What a mess! So Envion AG has to be liquidated due to the missing auditor´s report or appointment – what a surprise, no auditor would have been able to issue a clean audit opinion on a going concern basis on the financial statements of Envion AG given the actual situation. Evidently the former board of management of Envion MWoestmann is quite happy, but the founder evidently do not want to give the money back. So pls find enclosed the press releases done by both parties today.
Today at 11.35 Quadrat Capital GmbH (MWoestmann) did the following press release on the German Presseportal:
For your convenience and as we know that there are also a lot of english-speaking investors we did a translation:
Envion investors will get their money back as the company will be liquidated
Zug (ots) – The Cantonal Court of Zug has decided that envion AG will be dissolved due to a “lack of organs”. This is reported by the German Quadrat Capital GmbH as shareholder of envion AG. The liquidation will be carried out by the Zug Bankruptcy Office in accordance with Swiss bankruptcy law. Thus the creditors of envion AG, the approximately 37,000 ICO investors, will receive their money back. The reason for the court decision is the lack of a state-licensed auditor, which is mandatory for companies issuing a public bond according to the Swiss Code of Obligations. The original auditors of envion AG, PwC, resigned at the beginning of March after the Board of Directors discovered irregularities in the ICO. According to the court, it was not possible to find a new auditor because the founding team around Trado GmbH withheld the decisive ICO data from both the board of directors and the investigator of the Swiss financial supervisory authority FINMA. Against this background, a judicial appointment of the auditors was “not practicable, especially as it is obviously simply impossible without the documents retained by Trado GmbH”. (Zug Cantonal Court, ES 2018 317, p.5). It follows from this that the refusal of the founders to disclose the ICO data ultimately led to the liquidation of the company. According to Quadrat Capital, the repayment rate for the investors depends on whether the bankruptcy office recognises only the tokens placed in the ICO (approximately 86 million) as legitimate, or also the additional 41 million tokens created by the founders without the consent of the board of directors. In the first case, the payout ratio could be well above 90%, in the second far below 60%. Another factor for the payout is the investor money retained by the founders with a volume of up to 10 million dollars. envion AG is conducting two lawsuits for these funds, which have been continued since August on behalf of the Swiss authorities against Trado GmbH.
As a shareholder, Quadrat Capital welcomes the fact that the assets of envion AG have been almost completely preserved and are now ready for distribution to the investors. The prerequisite for this was created by the early decision of the Board of Directors, Matthias Woestmann, to exchange the crypto currencies received for US dollars. Thus the capital of the investors could be protected from the dramatic price losses of the crypto currencies.
In response to this press release the founders made another press-release only hours later:
Update from Trado GmbH: (the founder do not want that the investors get refunded)
Berlin, 26.11.2018 – According to information provided by Trado GmbH, an interested group from the envion AG environment is currently circulating a non-public decision of the Zug Cantonal Court (Switzerland) dated 14.11.2018 on the liquidation of envion AG. According to this decision, envion AG is to be liquidated because the Chairman of the Board of Directors of envion AG, Matthias Woestmann, had not remedied a shortage of organs and had not appointed a statutory auditor (Wirtschaftsprüfer) despite a prescribed extension of the deadline. The decision of the cantonal court is based on false information provided by Matthias Woestmann, Member of the Board of Directors of envion AG, who is striving for the liquidation of the company and has already disseminated false information to the detriment of the company in other matters such as the creation of tokens. The false statement on which the ruling is based is now being corrected by FINMA and the cantonal court. Michael Luckow, who represents the founding team of envion AG in the dispute against Board member Woestmann:
“We will continue to do everything in our power to oppose the liquidation of envion AG. We do not want liquidation. We have done everything in our power to prevent liquidation. A liquidation would be the work and goal of Matthias Woestmann, who could benefit from it to the detriment of the investors”.
Regarding the facts: envion AG under Chairman Matthias Woestmann suffers from a so-called shortage of organs from the very beginning. Swiss law stipulates that a public limited company like envion AG, which reaches certain thresholds, must have an auditor. Already during the ICO of envion AG, Woestmann, the board of directors, would have had to appoint such an auditor, which he had “forgotten” in his own words. Later, Woestmann justified the resulting shortage of organs with changing reasons, the last of which was that he allegedly could not find an auditor because Trado GmbH, which was involved in the preparation of the ICO of envion AG, did not provide the data necessary for the audit. Woestmann had failed to involve the founders in the discussions with the available auditor firms in order to develop an auditing process together with them, despite their request.
As a result of the putsch-like exclusion of the founders as former majority owners via a capital increase staged by Woestmann and considered unlawful by the Berlin Regional Court, it was no longer possible for the founders to contact the auditors of BDO directly in order to discuss the necessary data to be supplied.
In fact, however, Woestmann received the information he requested from Trado GmbH, which reflects the entire economic content of the ICO. It has to be taken into account that due to the large amount of data in connection with the ICO, it is by no means clear which level of detail, e.g. related to the investors, was desired for the auditors. Trado GmbH already submitted the aggregated data on the ICO to Woestmann in January/February 2018, and it is not known to what extent Woestmann then forwarded them to the auditors.
At no time was Trado GmbH informed by Woestmann that the auditors were missing any relevant information.
In particular, Woestmann did not at any time associate the auditors directly with Trado GmbH in order to clarify this. This would have been the normal procedure under such circumstances. The fact that Woestmann failed to do so only leads to the conclusion that this was intended to prevent a satisfactory clarification.
Only after the Swiss Financial Market Supervisory Authority (FINMA) opened an investigation, entrusted the law firm GHR with the investigation of envion AG and thus “disempowered” Chairman of the Board of Directors Woestmann, was it possible for Trado GmbH to exchange the level of detail of the data with the lawyers. Trado GmbH then provided the requested additional information in full. It is still unclear whether the data evaluation requested by the investigator of the GHR was sufficient for an auditor. In any case, Trado GmbH or Michael Luckow have not yet been included in the discussions with auditors. The justification of the Zug Cantonal Court is based solely on the information provided by Matthias Woestmann, who continues to claim that Trado GmbH did not provide the information. The presentation of the facts of the case in the judgment of the cantonal court is therefore wrong and is obviously based on Woestmann’s false statement of facts. It is true that Trado GmbH has provided evidence of the relevant information requested, most recently to the GHR lawyers appointed by FINMA.