Powerhouse writes off another investment after alleged irregularities
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Powerhouse Ventures has written off the value of yet another investee, this time after finding alleged accounting and legal “irregularities” that indicate intellectual property has been transferred out of the company.
The founders of SolarBright, Pat and Nicola Martin, quit last week from their positions as CEO and managing director respectively.
But in an announcement to the market on Monday, Powerhouse (ASX:PVL) said it’s now found potential problems with SolarBright’s records with the New Zealand Companies Office and Intellectual Property Office of New Zealand, saying some of the irregularities took place in the last month.
“The Powerhouse Board considers that the rights of SolarBright to recover its assets remain intact and full recovery is expected, with the timing of this retrieval unclear.”
Powerhouse is investigating the irregularities.
The tech investor is worried that the latest news will kill appetite for a buyout of SolarBright’s intellectual property (IP).
It said that sales of the IP or licences could only be considered “once SolarBright’s legal title is perfected”.
As a result, it’s has written a 30 per cent investment in the company down to nothing. It didn’t say how much the write down was, but said it would have a $500,000 impact on it portfolio.
It’s hoping that it can recover loans made to SolarBright, as they’re higher ranked than other liabilities.
Powerhouse normally tries to take majority ownership of an investee.
This is the second catastrophe involving a business it has agreed to take a minority investment in.
Powerhouse had to write off a $7 million investment last year in turbine-maker Hydroworks and then take a $10 million loss on its full year accounts, after it failed to gain full oversight over the company’s processes and accounts when it ran into problems.
Powerhouse shares were up 2.3 per cent by midday on Monday to 22c.