News

Former boss of collapsed ad firm asked if he relied on ‘insufficiently vigilant’ agencies to make money

The former director of defunct out of home advertising firm Ambient Advertising has rejected claims his company “trimmed” the number of street posters it was contracted to produce but said there was an accepted industry process of “managing the inventory”.

Mark Fishwick

Quizzed for a second time at Sydney’s Supreme Court about the business practices and ultimate collapse of Ambient Advertising in late 2013, Mark Fishwick rejected suggestions his company deliberately tricked customers and reduced orders in order obtain a better return.

And he denied his firm relied on “insufficiently vigilant” agencies which failed to check whether contracts had been honoured. On the contrary, Fishwick claimed Ambient went “out of its way” to show it had delivered on agreements.

Fishwick is being investigated amid allegations that Ambient Advertising, which collapsed at the end of 2013, may have failed to deliver contracted services relating to outdoor poster advertising and overcharged clients as a result.

The investigation has been led by special purposes liquidator Nicholas Crouch, who was appointed by the Supreme Court in August 2015. Crouch is also exploring a number of financial transactions between Ambient and several entities controlled by Fishwick, along with the creation of his current operation, Revolution 360, which emerged at the end of 2013 when Ambient was in financial strife.

The hearing, described as an examination, was a continuation of proceedings adjourned from December during which Fishwick argued that Ambient was a media company required to deliver the required number of “units”, which he insisted related to media placements rather than a specific number of posters.

In addition to the continuing examination of Fishwick, former Ambient operations manager Amy Crowley was subpoenaed by Crouch, with barrister Steven Golledge probing emails in which Crowley suggested an order for 300 posters over a four week period for the Greens in 2013 did not contain sufficient margin.

The order had been made with its key supplier, Foot Traffic Media, the largest unrelated creditor whose director, Mike Akers, has helped fund the examination into the collapse of Ambient.

In the email produced in court, Crowley queried whether the number of posters should be cut to 225 or 250 posters.

Asked by Golledge whether that was the “proposed solution” to the problem of poor margins, Crowley replied “that would appear so”, adding she would have sought advice from Fishwick and other members of staff. It was not a decision she would have made without consulting senior staff, Crowley said.

“So it’s not that there were not enough spaces [for 300 posters]. It was just they were too expensive. Was that common?”, asked Golledge.

“I can’t recall,” she replied.

Earlier, Crowley told the court if an order had been received for 700 units for a two week campaign, it did not mean 700 posters needed to be produced as some would stay up for the two-week period.

The amount of posters produced depended on issues such as the weather, which may damage posters, and vandalism, she said.

Later, asked about the same campaign – for the Greens – Fishwick said he could not recall any specific instructions to reduce a campaign based on margin. But he said he could recall the campaign itself as Ambient undertook a site inspection with the agency.

“We showed them all the sites and they were very happy. I don’t believe there was any reduction here,” Fishwick said.

“Possibly one of the things I would have said is that we’ll take the lower margin. Who knows?”

Golledge countered by asking: “Does this whole business work on an artificial margin that is created on the basis that agencies never investigate whether the amount of media space booked is supplied?

“Is this how this company made its profit? Have you relied on the fact that agencies were insufficiently vigilant to ensure the number of media units booked were actually supplied?”

Fishwick described Golledge’s comments as “very strange”, and said Ambient “always delivered the amount of units” and went “out of our way to prove that to our clients either by post reports or by site inspections”.

Asked if he had any doubt that agencies were aware that Ambient could procure a lower number of posters than specified in the booking contract, Fishwick said: “As I have said before, the responsibility of Ambient is to deliver the amount of media units and to the best of my recollection we always did that, if not over achieve by leaving posters up for extended periods of time.

“From the point of view of the clients they are interested in receiving the number of units over a period of time.”

Fishwick was also asked about a one-week campaign which required Ambient to place 2200 units across several state capitals in the week beginning October 14 2012. Yet only 850 posters has been ordered meaning the client “could not possibly have received the benefit of 2200 media spaces”, said Golledge.

Fishwick responded: “That’s a lot of posters in one day so I’m saying that wouldn’t have occurred. For posters of that quantity they certainly couldn’t be done in one day, they would be done over a period of time. So that one week period would have stretched into the next week or week after.”

Golledge argued that the contract specified a one-week campaign, and contested that the client, Paramount, could not have been supplied with 2200 units.

Fishwick told the court that he became aware in 2006/07 after conversation with Mike Akers at Foot Traffic Media that street posters tend to be erected every second week, not weekly.

“It’s a little difficult for me to sit here today and accept I have been accused of trimming numbers when it is clear that it’s the process of the industry and Mike at FTM that posters are not posted every week and has a roll on for the second week.”

Golledge said: “So your evidence is that what I have described as trimming is common practice in the industry?”

Fishwick replied: “It is not common practice at all, it’s a process of managing the inventory to produce the number of units over the period of time.”

Earlier in proceedings, Fishwick was quizzed over a series of transactions, including the payment of management fees, between City Bay – a trust account held by the Fishwick family which he said was his sole bank account – Ambient Advertising and a number of other entities including Titan Media New Zealand, Vi Zoo, Wazfor, Venice Media and Ambient Rail.

The court heard that Ambient Rail, went under in late 2013 after APN terminated a licensing agreement. Golledge, referring to documents showing Ambient Rail owed Ambient Advertising $295,378, asked Fishwick to explain how, in records obtained from MYOB, Ambient Advertising was continuing to pay money to, or on behalf of Ambient Rail in the early months of 2014.

As Ambient Rail had already ceased trading, the transactions threw doubt over the validity of the documents, Fishwick responded.

Golledge also produced accounts suggesting Ambient Advertising had paid sums to APN in March 2014, despite Ambient no longer servicing clients at that time.

Fishwick said he could not explain the payments.

He also said it “doesn’t make sense to me either” when asked by Golledge about money paid to Ambient Rail by Ambient Advertising in February 2014.

“There was little or no prospect that the monies would have been recovered from Ambient Rail given its financial circumstances, would you agree?,” asked Golledge.

“I’d need to get some advice from Wellington’s (accountants). It doesn’t make sense to me either,” replied Fishwick.

Fishwick confirmed that he had control of Ambient Advertising’s bank accounts after claiming in the examination that his former business partner, Milan Bozic, has defrauded the business with the two directors parting company in 2013. Bozic has strenuously denied the allegations.

ADVERTISEMENT

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing