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Former Guvera boss Darren Herft quizzed in court over streaming service’s collapse

The former chief executive of music streaming firm Guvera has been grilled in court as liquidators of the failed company strive to unravel the circumstances behind its demise that left shareholders out of pocket.

Former Guvera boss Darren Herft

Darren Herft, who was also the boss of private equity group AMMA which raised funds for Guvera, has been probed over his roles with both companies and about the relationship that existed between AMMA and Guvera.

In the first day of a public examination in Sydney’s Federal Court – which is expected to be adjourned today and resume in March – Herft was asked to explain the business model behind Guvera and questioned about its financial health between 2008 and 2011.

At one point, Guvera founder Claes Loberg took a seat in the public gallery before being asked to leave as he too will be questioned during the hearing.

Asked by the court why he was present, Loberg said: “I’m here to see what’s going on.”

Barrister Ben Katekar, representing administrators Deloitte, painted a picture of financial struggles for Guvera from the outset as the start-up looked to raise money from investors linked to accountancy firms who worked with AMMA.

In one P&L statement covering August and September 2010, Guvera Limited generated zero in sales while its subsidiary Guvera Australia reported sales of $98,000 and a loss of $992,000. The consolidated loss was almost $3.3m.

The loss in 2011 amounted to $10.3m and Katekar said as he questioned Herft about several financial proposals and agreements, including one for him and Loberg to hand over 500,000 shares each to one investor in exchange for a $2m investment.

The barrister also highlighted the minutes of a meeting from 2010 in which it noted “how directors were closely monitoring the company’s solvency position”.

Several times during this morning’s proceedings Herft told the court that emails and financial statements produced in isolation “could mean anything”.

He said he would need to refer to complete email chains or source other documents to give fuller and more accurate answers.

The examination continues this afternoon.

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