Torrid times in the West last week as the managing partner of Pitcher Partners WA was grilled in a Supreme Court witness box at the behest of a rival liquidator.
The occasion was the public examination of directors and others linked to the 2018 failure of Titan Interactive Pty Ltd, which in recent times has gone by the name ACN 116 313 921 Pty Ltd.
The PE is being conducted by Jennifer Low of Sheridans Chartered Accountants, who’s obtained funding for the PE from the FEG Recovery Unit and is eyeing what she has described in reports to creditors as a strong case for insolvent trading.
That view is perhaps not shared by Pitcher Partners WA managing partner Bryan Hughes, who is the brother of Titan’s founder Wayne Hughes, was a director of Titan between 2014 and 2018, was the referrer to Low of Titan initially as a voluntary administration (VA) and who is presumably capable of satisfying a judgment debt flowing from any insolvent trading finding, which of course is by no means certain.
Reports filtering back from the West indicate that first examinee Bryan Hughes and Low’s barrister Wayne Zappia clashed repeatedly over two days of rigorous examination around what he knew of Titan’s financial affairs both during his tenure as a director and in the years prior to coming on board.
In questioning Hughes about a proposed $1 million capital raising Zappia referred to an email Hughes sent to tech investor Tony Grist in April 2014 in which Hughes said “We have already locked away $650,000 of the $1 million wish to raise now”.
But Zappia told the court that Low’s investigations showed only $358,000 was raised in 2014 and asked Hughes to define what he had meant in the email by “locked away”.
The Pitchers boss responded by saying “locked away” meant commitments from potential investors.
When Zappia asked whether “locked away” meant money in the bank Hughes replied: “Definitely not.
The friction between Zappia and Hughes continued when the topic turned to Titan’s habit of waiting for research and development rebates to be received from the tax office before it would then satisfy its GST and employee income tax obligations.
When Hughes explained that in respect of those tax-related matters he relied on advice from Ernst & Young, Zappia suggested he was “blindly reliant”.
Hughes told Zappia he was being “inflammatory and unhelpful”.
Moments later an exasperated Zappia told he Hughes he was being “incredibly evasive”, which prompted Hughes to suggest that perhaps the questions were “too vague.”
The two day allocation of examinations concluded with Zappia’s questioning of Hughes incomplete.
Dates for the resumption of the examinations of Hughes and others are yet to be set.
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