Fishwick grilled in court over Ambient Advertising collapse

Arvind Hickman
By Arvind Hickman | 20 December 2016
 

A former director of collapsed outdoor ad agency Ambient Advertising, Mark Fishwick, has fronted a public examination over events leading up to the liquidation of the business in 2014.

Fishwick was cross-examined about allegations Ambient Advertising had overcharged clients, how he was remunerated, loan activity and the alleged transfer of business between Ambient Advertising and Revolution 360, an ad agency that he formed after Ambient Advertising became insolvent.

Barrister Steven Golledge, representing the special purpose liquidator, spent the majority of the day asking Fishwick about discrepancies between the units of media space that media agencies booked and what was delivered by the agency. This referred specifically to street posters production and placement.

Fishwick, a director, was responsible for sales and marketing at the business. He answered almost every question exercising his right to 'privilege', which means his answers cannot be used in any subsequent trial.

The court heard several cases where the number of units on a booking contract (aka client purchase order), defined by Fishwick as “media space”, didn’t match Ambient Advertising’s media contract (supplier purchase order).

The examples presented to the hearing involved Carat, MediaCom, MEC and Ikon Communications, affecting clients including the AFL, Swinbourne University, Wagon Wheels, Applehead Cider and Diesel.

Allegations of order 'trimming'

In one case involving Swinbourne University and Carat, 1,000 posters were ordered by Carat for production and placement over a two-week burst from the 1 August 2010.

In the booking contract under production, it stated that Carat would send across the creative for four different posters for 1,000 units to be produced.

However, the purchase order that was sent to supplier Foot Traffic Media only asked for the placement and production of 900 units over two weeks, with 225 units per poster design.

When Golledge asked why there was a discrepancy between what was ordered and delivered, Fishwick told the hearing: “We are delivering 1,000 units of media space whereby we’ll decide whether we need to print 1,000 posters or not, it depends on the site listing, which I do not have in front of me.”

Fishwick explained that it was Ambient’s common practice to only print the number of posters that were required to fill the media space units as some posters could carry over for more than one week.

If, for example, the same poster was placed on a site for two weeks it would count as two units.

This could also take into account the effects of weather, with more posters added to the order if the company thought it would rain and fewer if the weather was likely to be good.

When asked whether media agencies should pay for posters that were ordered but not printed in production costs, Fishwick reiterated that Ambient’s contractual commitment was on delivering media space units.

As far as Fishwick was aware, the client would be told a campaign had been fulfilled without mention of reductions in production costs.

Management fees and loans

The public examination moved onto management fees and investment decisions that saw money exit Ambient Advertising for ventures backed by Fishwick and fellow director Milan Bozic.

Fishwick explained that he was not employed by Ambient Advertising and was under service provisions arrangement his family trust CityBay.

He was also a director of another related company Wazfor and Vizoo, which was established to acquire holographic technology from Sweden.

There was another company he set up called Mousetrap, which was a “washroom advertising business”.

Fishwick said he never sent invoices to Ambient Advertising for payment, which he admitted in hindsight he should have done.

Fishwick and Bozic both received monthly management fees of $10,000 in the early days of Ambient Advertising.

Golledge asked Fishwick about a $265,355 loan that Ambient Advertising made to another company he set up, Titan Media Group.

Fishwick explained this was a loan to TMG to “build ad structures in the carparks of shopping centres in New Zealand”.

The loan was made by Ambient without any loan agreement document outlining commercial terms.

“It was assumed that Titan would repay those loans at a time it was in a position to do so,” Fishwick told the court.

This never occurred as Titan Media Group failed to cover costs and the business was offloaded.

Another outstanding Ambient Advertising liability of $1.15 million was queried. Fishwick explained it was a loan to Titan NZ.

Revolution 360

Fishwick admitted that several staff from Ambient Advertising were re-employed by Revolution 360 but couldn’t recall if Revolution 360 staff had courted Ambient Advertising clients to transfer business across prior to its liquidation.

These included his son Michael Fishwick, Jonathon Kouvelis, Elly Piperias and Jamie Tulich.

When asked if Revolution 360 staff had sent emails to clients that suggested business would carry on as normal but with a new name, Fishwick said he “can’t recall” and “that is factually incorrect”.

“Revolution 360 is a total different business to Ambient Advertising,” Fishwick told the court.

An email shown to AdNews dates 27 November 2013, indicates that Revolution 360 did reach out to Ambient Advertising stakeholders informing them of the changes.

The email was headlined ‘Ambient Advertising Transitions to Revolution 360’ and has a Revolution 360 banner at the top.

In the body, it states: “After 12 years as Ambient Advertising, the Ambient Group’s not just changing it’s (sic) name, we are changing our outlook with additional new services and a merger of new partners.

“The team will remain the same with the addition of some new names, in new roles with new insights and creative dreams.”

The email encourages people to call Revolution 360 on the “usual numbers”.

The letter signed by Mark Fishwick, Jonathon Kouvelis, Michael FIshwick and Nigel Ruffell.

Fishwick told the court that Revolution 360 had retained the same phone number as Ambient Advertising and that it was located in an office in Sydney in Jones Bay Wharf, which the special liquidator’s legal team asked if it neighboured the old Ambient Advertising office.

Fishwick's wife Linda was also called to the box to answer questions about what she knew of her husbands pay arrangements and loans to various related parties.

She told the hearing she was a director of CityBay, which she descibed as the family trust, but was not aware of payments received by Ambient Advertising into the trust, or several loans made from the trust to Ambient and related parties.

The only time she was aware of money leaving CityBay was when a loan was made to Ambient Advertising after, she alleged, "Milan Bozic stole a lot of money from the business" and this was picked up by the bank.

"We had to do the moral think and pay staff wages...it was an incredibly stressful time," she said.

A second session of the public examination will take place on 21 April 2017.

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