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Guvera CEO dismisses India concerns despite litany of woes

Guvera chief executive, Claes Loberg, has rejected suggestions its Indian business is in turmoil, arguing he has set about transforming the operation and is getting “everything into a working fashion”.

The flamboyant head of the floundering business rejected claims that Guvera Music India was $5m in debt, owed millions to music labels or was operating without correct governance or compliance in India.

Guvera founder and Interim CEO Claes Loberg to relocate to India and Indonesia

Guvera founder and interim CEO, Claes Loberg, plans to relocate to split time between India and Indonesia

“This past fortnight has been a wild personal journey inside every facet of this business and market,” said Loberg, in an email to Mumbrella. “The personal support from shareholders, team and clients is keeping me going.”

But it is unlikely to cut any ice with creditors, former members of staff or shareholders who have seen the business lurch from crisis to crisis.

One creditor said the decision to approve a Deed of Company Arrangement (DOCA) at a creditor’s meeting on Monday – which effectively allowed the company to keep trading – was made reluctantly.

Far from being a vote of confidence in Loberg, or the company as a whole, it was merely the lesser of two evils.

“Administrators said the DOCA would provide greater certainty of a return than winding the company up,” he said.

Loberg’s comments came after a leaked document sent to Mumbrella portrayed Guvera’s Indian operation – proclaimed by the music streaming firm as a ‘key market’ – as being on its knees.

An April/May board update detailed a division losing cash, generating next-to-no revenue, unable to pay its bills and struggling to make its ad-funded model work. It also outlined a number of compliance and governance problems, including issues surrounding payroll and tax.

Among the partners and suppliers owed money are mobile commerce and marketing firm Affle, digital entertainment company Hungama Music, and Reliance IMG, which brokered a deal that saw Guvera become the “official music streaming firm” for the Mumbai Indians, a cricket team playing in the Indian Premier League (IPL).

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“Any compliance issues we have, have emerged as a result of funding in the last two months. I am working to re-stabalise this with new investment at present, both with AMMA and new partners,” Loberg said.

“I have also been advised from other press reports of Guvera not having a legal entity, bank accounts or board in India – this is completely incorrect. Guvera does have a legal entity in India, bank accounts and local board.”

He described reports that it is $5m in debt, owed millions owed to music labels in India, and was having issues with its business model as “incorrect”.

Loberg also rejected it had set revenue targets in India of $20m, and said any previous targets had been set by previous chief executive Darren Herft, who left the role last month, although he remains on the Guvera board.

Darren_Herft - Guvera

Former Guvera CEO Darren Herft

“Those revenue targets are incorrect, any previous targets were from [the] previous CEO,” he said. “Under my direction the company has yet to release forecasts.

“We are negotiating new music contracts as we do every year, and they will include advances,” he went on. “I have been in the role of CEO for 10 days [and] I am in discussions with creditors and arranging personal meetings with partners.”

He added “many brands” have gone live on its Indian platform in the past two months, including Tata Motors, Reliance, Closeup, Udio, Harley-Davidson, Vodafone and Myntra.

“In the past 45 days, and under my first 10 days as CEO, I have been working to get on top of all matters and get everything into a working fashion as quickly as possible in all our current territories.

“I am happy to announce that our efforts in adapting our company and product to market have resulted in immediate upturn in revenue projections and I will be making announcements within the next 30 days.”

He said he was bringing in both “international and local expertise” to bolster the business.

Guvera-logo-1

“As part of my turn-around plan, I have executives from New York and Los Angeles that have joined me in Indonesia over the past two weeks and worked with me on adding new local hires to the team as well as structuring entire product shift and focus as a platform,” he said.

“Our head of sales from Australia is joining me next week in India, and together with our local team from UAE and India we will duplicate this past fortnight’s success in those markets.”

Loberg claimed Guvera retains a “good on-going relationship with Reliance”.

“Yes we have worked together on a media project with Reliance and Mumbai Indians. Nothing is in jeopardy. We had the media partnership and the season has finished,” he said.

“We are in further discussions and I will be meeting with them and other partners in India.”

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