A powerful board of directors including two senior public servants breached their legal obligations while managing Victoria’s multimillion-dollar investment in the failed start-up Eloque, in a sign of dysfunctional governance six months before the joint venture folded.
Eloque shut down in August, just 16 months after the Andrews government announced the partnership with US printing giant Xerox and backed it with a commitment of up to $82.5 million. Directors have committed an offence under the Corporations Act and can be fined $4400 if they do not pass such a vote within two months of their set review date, which was December 15 for HoldCo.
At the time of the breach, VicTrack chief executive Campbell Rose was serving as HoldCo’s secretary, which means he was responsible for ensuring it complied with its ASIC reporting obligations. Sydney University corporate law professor Jason Harris said that, while he could not comment specifically on HoldCo, monitoring a company’s solvency and reporting to ASIC were two of a director’s most important obligations.
Asked about Eloque on Tuesday, Allan said its technology was “proven to be successful” and that the venture only fell over when it tried to commercialise it.
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