The latest tortured iteration of tech firm Zyber (ASX:ZYB) has come to a close, after the former chairman was declared bankrupt following a lawsuit with two shareholders.

George Hatzipapas, a Queensland businessman who joined the board in February 2018, resigned from the Zyber board two days before being declared bankrupt by the Federal Circuit Court Of Australia in early May.

It puts a full stop to a story that started days after the peak of the Bitcoin craze, moved into blockchain, and featured an ASX probe into $92.97 worth of jewellery bought in Las Vegas.


Dropbox to Bitcoin to blockchain

Zyber backdoor listed via a mining shell in 2016.

As a hot Canadian import, it purported to be building highly-secure file sharing software at a time when Dropbox was becoming very popular.

It still is, according to ASX statements, but has pivoted to making a blockchain version.

The company’s shares surged by over 40 per cent in late 2017 on the back of speculation it was getting into Bitcoin, and promptly sank in late January 2018 when it went through another board reshuffle.

It was then that Hatzipapas showed his hand, as companies associated with him and his wife Argiroula had been quietly building a 19.68 per cent stake in the company for months previously.

Hatzipapas began the pivot to blockchain.


Legal troubles

The latest unravelling of Zyber began with a lawsuit by two unwilling Zyber shareholders, Justin Puddick and his father John.

They’d given Hatzipapas $100,000 apiece to invest in a separate deal but that money was instead used to buy shares in Zyber and another company.

Those shares were placed into a separate company associated with Hatzipapas.

The Puddicks won their case in April last year in the NSW Supreme Court, and Justin says they will be paid out of the Hatzipapas bankruptcy proceedings.



A flurry of ASX queries began in August last year, after a $550,000 related party loan to Hatzipapas for “personal assistance” in the June quarter accounts last year left Zyber with just $33,000 in cash.

These unearthed a series of gems.

The loan was instead of paying out $150,000 in fees, although no remuneration agreement had been finalised.

Zyber couldn’t explain why the other directors approved the loan, claiming “the rational (sic) of each director signing the [loan] circular resolution is unknown” and later that “it is not possible to comment on the state of one’s mind in these circumstances”.

The ASX was not impressed by this, nor by the fact that no legal advice had been taken before making the loan.

“This exchange is but one example of the responses from ZYB that ASX considers to have been obfuscatory and unacceptable for a listed entity,” the bourse said in September.

Two months later Zyber was on the hook with the ASX again, which was still very confused by the amounts being paid to Hatzipapas, including $233,336 in accrued remuneration fees from February 2018 to September 2019, even though a remuneration agreement was yet to be signed or released to the market.

It also probed a series of expenses that included jewellery, but also $4,177.96 in cash taken out in Las Vegas, $19 on mini golf in Perth, and $104.94 on a Vancouver spa.

Zyber had $60,000 cash left at the start of this year.

It has not yet filed its half year report or latest quarterly, but according to its last update in January is still working on a blockchain-enabled file sharing service.

It still doesn’t have a sellable product but if comments made in November come true, it may do within six to 12 months.