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Government documents obtained by <i>Jeweller</i> show that despite being aware that Leanne Kemp had previously faced personal bankruptcy, Palaszczuk not only agreed to the appointment to the Office of the Chief Entrepreneur position - she also approved an extension to her tenure.
Government documents obtained by Jeweller show that despite being aware that Leanne Kemp had previously faced personal bankruptcy, Palaszczuk not only agreed to the appointment to the Office of the Chief Entrepreneur position - she also approved an extension to her tenure.

Everledger collapse places Queensland Government in firing line, CEO faced bankruptcy in 2004

The former Queensland Chief Entrepreneur, whose companies collapsed in April with debts totalling $10 million had previously faced personal bankruptcy proceedings.

Leanne Kemp, CEO Everledger, a Brisbane-based blockchain technology company that focuses on the international jewellery industry, was appointed to the Office of the Chief Entrepreneur position in 2018 by Queensland Premier Annastacia Palaszczuk.

Palaszczuk has served as Queensland’s Premier since 2015.

A government media release at the time placed emphasis on Kemp being female and reads: “Premier Annastacia Palaszczuk said Leanne Kemp has more than 20 years’ experience in the tech world and knows first-hand how to forge a very successful career as an entrepreneur.”

In a statement titled, ‘Female digital pioneer named Queensland’s Chief Entrepreneur’, Palaszczuk went on to say, “In just three years Leanne built her company up into a global power player with offices in five countries, including her largest tech workforce right here in Brisbane.”

In an interview with JCK Online, Kemp claimed that the withdrawal of funding and financial support by other shareholders is a breach of a legal agreement; however, she has not explained why or how that occurred.
In an interview with JCK Online, Kemp claimed that the withdrawal of funding and financial support by other shareholders is a breach of a legal agreement; however, she has not explained why or how that occurred.

She added: “Her company [Everledger] raised more than $10 million in venture capital earlier this year and now employs 72 people - women in key technical roles and managerial positions.”

At the same time the Queensland Government saw fit to extend Kemp's position for a further 12 months, Everledger's losses were quickly approaching $AU4 million.

The financial trajectory of the company would not change in the following years - and in fact, worsened - to the extent that Everledger was placed under voluntary administration on 24 April.

According to a report filed with the Australian Securities Investments Commission (ASIC), under Kemp’s management, the company incurred debts totalling $AU9,844,294.

The UK parent company, Foreverhold Limited, of which Kemp is a director, was placed in liquidation on 11 May.

The Everledger administrator, Steven Staatz from Vincents Chartered Accountants, said in his report to ASIC that Everledger’s profit and loss revealed that, since 2018, it had not produced sufficient revenue to cover its expenses.

Indeed, the report indicates that since she was appointed Chief Entrepreneur, Kemp’s company appears to have survived on government grants.

During her tenure, Everledger had losses of around $AU5.2 million (2018 $AU1.2 million, 2019 $AU2.7 million, 2020 $AU1.2 million).

Revelations

It has now come to light that it is not the first time Kemp - who describes herself as a ‘serial entrepreneur' - has faced financial difficulty.

Government documents obtained by Jeweller show that despite being aware that Kemp had previously faced personal bankruptcy, Palaszczuk not only agreed to the appointment - she also approved an extension to her tenure. 

Kemp’s initial term as Chief Entrepreneur was due to expire in October 2019 and Palaszczuk agreed to an extension to 31 December 2020.

A document titled, ‘Queensland Chief Entrepreneur October 2018-19’, indicates that the Government undertook due diligence on Kemp’s suitability for the position, and it highlighted: “Ms Kemp had a listing on the National Personal Insolvency Index (NPII) but the attempt to bankrupt her was dismissed in 2004.”

Government documents obtained by Jeweller show that despite being aware that Kemp had previously faced personal bankruptcy, Palaszczuk not only agreed to the appointment - she also approved an extension to her tenure.

The NPII is a publicly available record about individuals who have been subject to proceedings under the Bankruptcy Act.

Intriguingly, the reasons for the legal case and Kemp’s listing on the NPII have been redacted from government documents twice - on the initial appointment and the term extension - with the notation: “Access refused under section 47(3)(b) of the RTI Act”.

