Daniel Andrews’ Eloque business failure with Xerox reduces equity to zero

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The Victorian government registered its holdings under a company named “ACN 646 607 883 Pty Ltd” in filings with the Australian Securities and Investments Commission.

The Australian subsidiary Eloque issued only one share when it was created in May 2021 but in October 2021 it issued another 14,000,000 shares at $1 per share.

A VicTrack spokesperson said the value of all shares had been reduced to zero.

“As part of the liquidation process, any remaining proceeds from the issuance of these shares, together with any other remaining cash, are being used to cover all liabilities, obligations and rights,” the spokesperson said, adding that any excess funds would be returned to Xerox and VicTrack.

VicTrack spent $9.85 million in 2021-22 related to technology developed by Eloque, but received no revenue from the joint venture.

U.S. parent entity Eloque also issued shares in 2021 – some 1,000 Class A preferred shares worth $10.6 million. But it suffered a net loss of $5.6 million for the year ending in December, leaving it with equity of $4.6 million, according to its annual report.

Xerox declined to say whether it would close Eloque LLC and what would happen to the shares issued by the US company. He reiterated a previous statement that he “may consider monetizing” Eloque’s technology in other ways in the future.

One of the directors of Eloque LLC, former IBM executive Kee Wong – who sits on several boards including the Australian Energy Market Operator – was also a paid consultant to the Victorian government.

Mr Wong’s consulting firm, KW Trading, was hired by VicTrack in late 2019 “to provide innovation consulting services”, the agency said.

KW Trading received $144,000 in 2020-21, according to an attachment to the railroad agency’s annual report.

Wong was also a member of VicTrack’s Strategic Innovation Advisory Group, which was established in mid-2020 to advise the agency’s board on “fostering innovation to reduce costs and open up new opportunities to generate sources of income”. The group disbanded in February 2022.

VicTrack said Mr. Wong did not receive an honorarium for serving on the board of directors of Eloque LLC, which he joined in May 2021 after his engagement with VicTrack ended. Mr. Wong did not respond to requests for comment.

Mr. Rose was not a director of the parent company’s board, but he had been a director of Eloque’s Australian subsidiary from its inception, alongside Ersin Uzun, who was then head of the business. Xerox Global Internet of Things (Mr. Uzun left Xerox in early February 2022, when he also resigned as President and Treasurer of Eloque LLC.)

Mr Rose resigned from Eloque’s Australian Board in February 2022.

Another subsidiary, Eloque USA LLC, was created in February 2022 to operate the group’s US operations, while a UK subsidiary, Eloque Limited, was created in May 2021 (Mr. Rose is listed as a director of the entity British.)

VicTrack has been led by Deputy Managing Director Chris Olds since 2021 because Mr. Campbell, who had been CEO of the agency since early 2013, spent his time running Eloque.

VicTrack was not a shareholder of any of the Eloque entities, according to the filings and the agency’s 2022 annual report.

age announced in early October that VicTrack has received legal advice on the establishment of financial and business governance arrangements to avoid conflicts of interest by persons working on the Eloque business.

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