Serious problems at Purple Lounge

[vinylweatherman]

Nevada are keener on fit and proper persons checks than the UKGC but as this is a software supplier to Ladbrokes that will soon have a UK licence they will likely need a software license themselves. Someone should put in a complaint, this man should not be let near any punter's money.

I would be more worried about the ethos behind Media Corp, which was "pile 'em high, some will fail, but enough will succeed". Purple Lounge was one that failed. The problem is that this transfers all the risk to the customer, as the best thing for the customer would be to work with the concept that "all will eventually succeed", which of course means taking fewer risks with customers' funds, but at the expense of more modest, but stable, returns for investors.
This new venture seems to be enjoying "explosive growth", which suggests the ethos behind it is again "high risk, high reward for success", but failure doesn't really hurt the owners and directors because of the "Limited Liability" basis of company law.

If they DO fail, all those prepaid cards will be rendered worthless overnight, as the money on them is not protected in the way that bank deposits and savings are. This has happened REPEATEDLY in the retail industry, with the Farepak scandal being a particularly high profile example of the complete lack of protection such products offer to customers. The gift cards associated with a number of bust retailers have been rendered worthless due to them going bust. Even when they have been "rescued" by new owners to continue trading, customers are told that their old gift cards are still worthless.

 

[Richas]

I would be more worried about the ethos behind Media Corp, which was "pile 'em high, some will fail, but enough will succeed". Purple Lounge was one that failed. The problem is that this transfers all the risk to the customer, as the best thing for the customer would be to work with the concept that "all will eventually succeed", which of course means taking fewer risks with customers' funds, but at the expense of more modest, but stable, returns for investors.
This new venture seems to be enjoying "explosive growth", which suggests the ethos behind it is again "high risk, high reward for success", but failure doesn't really hurt the owners and directors because of the "Limited Liability" basis of company law.

If they DO fail, all those prepaid cards will be rendered worthless overnight, as the money on them is not protected in the way that bank deposits and savings are. This has happened REPEATEDLY in the retail industry, with the Farepak scandal being a particularly high profile example of the complete lack of protection such products offer to customers. The gift cards associated with a number of bust retailers have been rendered worthless due to them going bust. Even when they have been "rescued" by new owners to continue trading, customers are told that their old gift cards are still worthless.

The UKGC LCCP consultation has a chunk of stuff about payment methods. Its not an area I claim any specialist knowledge of. Do you think that this outfit would be permitted under this UKGC proposal?

Payment methods

7.50 As part of overall appropriate financial management, it is important that gambling operators use payment service providers that provide an appropriate standard of customer protection, controls against money laundering and so on that are set by theFCA. Experience over the past few years has suggested that payment processing can present a risk to the licensing objectives and to anti-money laundering controls.

7.51 We therefore propose a new licence condition which would restrict remote gambling operators to the use of payment processors that are authorised to do so under the Payment Services Regulations 2009 (‘the Regulations’). The Regulations make it a criminal offence for a person to provide such a service in the UK, or purport to do so, unless they are:
• an authorised payment institution or small payment institution (as defined in the 2009 Regulations);
• an European Economic Area (EEA) authorised payment institution;
• a credit institution authorised in the UK or exercising EEA rights;
• an electronic money institution which is registered in the UK as an authorised electronic money institution or small electronic money institution or is an EEA authorised electronic money institution exercising passport rights;
• the Post Office Limited;
• the Bank of England or a European central bank or national central bank of an EEA state other than the UK;
• a government department or local authority; or
• a person who is exempt under the provisions of Regulation 3 of the 2009 Regulations (credit Unions, municipal banks and the National Savings Bank.)

7.52 A ‘payment service’ is defined in the 2009 Regulations as including the execution of certain types of payment transaction, including those executed through a payment card or similar device. A ‘payment transaction’ is defined as an act (initiated by either the payer or the payee) of placing, transferring or withdrawing funds, irrespective of any underlying obligation between the payer and the payee. And ‘funds’ includes electronic money.

