Aussie tech and media start-up collapses into liquidation, all staff lose jobs

A flailing tech start-up has collapsed into liquidation and all staff have been terminated on the spot via an email message.

EXCLUSIVE

A flailing tech start-up has collapsed into liquidation and all staff have been terminated on the spot via an email message.

On Tuesday, the Victorian Supreme Court ordered E-Mersion Media (Aust) Pty Ltd into liquidation “on the grounds of insolvency”.

The State Revenue Office had initiated winding up proceedings against the business over unpaid debts, and three employees also tried to join the case as supporting creditors due to outstanding wages.

Registrar Kim Woronzcak ordered that the business be placed into liquidation.

The Melbourne company was built around the premise of digitising traditional print magazines and had entered into contracts with FIFA and F1. Its parent company had attracted $12 million in investment.

E-Mersion Media (Aust), the employing arm of the group, owes more than $13 million to creditors but some of those amounts are disputed.

Just a few days earlier, staff were informed that their employment was over, effective immediately, via email.

One staff member, Abigail*, who spoke on condition of anonymity, told news.com.au: “I’m looking for work but there’s not a lot of jobs going.”

The termination letter staff received.

E-Mersion Media has now gone into liquidation.

Staff at the tech and media business had already been stood down after the business went into administration last month.

On Friday, the appointed administrator, Mathew Gollant of restructuring firm CJG Advisory, wrote to workers letting them know E-Mersion Media could no longer keep them employed.

“I note that you were stood down during the voluntary administration process, however, given the above, I regrettably advise that your employment is terminated effective 3 May 2024,” the letter, obtained by news.com.au, reads.

“You may be aware that the Department of Employment and Workplace Relations has a scheme called Fair Entitlement Guarantee (“FEG”) to pay employees who have become redundant as a result of the insolvency of their employer and do not receive payment of these entitlements.”

Mr Gollant encouraged staff to apply to the government scheme. He also noted that unfortunately the scheme does not cover unpaid superannuation.

At the hearing the following Tuesday, he was appointed liquidator of the defunct entity.

Abigail said she had feared the company was on the brink of collapse for a while.

“It’s incredibly stressful, you’re waiting for the penny to drop constantly. You’ve always got this low level anxiety.”

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E-Mersion Media has copped criticism over its expenses in Dubai.

A photo of a standard villa room in the Doha hotel which was hired out.

E-Mersion Media’s tax debt stands at $1.1 million while the company’s accountants are owed $23,000. Meanwhile, the parent company, E-Mersion Media, claims it is owed $11.4 million, which makes up the bulk of the debt.

Five staff members have also submitted claims for unpaid entitlements ranging from $2000 to $23,000.

The administrator also pointed out in the meeting there were some disputed debts. Four additional staff members claim they are owed money ranging from $17,000 to over $100,000.

Another business also claims to be owed $179,000.

These are all in dispute.

In response to the fact that the employing arm has gone bust, the company’s sole director, John Iliopoulos, told news.com.au: “No one has more to lose in this than the parent company, the shareholders which obviously includes my family interest.

“I have and will continue to fight to try and save.”

Half of E-Mersion Media’s workforce had quit by June last year amid claims staff were owed wages, which has been denied by the company. The number of staff had dwindled from 16 employees to just eight midway through last year.

The business also copped criticism after an internal report claimed E-Mersion Media spent more than $1 million on travel expenses over the past three years, including around $168,000 for a year-long stay at a luxury villa in Doha.

The report, obtained by news.com.au, stated that “more than $1 million has been spent on travel expenses over the past three years, including “businesses (sic) class airfares, luxury accommodation, fine dining, alcohol, spas and balinese (sic) massages”.

In response, at the time, Mr Iliopoulos said: “It’s just part of our business. We’re an Australian company, all our contracts are based overseas.

“It would have been way more expensive to book individual hotels for a month. It did work out cheaper to book it (the villa) for the year. We continued to negotiate deals in Qatar, I don’t think it was a waste of money.”

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Originally published as Aussie tech and media start-up collapses into liquidation, all staff lose jobs