Clarke Willmott recovers compensation for POWA Technologies investors
We successfully acted on behalf of a number of Italian corporate investors and high net worth individuals in a claim for damages arising from a complex investment transaction. The investment concerned shares in POWA Technologies Group plc (“POWA Technologies”); a high-profile electronic payment services company which collapsed into administration in 2016.
POWA Technologies was heralded as a UK tech unicorn in 2013 by David Cameron, the UK’s then prime minister, and attracted substantial international investment. Following the company’s acquisition of Hong Kong based MPayMe Group and its ZNAP technology in June 2014, POWA Technologies was said by its chairman, Dan Wagner, to have an enterprise value of $2.6 billion.
In 2015 POWA Technologies announced that it was planning a £1.6 billion IPO on the London Stock Exchange. A ten year deal with China UnionPay was subsequently announced by Wagner with great fanfare, who described the deal as having “limitless potential” and went on to state to the BBC that “we’ve trumped ApplePay and the rest of the world here”.
However, POWA Technologies’ business collapsed in early 2016 and it was placed in administration on 19 February 2016. The claims made by POWA Technologies’ management proved to be quite illusory. Most of POWA Technologies’ contracts had been nothing more than non-binding letters of intent at best, including the much vaunted China UnionPay deal. The cash burn up rate at the business was catastrophic with £147 million being spent between 2013 and 2016.
The reports issued by POWA Technologies’ administrators paints a picture of a business that was totally out of control. Our law firm’s clients are to date one of the few groups to make a substantial recovery of their investment monies following POWA Technologies’ collapse.
A claim for breach of contract was brought against Alessandro Gadotti, the chairman of MPayMe Group and CEO of POWA Technologies’ PowaTag division, on a personal basis. The claim was settled at mediation in London with Gadotti agreeing to repay the Investors substantial compensation as a consequence of the failed investment.
The long running claim also involved litigation in the Chancery Division of the High Court in London including applications for stop notices and stop orders against MPayMe Partners and POWA Technologies to prevent any unlawful dealing in the securities which were in dispute. The stop order contained a penal notice and was obtained shortly before POWA Technologies was placed into administration.