7.53 Very broadly, the criteria for authorisation as an electronic money or payment institution involve being a body corporate registered in the UK, minimum capital requirements and satisfying the FCA that there are in place sufficiently robust governance arrangements, that owners and managers are fit and proper persons and that there are sufficient procedures in place for safeguarding service users funds. All of these entities must comply with the conduct of business requirements set out in the Regulations on an ongoing basis.

7.54 The Regulations allow for passporting of an authorised payment institution. An institution which intends to exercise its passport rights for the first time in a particular EEA state must give the FCA a notice of its intention in such form as the FCA may require. The FCA must then inform the host state’s competent authority of the payment institution’s details. Regulation 24 governs the registration of an EEA branch, registration of which may be refused if (taking into account any information received from the host state’s competent authority) there are reasonable grounds to suspect a risk of money laundering.

If they do qualify I may need to add something to my submission explaining why they should not.....

 

[vinylweatherman]

The UKGC LCCP consultation has a chunk of stuff about payment methods. Its not an area I claim any specialist knowledge of. Do you think that this outfit would be permitted under this UKGC proposal?



If they do qualify I may need to add something to my submission explaining why they should not.....

It would depend on whether their cards are "gift cards", or stores of money on behalf of customers. I would perhaps consider the position of UKash, and whether or not customers' money is protected once in the form of vouchers. It seems not, as if for some reason a voucher proves to be worthless, it seems it's the customer that loses out, rather than Ukash being obligated to provide a refund.

The more recent liquidations of Zavvy and HMV, long after the Farepak scandal, again showed that the pre paid gift cards did NOT protect the money that had been stored on them, and the monetary values of said cards died with the retailer.

At best, the UKGC could ban the acceptance of such gift card payment methods for casinos, which will discourage players from loading them up with the intention of using them as a store of gambling money. This would of course put a dent into the prospects for this company. It would still fail to protect those who use the prepaid cards for other purposes. What is needed is general legislation to protect consumers' money held on all kinds of prepaid cards, gift cards, or any other scheme where money is exchanged for stored credit to be used at a later date with a specified subset of retailers. There were calls for this after Farepak, but it didn't happen.

7.51 We therefore propose a new licence condition which would restrict remote gambling operators to the use of payment processors that are authorised to do so under the Payment Services Regulations 2009 (‘the Regulations’). The Regulations make it a criminal offence for a person to provide such a service in the UK, or purport to do so, unless they are:

The deciding factor would be whether the Payment Services Regulations 2009 would permit the authorisation of a service where clients' funds could vanish if the provider went bust.

 

[Richas]

The deciding factor would be whether the Payment Services Regulations 2009 would permit the authorisation of a service where clients' funds could vanish if the provider went bust.

Having had a look they don't look safe to me. Adequate capitalisation and other such stuff but no real segregation.

Do you think it is worth saying in the consultation that UK sites should not take these pre payment gift card type arrangements? In practice they would not be a big UK thing as they cost more than a debit/credit card. In the Uk they offer some confidentiality at most, they are popular because of other countries blocks on financial transaction which is not really a UK problem.

I also don't know how to define what is a potential risk to players apart from that this firm is run by people who in my view should never be allowed to run a company again, never mind one in the same sector as Purple Lounge.

I share your concerns re gift cards, farepak et al BTW.

 

[vinylweatherman]

Having had a look they don't look safe to me. Adequate capitalisation and other such stuff but no real segregation.

Do you think it is worth saying in the consultation that UK sites should not take these pre payment gift card type arrangements? In practice they would not be a big UK thing as they cost more than a debit/credit card. In the Uk they offer some confidentiality at most, they are popular because of other countries blocks on financial transaction which is not really a UK problem.

I also don't know how to define what is a potential risk to players apart from that this firm is run by people who in my view should never be allowed to run a company again, never mind one in the same sector as Purple Lounge.

I share your concerns re gift cards, farepak et al BTW.

