“Bills were coming in and they were just being offloaded and it lost millions and millions of dollars in the period from July 2011 to October 2011.”
This was despite Energy Watch having between 50 and 70% of the switching market by early 2012 and working exclusively with major energy providers including TRUenergy, AGL, Simply Energy and Momentum Energy.
The final blow to the company came when Polis stepped down from his role as chief executive in April 2012 after making racist and offensive remarks on his personal Facebook page.
“After Facebook happened the energy retailers stopped paying us, we had no revenue, we liquidated and sold Freedom SEO which had a turnover of $700,000 and we sold it for $5,000 just to keep paying the wages,” says Polis.
Polis says although he was “out of the business” at this time, from what he has been told during that period there were three investors including Danny Wallis who “pumped money” into the business to keep paying wages to staff.
“I stepped out of the business. Our intention was to try to raise money to pay staff to get the energy retailers to turn us back on. They turned us back on four weeks later but stopped paying us so we lost $4 million worth of revenue.”
On May 9, a business called Energy Watch International was registered by Patrick McCurry and, on May 12, Energy Watch was sold to Energy Watch International for $50,000, shortly afterwards the shell of Energy Watch entered administration.
The private consortium behind Energy Watch International was headed by Wallis although Wallis reportedly left the company last week.
“The question is ‘Has a number been done here?’ and no it hasn’t, the business had $8 million worth of liabilities. How the hell were we going to raise funds when on every TV station across Australia they were saying that Ben Polis the ex-chief executive was a racist and misogynist.
“Who’s going to buy in? We had large companies interested but there was no way any board was going to invest into it, it would wreck their own brand.”
Polis says he has no connection to Energy Watch’s new owners, “I fired Andrew [Barton] and I have not spoken to Luke [Zombor] since Facebook,” he says.
“I’ve just been to the liquidators and they say the whole thing looks ridgey didge.”
Rod Sims, chairman of the ACCC, told SmartCompany although the $1.95 million fine was unlikely to be paid, the penalty was not futile.
“Not at all, penalties are there mainly for general deterrence,” says Sims.
“The ACCC works through administrative action and through litigation, when we have litigation outcomes like this, it sends general messages about what people can and can’t do and the penalties for doing the wrong thing.
“I think it is enormously powerful when it is a $1.95 million penalty, people do take notice of that.”
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
