Moula fight heads to court and it’s all about the moolah

Moula chief executive Aris Allegos. Picture: Stuart McEvoy

Prominent investors in small business lender Moula are mounting a shareholder revolt in the NSW Supreme Court, filing papers against the company’s founders and planning to sue their billionaire financial backer.

Lawyers for Neil and Scott Sutton, of Sutton car dealership renown, lodged papers on Wednesday to sue Moula Pty Ltd and a leading shareholder, Beat Pty Ltd, an entity linked to Melbourne-based businessman Sherman Ma, who made his fortune as the executive director of Liberty Financial Group.

The court filings reveal that the Suttons are pursuing the case through their company, Enares Pty Ltd, with the pair having been locked in a battle with the Moula board for months to try to stop attempts at demerging the business at Ma’s insistence.

Businessman Sherman Ma’s Beat Pty Ltd has been named in the lawsuit.

Margin Call has already documented much of this infighting, which began when Ma allegedly threatened to cut off Moula’s ­financing and run the business into the ground if it was not split into two entities – the more prominent of which he would control.

The demerger has since been placed on ice, according to a note issued in July by Moula’s co-founder, Aris Allegos, in which he said a “material deterioration in market conditions” and shifting investor sentiment had halted the plan. Put plainly, a capital raising attempt to fund the split was forecast to be a total failure. There were also threats to sue over the matter, and these ­appear to now be in fruition.

But that doesn’t mean Ma was completely unsuccessful in his ambitions for control. Allegos announced in the same note that Moula would name Gavin Slater, one of Ma’s lieutenants from Liberty Financial Group, as the company’s newly appointed CEO.

Oh, yes, and the Moula board would be reconstituted to place Slater and Ma at the table, alongside a representative of the founding management team. As far as stealthy takeovers go, it wasn’t a bad play.

Apparently, Ma has been releasing just enough funds to keep Moula operational for the moment, although the small matter of a legal stoush hardly bodes well for the company’s health, especially when its ongoing financing is at stake.

Allegos did not respond to a request for comment and Liberty Financial declined as well. The matter is set to be first mentioned on November 21.

Dodging a bullet

Ged Kearney should be thankful for small mercies. The Assistant Health Minister and her unionist partner, Leigh Hubbard, have completely dodged a bullet over the unfolding ransomware attack engulfing Medibank Private.

On Wednesday deputy Liberal leader Sussan Ley and Home Affairs Minister Clare O’Neil both revealed themselves to be premium holders with the under-siege company. Also a customer is Prime Minister Anthony Albanese.

“I am incredibly worried,” Ley said of the unfolding privacy crisis. “It’s not fine for people to know details of your sexual health, of your mental health, and to have that information weaponised against you by actors who have such ill will.”

Assistant Minister for Health and Aged Care, Ged Kearney.

Readers might recall that Kearney was one of several members of the newly formed Albanese government who copped flak over shareholdings in CSL and Cochlear that contravened the updated ministerial code of conduct.

Hubbard’s shares in Medibank were a particular fly in the ointment given the potential conflict of interest with Kearney’s health and ageing portfolios.

Fortuitously, the couple flogged their individual shareholdings mere weeks ago, meaning they have avoided any exposure to Medibank’s disastrous fall in share price.

The company’s shares have cratered about 22 per cent in the wake of the scandal, slashing more than $2bn from the market capitalisation of the Mike Wilkins-chaired group.

 

Doing his Block

Nine boss Mike Sneesby might want to invite Melbourne tech millionaire Danny Wallis to the broadcaster’s courtside seats at the 2023 Australian Open, now that the eccentric businessman is pretty much supporting the viability of the media group’s residential property development arm.

Sneesby has about $22m worth of bricks and mortar on his books via Nine’s MICJOY Pty Ltd vehicle, comprising two homes worth $8m-plus that remain unsold from the most recent season of The Block, and another $14.3m he spent earlier this year on five homes in Melbourne’s Hampton East. They’re slated to debut in the next season.

Wallis has spent about $34m on eight homes from the show in recent years, including three on the weekend in the Macedon Ranges.

For that sort of investment, and given the way the property market is looking into the medium term, perhaps Sneesby ought to get Wallis along to both the women’s and men’s grand slam event finals. Or at least a reserved seat at Nine’s annual meeting in Sydney on Thursday.

But it should be said that The Block has not been Wallis’s only pathway into real estate investment.

Beyond the three Macedon Ranges homes – all yet to settle – his portfolio in Melbourne extends to 16 pieces of real estate, with most of these piles in the Bayside suburbs. They’re all basically debt-free and, taken together, would be worth well in excess of $50m.

Given that Nine shares are down more than 30 per cent for the year, it might be time to consider further forays into the sturdy realm of real estate.