Whilst many banks don't have to specifically segregate funds, users are protected by the Finanacial Compensation Scheme, which means the government underwrites the risk of their regulatory regime not being enough to protect customers' funds. The problem with the other payment solutions, including Neteller, is that this scheme does NOT apply, therefore there is nothing other than how well the company manages it's finances to protect customers. When EWX went down, customers DID lose funds, and this was a CANADIAN, not a US, company, so UIGEA did not apply to it outside of it's US activities, yet non US EWX customers also lost all their money.

Neteller almost went under due to it's high exposure to the US market, and there was nothing to protect even the non US customers. Fortunately, the company just about had enough capital to weather the storm, refund (most) US customers, and carry on with it's non US business.

UKash is widely used within and outside of the online gambling industry, so it's the protection of funds here that matters when it comes to deciding whether these proposals are enough to protect players' funds when in transit between their banks/wallets and the casinos.

My understanding is that when buying a UKash voucher, it's like buying a gift card. The money is held by the provider until the gift card is used in a shop, at which point the shop gets it's money from the provider. However, if the provider has gone under, the shop isn't going to accept the gift card as they have no way of getting the money. With Ukash, the shop takes the voucher, and UKash redeems it for payment. If Ukash has gone under though, the shop will not accept the voucher unless there is a guarantee of it getting the money from a protected pool unaffected by the failure of the company. If shops don't accept the vouchers, the customer has essentially lost their money and will have to queue along with all the other creditors, and possibly receive nothing in the end.

 

[dandan]

never EVER one a thing at purple lounge!!!!

 

[jetset]

The Weather Lottery has also had its ups and downs, and one has to wonder if that has not influenced this brand change to Boxhill.

 

[$97 All in.]

Another company where ex Media Corp FD Nilesh Jagatia is involved as Chief Finance Officer heading down the shitter after discovering "a number of financial irregularities within the African subsidiaries and these are currently being investigated by external consultants."

Interesting that City wunderkid, financial media-go-to darling & pizza boy Luke Johnson ran out the door "with immediate effect, due to other work commitments" on 18.10.2013, 4 days earlier.

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Clear Leisure Plc Temporary Suspension of ORH Operations
Date : 22/10/2013 @ 07:00
Source : UK Regulatory (RNS & others)
Stock : Clear Leisure (CLP)
Quote : 1.65 -1.25 (-43.10%) @ 09:17
HOME » LSE » LSE » Clear Leisure share price

Clear Leisure Plc Temporary Suspension of ORH Operations

22 October 2013

Clear Leisure Plc ((LDN: CLP)

("Clear Leisure" or "the Company")

Temporary Suspension of ORH Operations

The Board of Clear Leisure (AIM: CLP), announces that its 73.43% owned travel operator subsidiary, ORH SpA ("ORH" or "the hotel group"), has temporarily suspended operations due to a number of factors affecting its African hotel subsidiaries and the wider hotel group.

The suspension follows the recent terrorist attack in Kenya and the killing of French and Italian tourists in Madagascar which, combined with lower demand and the subsequent fall in the selling price of holidays due to continuous deterioration of the Italian economy and reduction in consumer spending, has left the hotel group under a high level of financial pressure. Therefore, this direct action has been taken to reduce any financial risk to the shareholders of Clear Leisure.

ORH's heavy financial commitment in terms of pre-booked charter flight seats and the cost of running the five hotels has affected the hotel chain as a whole. Subsequently, this has highlighted to the new management team, which was appointed in July 2013, a number of financial irregularities within the African subsidiaries and these are currently being investigated by external consultants. The Company will inform its shareholders of progress in regards to the above in due course.