The redaction is, supposedly, because the disclosure of the information “would, on balance, be contrary to the public interest”.

At the time of publication, Jeweller was attempting to obtain details of the legal case behind Kemp’s potential bankruptcy and her listing on the NPII. She was also contacted on 13 June seeking clarification; however, Kemp had not responded.

Background reading: Uncovering the financial truth with Everledger

It is therefore unclear whether Kemp had declared the legal proceedings to Everledger’s initial investors when she raised $US10.4 million dollars in 2018, and/or when she raised a further $US20 million Series A funding round in 2020.

That funding was supported by Tencent, $US400 billion tech giant and the owner of Chinese social media app WeChat.

The administrator pointed out that Everledger’s bank balance amounted to $15,000 and the company did not own any intellectual property rights.

Government draws criticism 

The Palaszczuk government established the Advance Queensland initiative shortly after being elected in 2015, with the flagship Office of the Chief Entrepreneur launched in 2016.

According to coverage by The Courier Mail on 3 June, the annual ‘State of Australian Startup Funding’ report has revealed just eight per cent of the country’s venture capital was raised in Queensland last year.

“Queensland’s slice of start-up investment cash has crumbled to less than 10 per cent of Australia’s total, despite the Palaszczuk government pouring more than $750 million into programs and touting its high-profile Office of the Chief Entrepreneur,” the report states.

“The high-profile, unpaid position has become somewhat contentious, with two of the state’s five chiefs linked to failed companies."
The Courier Mail

“It’s a far cry from a 2017 report which saw Queensland’s share above 20 per cent, with the intervening six years seeing multiple Queensland Chief Entrepreneurs cycle through and millions of dollars doled out through the government’s flagship Advance Queensland initiative.”

The Chief Entrepreneur is expected to showcase Queensland start-up and entrepreneurial talent to local, national, and international audiences.

The article highlights that Kemp is not the only high-profile person connected to the position that has been involved in corporate collapses: “The high-profile, unpaid position has become somewhat contentious, with two of the state’s five chiefs linked to failed companies,” the report continues.

“Most recently former chief entrepreneur Leanne Kemp’s tech business Everledger failed after racking up millions of dollars in losses, with an administrator claiming it only survived by relying on government hand-outs.”

Mark Sowerby, a former Chief Entrepreneur, founded Blue Sky Alternative Investments, which was valued at more than $AU1 billion at its peak before it collapsed in 2019.

Kemp’s deafening silence

Despite the near $AU10 million loss and the increase of the company’s negative net assets year-on-year from 31 December 2018 onwards, Kemp attributes the collapse of her company solely to decisions made by other people.

In an interview with JCK Online, she claims that the withdrawal of funding and financial support by other shareholders is a breach of a legal agreement; however, she has not explained why or how that occurred.

"While she has not been forthcoming about the investors' reasons for withdrawing support, Kemp has remained highly vocal on matters of transparency and ethics in the international jewellery industry."

Jeweller previously sought clarification from Kemp on 9 June, asking if investors withdrew from the second-round funding because they had no confidence in the company’s management or because they had no confidence in the future success of the business model – or both.

She has remained silent despite multiple requests for comment.

That said, while she has not been forthcoming about the investors' reasons for withdrawing support, Kemp has remained highly vocal on matters of transparency and ethics in the international jewellery industry.

She has continued to author numerous articles since the collapse of her two companies, none of which have mentioned the circumstances of Everledger’s demise.

Her many social media accounts including Linkedin and Twitter, nor the official company website, record the collapse of Everledger or its parent entity, Foreverhold.

Further, as recently as two weeks ago Kemp was once again lecturing on a need for greater transparency and improved ethics in the international jewellery industry at JCK Las Vegas, six weeks after her company’s $AU10 million loss became public.

The company's future remains up in the air after a second creditors meeting was postponed to 28 June.

 

‘Queensland Chief Entrepreneur October 2018-19’

Queensland Government Department of Innovation, Tourism Industry Development and the Commonwealth Games
Chief Entrepreneur
Term Extension 31 December 2019

In December of 2019, the Queensland Government published documents relating to the appointment and extension of Leanne Kemp’s tenure at the Office of the Chief Entreprenuer. The documents reveal that Kemp faced bankruptcy proceedings in 2004; however, further details have been redacted



 

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