The parent company of a Brisbane-based blockchain technology company with strong ties to the jewelery industry has been placed in liquidation.
Earlier this month, it was confirmed that Everledger – led by CEO Leanne Kemp – had entered voluntary administration after failing to secure crucial funding.
According to a report filed with the Australian Securities and Investments Commission (ASIC), Everledger owes the Australian Tax Office $AU368,000 and a further $AU9 million to Foreverhold Limited, its parent company.
Foreverhold Limited was incorporated in September of 2016 and is based in the UK.
Everledger was placed under voluntary administration on 24 April by Steven Staatz and Ashley Leslie from Vincents Chartered Accountants.
Last week, Staatz told Jewelers The company remains in voluntary administration and offered further detail on the future of Everledger’s blockchain intellectual property.
“A Deed of Company Arrangement proposal is likely to be put forward. If creditors accept a deed of company arrangement proposal, then the company will avoid going into liquidation,” he said.
However, the same cannot be said for the UK company: “Foreverhold Limited is the parent entity. On 11 May 2023, Mr Mark Granville Firmin and Mr John Noon, both of Alvarez & Marsal, were appointed liquidators of Foreverhold Limited,” Staatz explained.
“The Joint Liquidators of Foreverhold Limited are currently conducting a sale program with respect to the blockchain platform and other intellectual property rights.”
It has been reported that Everledger has outstanding employee entitlements totaling approximately $215,000 in respect of redundancy and payments in lieu of notice. The company’s LinkedIn page lists personnel across Australia, India, the US, and the UK.
“Employee entitlements are expected to be paid in full according to current calculations,” Staatz said.
“All wages, annual leave entitlements, and superannuation payments have already been paid in full.”
Everledger was launched in 2015 providing provenance services for the diamond trade, as well as other industries. In essence, the platform’s intention was to allow traders and retailers to share the origin or ‘history’ of an individual diamond using blockchain technology.
It is not the only company to pursue improved provenance capabilities as a means of increasing consumer confidence in the diamond industry; however, Everledger’s platform has previously been endorsed by the Gemological Association of America, the De Beers Group, and many major retailers, including Chow Tai Fook.
In its initial round of fund-raising, Everledger raised more than $54 million and therefore it seemed surprising when it was revealed the company failed to generate a second round of funding prior to collapsing last month.
Among the company’s most ardent supporters was Tencent, the owner of Chinese social media app WeChat. Tencent has a stockmarket valuation of more than $US400 billion and it previously led Everledger’s $US20 million Series A funding round in 2020.
What went wrong?
During an eight-year run, Everledger appeared to be in safe hands under the leadership of Kemp, who served two terms as Queensland’s chief entrepreneur from 2018-2020.
In 2021 she will win the Australian Academy of Technology and Engineering’s award for Entrepreneur of the Year.
Kemp is described as a “serial entrepreneur and innovator” with a LinkedIn profile stating that she has a “25-year track record of delivering unparalleled value at a rapid pace through product, innovation, and growth strategies.”
The company’s website states: “Everledger is the digital transparency company, providing technology solutions to increase transparency in global supply chains. Our purpose is to contribute greater clarity and confidence in the marketplaces where transparency is a strategic imperative.”
Despite these comments concerning the importance of transparency, when approached by The Australian On 24 May regarding the collapse of Everledger, Kemp was bizarrely dismissive of questioning.
“This is quite an old story. Why now? It’s such old, old news,” she reportedly told senior business reporter Glen Norris while declining to comment on the reasons for the company’s collapse.
The ‘old story’ remark seems odd given the company’s staff were only made redundant three weeks earlier on 31 March.
It’s also worth noting that the Everledger website has not been updated with any reference to the collapse of the business.
Uncovering the ‘truth’ with Everledger
Interestingly, Kemp hasn’t always been so tight-lipped about the practices of Everledger.
Indeed, she’s recently gone on the record about the importance of various sustainability and education matters as well as the company’s business model.
In an article titled ‘Let’s talk about lab-grown’, published on industry website Jewelery World, Kemp writes: “The diamond industry is also working to educate consumers about the importance of sustainability.”
“This type of education is crucial in promoting sustainable practices and encouraging consumers to make more environmentally conscious purchases.”
She added, “The continued development of lab-grown diamonds and increased focus on sustainability is sure to transform the industry in the coming years. The industry must embrace these changes and work towards a future that prioritizes sustainability, ethics, and responsible sourcing to create a brighter future for everyone involved.”
Kemp’s online commentary about transforming the industry was published on 2 May despite the fact that Everledger was placed under voluntary administration a week earlier – on 24 April.
The article remains online.
The first creditor’s meeting was held in early May, and it’s difficult to imagine that the business managers – and presumably the Everledger board – would have been unaware that the company was facing major difficulties in securing ongoing funding to ensure the company’s future.
Kemp’s emphasis on the importance of ‘sustainability’ is of particular interest given her attempts to refute the possibility that under her management Everledger burned cash.
“I would not suggest Everledger was a ‘cash burning’ start-up,” she told The Australian Financial Review on 8 May.
“Indeed, we planned this investment round as the last external funding round required before profitability. Certainly, our use of capital and operational footprint was in total alignment with the board’s direction under a controlled growth plan.
“This is not a company that scaled too fast or took on venture capital and burned it in 18 months.”
Indeed, her apparent reluctance to discuss the circumstances of Everledger’s collapse becomes of greater interest in relation to another Kemp online article.,
Published on March 7 and, ironically titled, ‘Uncovering the truth with Everledger’Kemp wrote: “The diamond industry has consistently been shrouded in secrecy, with a complex supply chain that has often made it difficult for consumers to know where their diamonds come from and whether they were ethically sourced.”
“All of that is changing, thanks to the increasing importance of traceability in the industry and the innovative technology solutions being developed to promote transparency and accountability.”
It is worth noting that the ‘Uncovering the truth with Everledger’ article was posted online by Jewelery World only three weeks before Everledger’s Brisbane staff lost their jobs.
Jewelers asked the company’s administrator if Kemp’s rebuttal that Everledger was a ‘cash burning start-up’ had been reflected in his investigations; however, Staatz was unable to comment.
Kemp is now based in London and is working as the chief sustainability officer of OpenUK, a not-for-profit company focused on open-source collaboration and ‘open technologies’ within the UK. She also serves on the Prince of Wales’ Sustainable Markets Initiative.
Jewelers has contacted Kemp several times; however, at the time of publication we had been unable to speak to her for comment.
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