All eyes on Energy Watch Mark II

REGULATORS have raised questions about the reborn Energy Watch after an investor emerged with the bulk of the assets, leaving the old broking business in the hands of administrators.

By InvestSMART · 26 May 2012

By InvestSMART ·
26 May 2012

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REGULATORS have raised questions about the reborn Energy Watch after an investor emerged with the bulk of the assets, leaving the old broking business in the hands of administrators.

Private investors have pumped millions of dollars into a new business called Energy Watch International, leaving existing financial and legal problems in the shell of the old company.

This puts at risk attempts to recoup superannuation and redundancy payments for former staff, although the new owners say staff are more likely to receive money than if Energy Watch had been left to fail.

And the Australian Competition and Consumer Commission, which recently won a case against Energy Watch and former chief executive Ben Polis for false and misleading advertising, now needs the court's permission to pursue penalties.

The barrister for the ACCC, Daniel Star, yesterday said the watchdog did not yet know if the new company was "100 per cent bona fide" or a tactic to avoid penalties.

Energy Watch had been stumbling towards liquidation after offensive comments by Mr Polis were made public in early April. IT entrepeneur Danny Wallis emerged last week as the head of a private consortium taking over the company under a new name.

"It would have gone into liquidation had we not pumped money into it in the two-week period," he said.

"We have put millions of dollars into this whole structure. A large percentage of that money is going to the administrators to pay out staff claims . . . At this point in time I cannot guarantee that [staff] will get all their entitlements."

Administrators Lawler Draper Dillon did not return calls. A creditors' meeting is due to be held on Tuesday.

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Frequently Asked Questions about this Article…

What happened to Energy Watch and why is it being called a reborn company?

According to the article, private investors bought the bulk of Energy Watch’s assets and relaunched the business as Energy Watch International, while the old broking business remains in the hands of administrators.

Who is leading the new Energy Watch International and how was the takeover funded?

The article names IT entrepreneur Danny Wallis as the head of a private consortium that took over the company. He says private investors pumped millions of dollars into the new structure to keep it from going into liquidation.

Are former staff likely to get their superannuation and redundancy payments after the takeover?

The article states that attempts to recoup superannuation and redundancy payments are at risk, but the new owners say staff are more likely to receive money than if the company had been left to fail. Danny Wallis also said a large percentage of the invested funds is being paid to administrators to cover staff claims, though he cannot guarantee staff will get all entitlements.

What role is the ACCC playing in the Energy Watch situation?

The Australian Competition and Consumer Commission (ACCC) recently won a case against Energy Watch and former CEO Ben Polis for false and misleading advertising. The article says the ACCC now needs the court’s permission to pursue penalties related to that case.

Does the new Energy Watch International avoid the penalties from the ACCC case?

The article reports uncertainty: the ACCC’s barrister said it is not yet known whether the new company is '100 per cent bona fide' or a tactic to avoid penalties. The watchdog still needs court permission to pursue penalties, so avoidance has not been confirmed.

Why was Energy Watch close to liquidation before the private takeover?

The article says Energy Watch was stumbling towards liquidation after offensive comments by former CEO Ben Polis were made public in early April, which contributed to the company’s financial trouble.

When is the creditors' meeting for Energy Watch and what do we know about the administrators?

The article states a creditors' meeting is due to be held on Tuesday. It also notes that the administrators, Lawler Draper Dillon, did not return calls, and no further details about the meeting were provided in the article.

How much money did investors put into the rebooted Energy Watch?

The article repeatedly refers to 'millions of dollars' being injected by private investors to fund the new Energy Watch International and to pay administrators for staff claims, but it does not provide a specific dollar figure.