The Times reports that crowdfunding investors are considering legal action following the collapse of Emoov.
The investors in question appear to be some of the individuals who put forward almost £2m to the defunct agency when it staged its most recent crowdfund on the platform Crowdcube over the summer.
Crowdcube has reportedly received over 20 formal complaints about the Emoov pitch.
The Times says: “Investors claim that they were misled over the financial position of Emoov.”
It continues: “Before they invested, prospective backers were told that the merger [between Emoov, Tepilo and Urban in the spring] had ‘attracted an additional £6m from existing shareholders’.”
Emoov’s founder and chief executive Russell Quirk told The Times that critical funding that had not been received by Emoov - and that allegedly therefore led to its collapse last week - was separate to the £6m outlined in the crowdfunding pitch. “He said he had no reason at the time to suspect that further funds it needed would not be forthcoming” The Times says.
Last week Estate Agent Today was informed by Crowdcube that Emoov revised down its company valuation from £104m to £51.8m at the end of summer’s crowdfunding exercise. This was not illegal, Crowdcube claimed.
Quirk has now suggested that the valuation had been cut to reflect concerns about a slowdown in the property market.
But The Times says one investor, who put £5,000 into Emoov, said he felt that he had been “seriously misled”.
“The backer, who asked to remain anonymous, said: ‘It was not made clear the company was . . . at risk of failure in a matter of months if it did not immediately raise further finance’” reports the paper.
The Times also cites independent crowdfunding expert Rob Murray Brown who says: “The information given to investors here was either wrong or seriously lacking.”
A week ago today insolvency consultancy James Cowper Kreston was appointed as administrators by the directors of Emoov Limited, Tepilo Holdings Limited and Tepilo Limited.
A statement released by the consultancy said attempts to find one or more buyers for the Emoov and Tepilo businesses, ahead of administration, proved inconclusive.
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Mm I think I would be sweating a bit if I was Mr Quirk! Interesting to see what happens to the Countrywide boys when their chickens come home to roost. A few red faces I bet!
I agree with Andrew. Quirk is merely another Philip Green in the making. It's high time these con men in suits were dealt with by the law in order to deter the growing number of property scammers. It seems every man and his dog is now jumping on the crowdfunding bandwagon to make a quick buck out of a gullible public.
Purple bricks shares dropping like a stone...lost 10% so far today ahead of half-year figure out on Thursday!
Quirk is a crook, simple
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