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Posted on June 1, 2018 by staff

Matt Newing hits back in Vibe Tickets row

Matt Newing hits back in Vibe Tickets row

Newing says "red herrings" and "spin" have been put out by other parties involved
Newing says "red herrings" and "spin" have been put out by other parties involved

Investor Matt Newing has hit back after losing £600,000 following the decision to put Vibe Tickets into administration .

Other than a handful of comments on LinkedIn, the boss of Elite Telecom hasn’t spoken publicly after Luke Massie bought Vibe Tickets out of administration on April 30.

In an exclusive interview, 25-year-old Massie said he was “backed into a corner” and rubbished claims it was planned as “ridiculous”.

He said due to a “very restrictive” shareholder agreement that was in place, the existing backers refused to provide any additional funds until new legal documents were drawn up to give them equal rights on the board.

As a result of the administration process, Newing and Elite Telecom, Vela Technologies Plc and Scott Fletcher lost £600,000, £400,000 and approximately £500,000 respectively.

Both Vela Technologies and Fletcher have agreed to invest in the new business.

Newing has vowed not to invest another penny buts says he’s decided to speak out now to put his side of the story forward.

The 43-year-old confirmed to BusinessCloud that he tried to buy Vibe Tickets out of administration but lost out to Massie, and claimed “red herrings” and “spin” had been put out there in the light of the very public fallout.

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Recounting what happened he said things came to a crunch when Massie called an emergency board meeting, during which he asked investors to inject £150,000 into the business to keep it afloat while a £1.6m funding round with the then current shareholders and investors was closed.

Newing said: “Of this, I had committed £75k – which, as mentioned before, was almost double what my pro rata shareholding would have equated to (I had circa 20 per cent).

“This was on the table right up until the moment Cowgills were brought in by the directors which they had no option to do given the subsequent unwillingness of Luke or other investors (Fletcher/Vela) to similarly commit. It would have only taken a further £75k to keep everything going.

“I made an offer of £150,000 (to buy the business out of administration). If accepted, this would have seen all creditors including HMRC adequately covered.”

→ OPINION: VIBE TICKETS – WHAT WENT WRONG?

The administrator’s report claimed Massie originally tried to buy the business back for £30,000 but eventually succeeded with an increased offer of £160,000, enabling him and the other shareholders to “enjoy the spoils for themselves” despite the fact that £75k would have kept the business afloat.

Newing said claims that the legal  structure was hindering further investment was a “smokescreen”  and said Massie’s (pictured below) announcement that he was giving away shares in his new company to his original crowd investors did “nothing to compensate the many other small investors who had backed Luke and the business from as far as back as June 2016”.

Luke Massie

Newing added: “At the insistence of Luke,  Fletcher and Vela, we all agreed in October 2017 to make the giving of investor consents as streamlined as possible so that Alex Cliffe, the ‘investor director’ could give or withhold consent quickly on behalf of the investors. 

“However – and this is the other red herring – there had not been a single occasion when Luke or the management had to approach any of the investors for their consent (or ask Alex to give it on their behalf as investor director) which is evidence in itself of both just how much scope Luke and the management had within the legal documents to get on and run the business.

“We were all just pretty happy and relaxed about letting him just get on and do what he needed to do. I, and I suspect others, were far too busy to be interested in the minutiae of what the team was doing on the ground on a day-to-day basis. 

“Whilst this could have been grounds in itself to possibly have more stringent legal documents, by any measure – and despite everything that has been said – the legal docs were as simple and vanilla as anyone in Luke’s position could have reasonably expected to achieve. 

“The third red herring is all this talk about how the current legal docs were deterring other external/institutional investors from coming on board. Absolutely rubbish! That simply isn’t what happens in the real world.

“We pointed out that no new institutional investor would ever be expected to adhere to the current legal documents. That just isn’t how these things work or how lawyers operate. Instead, they would have produced their own house style/standard template equity documents setting out the basis upon which they were prepared to invest.

“In such an eventuality, it had always been appreciated by me and others who invested alongside me that the current equity documents i.e. shareholders’ agreement and articles of association, would have been binned had we been successful in securing an institutional investor.

“Vela, Fletcher and Massie all knew this but still they continued to talk about the barriers presented by the current legal documents. 

“Forget me and my position, small shareholders are key to funding new businesses and start-ups so should be treated with respect.”

→ OPINION: VIBE TICKETS FOUNDER VOWS TO PROTECT CROWD

Fletcher publicly backed Massie in a post on LinkedIn in the wake of the first story: “I was a large investor in Vibe and continue to back Luke,” he wrote.” “I can say with 100 per cent certainty this wasn’t Luke’s fault other than being naive when he was just 20 and signing up to ridiculous terms via an investment agreement.”

In an earlier interview with BusinessCloud, Massie said: “The fact that some people think I planned this to rip people off… that’s what I think has hurt the most.

“I honestly believe that in this world the only thing you have is your name… and to have that publicly questioned when no one knew what went on and no one had the facts. One person even mentioned that I am young and naïve. What’s age got to do with this? At the end of the day, I’ve probably brought in a lot more investment to the region than many other people have.”

Massie said he resorted to borrowing and selling personal assets – including Bitcoin – to help foot the bill.

“I had 24 hours to try and find the cash – I wasn’t willing to give up on it,” he said previously, insisting that the move secured 22 jobs.

Massie said Vela Technologies Plc and Scott Fletcher have both agreed to inject £200,000 and £500,000 respectively in the new business – and that he’s close to closing a new investment round.

Following Newing’s latest claims, Massie issued the following statement: “Clearly Matt and I have very different interpretations of events that led to the administration. I disagree entirely with his claims but I don’t have the time or the inclination to re-tread old ground.

“One thing I’m sure we can agree on is that it was a disappointing outcome for all involved. I’m comfortable in how I’ve behaved throughout. I’ve worked hard to protect Vibe’s original crowd investors in the only way I could, given the circumstances.

“I’m looking ahead with a renewed focus and even stronger belief in what Vibe stands for and what it’s capable of. The shift in recent weeks in Vibe’s marketplace is too significant to ignore and demands my full attention. Now really is our time.”

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