Guest Post : Scott Phillips
Editor’s note : I am grateful to Scott for his words as an industry insider. Scott runs a successful and very cool 3D printing business : “The Robots are Coming“. For any kid (and I include myself in that description) who has ever thought that Mum or Dad should have their own superhero figurine, Scott is your man…
Tune in to this one to hear an apocryphal tale which exemplifies exactly what is missing from our national “innovation policy” – namely an effective corporate regulator.
I witnessed this situation unfold at the time, as closely as I thought was prudent and welcomed. In hindsight I’d have been in there like a hawk with an eyeglass. I attest that everything presented in this article is accurate to my knowledge. In fact, I was so close to the action here that I narrowly escaped getting my own project embroiled in this utter fiasco; Jason being the guy (some of you will have heard about) who opened his engineering workshop to me and helped me (massively) to build the MkI TRAC Scanner. Dodged a massive bullet on that one when I realised that John Conidi was not negotiating sensibly, and clearly wanted to take all of the chips on the table.
Conidi did a classic take-down of Jason and 3D Group. There were four directors, but only two ever saw the books, which were deliberately kept hidden by Conidi and his offsider Frank Pertile. Once the financial and logistic hooks were in deep, Conidi and Pertile revealed that the company’s financial position was in a confected crisis, and suggested to Jay that he needed to fix it – by signing over all of his shareholding to the company and resigning as a director. The initial offer was zero payment on the shares. We negotiated that up to $200,000, but that was still probably only about a tenth of their value, and a fraction of the price that Conidi was selling the very same shares for to his group of tame investors.
So, we told Conidi where to shove his offer. He told us that if Jason didn’t take it that he’d put the company into administration and buy the assets from the administrator. We didn’t think that he’d be able to do that, given his fiduciary duty as a director of the company to protect the interests of the shareholders, and the codified equivalents under the corporations law, but he did it anyhow. An administrator was called in and before you know it Oz Brewing, the public company that was being used by Conidi and his mates to do a backdoor listing onto the stock exchange (which is really what this whole clusterhump was all about) announced that they were in position to buy the assets of 3D Group (Jason’s printer and IP) through the bizarrely-named entity “333D Pty Ltd.”
I’m very proud of Jason, that he has had the courage of his convictions to fight this out and take it public. Many wouldn’t have had the guts. He’s spent a ton of money on overpaid lawyers, but that was never going to get him all of way. Justice, in this game, is just too expensive.
Which brings me to my point.
The mining boom is over. We now have to rely on our wit to sustain us as a nation. We are a nation of inventors. We might not be top of every category or anything like that, but we are an educated, innovative people. However, our innovation sector is a continuous train wreck, littered with the dead bodies of great projects that got screwed over by “investors”, miscreants and hangers-on. Our judicial system is so utterly useless to startup entrepreneurs that it might as well not exist, because founders usually don’t sock a few hundred grand away in case they have to fight it out in court. They either don’t have that kind of cash in the first place or they spend everything they’ve got on the “project”. When the shit hits the fan you find out that there is no government body looking out for this kind of stuff, which is so utterly corrosive to our economy. Despite all those public servants across three tiers of government, nobody seems really empowered to do anything to help an entrepreneur who is getting slowly strangled (unless it’s so flagrant that it becomes of interest to ASIC, which most don’t, and even then…).
No wonder most of us end up moving to California…