For further information please contact:

Clear Leisure Plc +39 02 4795 1642
Alfredo Villa, CEO and Interim Chairman
Westhouse Securities (Nominated Adviser) +44 (0) 20 7601 6100
Antonio Bossi / Ian Napier
Leander (Financial PR) +44 (0) 7795 168 157
Christian Taylor-Wilkinson

About Clear Leisure Plc

Clear Leisure Plc (AIM: CLP) is an AIM listed investment company pursuing a dynamic strategy to create a comprehensive portfolio of companies primarily encompassing the leisure and real estate sectors mainly in Italy but also other European countries. The Company may be either a passive or active investor and Clear Leisure's investment rationale ranges from acquiring minority positions with strategic influence through to larger controlling positions. For further information, please visit, www.clearleisure.com

This information is provided by Business Wire

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TIDMCLP

18 October 2013

Clear Leisure Plc

("Clear Leisure" or "the Company")

Directorate Change

The Board of Clear Leisure (AIM: CLP), the Italian leisure company and travel operator, announces the resignation of Luke Johnson as non-Executive Chairman with immediate effect, due to other work commitments.

The board wishes to thank Luke for his invaluable help over the past 12 months and we wish him well with his other business activities.

Alfredo Villa, Chief Executive of the Company will become Interim Chairman until a replacement is appointed.

 

[specialK]

Hi, beside gambling, I've been trading with GDMFX for almost a month and so far its bringing great return.
U guys can go to their website and get more info...

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Forex is like gambling, isn't it?

 

[vinylweatherman]

Another damn spammer.

Same post on 5 different threads. Probably an affiliate tag cloaked somewhere in that link, or worse....

 

[questa]

Dunno if anyone still cares, but Media Corp have been wound up as a business

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[Dinahnana]

Dunno if anyone still cares, but Media Corp have been wound up as a business

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I am not sure but I think this has something to do with insolvency. I did get an email this morning from a player advocate group so it looks like things are moving ahead. We will see what happens

 

[questa]

Yes it is insolvency. I'm not sure how much can be reported of the reasons, but yes they are bust and gone.

As you say though, the saga isn't over yet by any means....

 

[pokeraddict]

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You may not be aware that Media Corporation Plc has formally admitted that THEY owe you the funds held in your former Purple Lounge player account which have to date been denied to you. A meeting is being held in London tomorrow (2nd May 2014) at 11.30am at which it is intended to pass a vote, which if successful, will mean you will not be able to pursue Media Corporation Plc for full return of your funds.

Can anyone confirm this? I at least wanted to pass it on.

 

[Dinahnana]

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Can anyone confirm this? I at least wanted to pass it on.

Yes as far as I know it's true. I think the meeting has been adjourned to May 8th. The name of the group acting on the players behalf is called The Players Claim Group. They are looking for as many players that have lost funds to give their support. You can contact them through playerclaimplounge@gmail.com.
As far as I can tell they think the more people involved in their claim the more power they have in influencing how the liquidation goes through ultimately getting some of our money back. A lot of the documents are public record. I guess I am in this group and happy to be as long as they don't ask me for any money Worst case players get squat (which is old news and what most of us are expecting) best case we get some of our funds back.
I posted the email address of the group because they do want more players to come forward. I hope its okay.

 

[Przecinek]

Thanks,

I will send them an email today.

 

[Dinahnana]

Thanks,

I will send them an email today.

GL

 

[vinylweatherman]

Really!! A company that legally owes money to customers can simply call a meeting and vote among themselves that they are no longer legally liable.

Great! I'll hold a meeting with myself on May the 8th and vote that I am no longer legally liable for Council Tax - lets see if this holds water in court

If they WERE liable all along, then people on the board have been lying for the last couple of years, and backing this up with false documentation and claims. They should be arrested and charged with fraud, and banned from directorships for a long time. Shareholders who bought into the refinancing have also been conned, as the prospectus would have misrepresented the true liabilities of Media Corp.

It even shows that had players placed their deposits into their new venture, they may have lost their money AGAIN.

Looks like the doom mongers that were saying the initial post was a sign that the operation was going bust, as opposed to genuine technical issues, were right all along, and hopefully got out whilst they could.

It doesn't appear that much has been learned from this latest scandal. We STILL have obscure and convoluted company structures that make it impossible for players to know with any degree of certainty just who owes them the money when things go wrong. Even if players manage to figure it out, the convoluted structure provides an opportunity for the company to lie their way out of their responsibility. It seems that at first, the money WAS there in Media Corp to pay players what was owed, but during the two years they struggled on denying responsibility, they managed to spend it all on a failed new venture, so now there isn't enough left.

