Gold Coast social media shopping startup Konvo subject to ASIC strike-off action

A Gold Coast social media startup, which Mayor Tom Tate invested in, is on hold and the company is subject to strike-off by ASIC.

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A GOLD Coast social media startup, counting Mayor Tom Tate and a high-profile developer’s sister among investors, is on hold and subject to strike-off action by the corporate regulator.

ASIC could not provide a reason for its proposed deregistration of Konvo Limited, which launched with great fanfare as a social shopping enterprise in 2015.

Founders said a “clerical error” was to blame for the proposed strike-off and that they were still actively seeking funding.

The unlisted public company has not released public financial records since 2018, when it was after $5 million towards its lofty goals of taking on Facebook.

As well as the Mayor, investors include property developer Azzam Hassan and Ivana Badalotti, sister of long-time tower developer Roberto Badalotti.

According to Konvo’s offer document, Ms Badalotti has the largest shareholding, with 40.1 million of the 100.3 million issued shares, which had a combined value of $1.5 million.

The company also sold shares online, with its listing at crowdfunding.com.au registering $121,929 in investments.

Konvo founders Davide De Vincentiis and Nicholas Reid. Picture: Nigel Hallett.

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Companies linked to Konvo founders Davide DiVincentiis, a nephew of Roberto Badalotti, and Nicholas Reid each held 24.5 million shares, according to the offer document.

The proposed deregistration was published by ASIC on December 15, meaning the company could be struck off as early as February 15 if it doesn’t satisfy the regulator’s concerns.

A joint statement from the founders said the company was “debt free” and its operations were “on hold” awaiting more shareholder funds.

“The past year and the effects of COVID have delayed plans for Konvo and many local small businesses,” the statement said.

“As a result, consideration is being given to changing the status of the company from public to private to conserve expenses and reassess the company’s forward strategies.

“While the company’s operations are currently on hold, pending the injection of new shareholder capital, the management team are refining plans, taking into consideration the effects of COVID in the retail landscape.”

Cr Tate’s stake in Konvo is listed on his public register of interests, however it does not specify the value of his holding and his name does not appear on Konvo documentation.

The Mayor declined to comment on his investment in Konvo.

Gold Coast Mayor Tom Tate. Picture: Steve Holland

The company has been linked to controversial trading scheme Contracard, which has operated from Southport under various names, including Contrabart, for more than 20 years.

Konvo’s most recent public financial report, for the 2018 financial year, details cash equivalents of $1.05 million “consisting of Contrabart Trade Dollars”.

Its auditor wrote “we are unable to accurately, and with certainty, confirm the equivalent Australian dollar currency value of the Contrabart Trade Dollars”.

Barry Lipscombe

The statement from Konvo’s founders said they too were unable to ascertain the value of the trade dollars, whose spruikers claim are worth the equivalent of an Australian dollar.

Former Contrabart director Barry Lipscombe is now director of Contracard, also a Southport trade exchange company, and is linked to Contracoin, a cryptocurrency operation.

Contrabart and its associated companies have been the subject of multiple successful court actions by members whose goods were bought using Contrabart dollars, which they were then unable to spend on items they were promised.

Mr Badalotti and Cr Tate have both been members of the Contrabart trade exchange.

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