Kestelman running low on oxygen supply

Cartoon: Peter Nicholson.

It might not be a dodo just yet but it appears all isn’t quite going to plan at Larry Kestelman’s VC firm Oxygen Ventures.

Kestelman, the former owner of internet service provider Dodo Australia, started Oxygen in a blaze of publicity a year ago, vowing fill a gap in the Aussie venture capital landscape.

It’s been running start-up pitching competitions, allowing entrepreneurs to pitch for up to $5 million in angel funding.

Oxygen then took a stake of between 40 per cent and 75 per cent in the start-up firm.

But the whisper in the industry now is that the firm has struggled to get traction and is about to embark on a big change of direction after its tactics reportedly caused disquiet in the sector. Some unkind souls have even wondered — no doubt incorrectly — whether some of its contests were real or whether some of the results were simply preordained. A number of other venture capital firms have also chosen not to invest alongside Oxygen in new start-ups.

Kestelman, who made $150m selling his stake in Dodo, is one of the owners of Melbourne United basketball club.

Lew puts the boot in

Here’s how you do a stocktake, Solomon Lew style.

The billionaire rag trader is still locked in a Big Apple battle with shoe merchant and convicted fraudster Steve Madden (Margin Call, June 16).

At issue is Lew’s decision to shutter the Australian franchise, which he owned, last year after allegedly discovering Madden was overcharging him for shoes.

As part of a bid to have some of Madden’s claims in New York’s Supreme Court chucked, Lew has filed detailed corro showing how his and Madden’s lawyers negotiated the shutdown.

In June Lew’s lawyer, Sam Bond, told Madden’s lawyer, Daniel Hargraves, that the Aussie shops would be shut down by the end of the next month and “our client will provide you with its inventory lists by no later than 7 August”.

This was agreed to and after the last shop closed Hargraves wrote back asking for the promised inventory.

“We advise that our client has disposed of all relevant stock and therefore no inventory listing will be provided,” Bond responded.

It’s hard to imagine this satisfied Hargraves but sadly his response is not (yet) before the court.

Rinehart lets rip

Great to see Angry of Singapore — aka Gina Rinehart — reach for the keyboard yesterday after three of her companies copped criminal convictions (and $130,000 in fines) at the hands of Greg Medcraft’s ASIC for failing to lodge their accounts on time.

While the blast sent from her Hancock Prospecting was unsigned, its slightly tortured syntax, use of rhetorical questions and gratuitous mention of “record debt” marked it as one of Gina’s finest efforts.

There was also a reference to Hancock having paid all its tax — puzzling, as the case had nothing at all to do with tax.

It’s all good PR for Medcraft and co, who after enduring plenty of scorn for failing to prosecute non-filers have a high quality scalp to wave around.

There’ll be plenty to come: ASIC has eight prosecutions on foot, 28 more potential prosecutions and is probing another 14 cases.

But Rinehart makes one very telling point: why is it that some companies must lodge while others the same size do not?

Turns out the non-lodgers are members of an exclusive club, which includes Lindsay Fox’s Linfox and Harry Triguboff’s Meriton Apartments, that were grandfathered under a rule brought in back in 1986 which no government since has been game to repeal.

Blue Sky’s Viking flush

It’s a regular game of thrones at Blue Sky Private Equity, which has dumped its stake in portaloo group Viking Hire to Bayfront Capital Management.

Blue Sky wouldn’t lift the lid and say how much paper it would collect but appeared flushed with success yesterday, saying it delivered for investors.

With Viking wiped from its books it’ll no doubt be looking for fresh deals.

Escape Hatch

Found: Fairfax flack Brad Hatch, just as missing posters were to go up around the media company’s Darling Island HQ.

He had been incommunicado since Thursday, when Fairfax exec Antony Catalano was found guilty of drink driving. Calls went unanswered for days. Thankfully he’s fine, popping up yesterday to assure he’d be in contact if he had anything to say.

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