 

[Dinahnana]

Really!! A company that legally owes money to customers can simply call a meeting and vote among themselves that they are no longer legally liable.

Great! I'll hold a meeting with myself on May the 8th and vote that I am no longer legally liable for Council Tax - lets see if this holds water in court

If they WERE liable all along, then people on the board have been lying for the last couple of years, and backing this up with false documentation and claims. They should be arrested and charged with fraud, and banned from directorships for a long time. Shareholders who bought into the refinancing have also been conned, as the prospectus would have misrepresented the true liabilities of Media Corp.

It even shows that had players placed their deposits into their new venture, they may have lost their money AGAIN.

Looks like the doom mongers that were saying the initial post was a sign that the operation was going bust, as opposed to genuine technical issues, were right all along, and hopefully got out whilst they could.

It doesn't appear that much has been learned from this latest scandal. We STILL have obscure and convoluted company structures that make it impossible for players to know with any degree of certainty just who owes them the money when things go wrong. Even if players manage to figure it out, the convoluted structure provides an opportunity for the company to lie their way out of their responsibility. It seems that at first, the money WAS there in Media Corp to pay players what was owed, but during the two years they struggled on denying responsibility, they managed to spend it all on a failed new venture, so now there isn't enough left.

AFAIK it's a High Court Thing. I believe it's regarding how the liquidation is going to happen. I really don't know much about the whole thing. And the legal process seems quite confusing. But from the materials I have read it seems that there is a chance that players will get some money back. This chance maybe small or remote. If we come out with something great, If we get nothing then we are no better off. I don't think there is any harm in supporting this group who are in a legal battle with Media Corp.

I also agree if alleged illegal acts occurred then those people should be held accountable.

 

[jetset]

I followed the original Purple Lounge - Media Corp thing closely, and the last I recall hearing was that Jackson (the chairman) had put the Malta registered part of Purple Lounge into liquidation and that Media Corp had stopped trading.

Jackson subsequently resurfaced as CEO at The Weather Lottery-Boxhill firm (see post earlier in this thread).

The post at twoplustwo is difficult to follow, and I've asked for clarification from the email address quoted so that an accurate update on the story can be posted.

As a side note it is interesting to see that the UK Gambling Commission has just completed the consultative phase of fresh regulations on the separation of player deposits from operational monies in online gambling companies. The new approach insists on separation and requires public reportage by operators on how they have implemented segregated accounts and the level of protection afforded to players (that gives the players another level of information on whether they want to give a particular operator their hard-earned cash).

It doesn't give players precedence over other creditors in the event of a company failure like a Quistling trust would, but it's progress and will (unlike Malta) be properly monitored and enforced.

One of the most frustrating things about the Purple Lounge - Media Corp affair has been how ruthless corporate manipulation by the different directors running the companies appears to have left them unaccountable and unpunished for a lack of integrity that has prejudiced large numbers of players...it just doesn't seem right that they simply can walk away from this debacle and engage in further enterprises.

Edited to note that I missed $97's post that Media Corp had been wound up as a company in the London courts.

 

[jetset]

A quick update following an initial exchange with the Players Claim group in this sorry-ass affair.

I'm awaiting clarification on a couple of points I have questioned, but it certainly appears that more corporate manoeuvring has been taking place and that this story has a way to run yet.

Specifically:

* Media Corp has not yet been wound up, although the British tax authorities have put forward a petition for this. The company has, however been delisted. An initial winding up hearing in April gave the company just over another month (around mid-May) to submit its attempt to avoid liquidation by securing creditors' agreement to a Company Voluntary Arrangement.

* Apparently the guy now calling the shots at Media Corp is a lawyer called John Botros, and he has applied for liquidation to be avoided if an agreement of at least 75 percent of creditors can be achieved to a Company Voluntary Arrangement (CVA) which would allow the company to survive.

