Shannon, Jonathan Shannon, Mr Van Tinteren and Mitch Denton. Mr Denton is among creditors of RipeTime. — The New Zealand Herald

 ?? PHOTO: THE NEW ZEALAND
HERALD ?? RipeTime directors Jon Lowy (left) and Jonathan Shannon before the company went into liquidatio­n.
PHOTO: THE NEW ZEALAND HERALD RipeTime directors Jon Lowy (left) and Jonathan Shannon before the company went into liquidatio­n.

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