* The reason the Players Claim group has approached former Purple Lounge players as reported earlier in this thread is to strengthen its vote in opposing the CVA(it is claimed that evidence exists enabling the players to claim they are creditors of Media Corp and not of the bankrupt Purple Lounge Malta). Players want Media Corp to go into liquidation in order that an independent and full investigation of the company's accounts and the acts of its directors can be triggered).

* Contrary to earlier statements in this sad affair, it is now claimed that in fact Philip Jackson (CEO of Media Corp at the time) did not place the Purple Lounge Malta company into liquidation at all, and it remains fundless, licence-less and in limbo.

* Two meetings on the CVA vote have had to be adjourned, presumably as a result of the players' opposition.

* There are questions regarding a surprise GBP 2 million in creditor claims that have been noted in the proposals submitted mid-April - considerably more than the late 2013 admissions by the company. This has an important bearing on the CVA debate because it has the potential to dilute the player vote against the proposal (the players' claims are said to be around GBP 500,000.)

* The next vote on the CVA is on May 8.

More information once a few questions have been answered by the Players Claim group.

 

[Dinahnana]

A quick update following an initial exchange with the Players Claim group in this sorry-ass affair.

I'm awaiting clarification on a couple of points I have questioned, but it certainly appears that more corporate manoeuvring has been taking place and that this story has a way to run yet.

Specifically:

* Media Corp has not yet been wound up, although the British tax authorities have put forward a petition for this. The company has, however been delisted. An initial winding up hearing in April gave the company just over another month (around mid-May) to submit its attempt to avoid liquidation by securing creditors' agreement to a Company Voluntary Arrangement.

* Apparently the guy now calling the shots at Media Corp is a lawyer called John Botros, and he has applied for liquidation to be avoided if an agreement of at least 75 percent of creditors can be achieved to a Company Voluntary Arrangement (CVA) which would allow the company to survive.

* The reason the Players Claim group has approached former Purple Lounge players as reported earlier in this thread is to strengthen its vote in opposing the CVA(it is claimed that evidence exists enabling the players to claim they are creditors of Media Corp and not of the bankrupt Purple Lounge Malta). Players want Media Corp to go into liquidation in order that an independent and full investigation of the company's accounts and the acts of its directors can be triggered).

* Contrary to earlier statements in this sad affair, it is now claimed that in fact Philip Jackson (CEO of Media Corp at the time) did not place the Purple Lounge Malta company into liquidation at all, and it remains fundless, licence-less and in limbo.

* Two meetings on the CVA vote have had to be adjourned, presumably as a result of the players' opposition.

* There are questions regarding a surprise GBP 2 million in creditor claims that have been noted in the proposals submitted mid-April - considerably more than the late 2013 admissions by the company. This has an important bearing on the CVA debate because it has the potential to dilute the player vote against the proposal (the players' claims are said to be around GBP 500,000.)

* The next vote on the CVA is on May 8.

More information once a few questions have been answered by the Players Claim group.

Thank you Jetset for translating all that legal jargon into English.:notworthy
I understood about the vote and the surprise creditor but didn't understand the rest. I was speculating myself that this surprise creditor was added in order to push a yes vote through (my opinion). I am hoping for a no vote to go through on May 8 because a full investigation is warranted. I think this is also a chance for the players to have a voice. Maybe something positive will come out of this whole sorry saga in the end (player wise anyway).

 

[jetset]

More detail now up on Pokerfuse:

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[Dinahnana]

More detail now up on Pokerfuse:

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I am hoping for a no vote. 1% is unacceptable IMHO. I would also like to see some accountability for the former directors because what they did is reprehensible. I am also glad that this article keeps in mind the role (or lack thereof) of the LGA in this whole debacle

 

[jetset]

The meeting on the CVA took place as scheduled, and a spokesman for the players that are still owed by Purple Lounge reported:

"The CVA was passed very narrowly. The players votes were not allowed to count. A legal challenge is being prepared. It remains the aim of the players to regain their funds and fully expose what they consider to be blatant theft."

Looks as if this fight is not yet over - I can't understand why the players' vote against this Company Voluntary Arrangement was not accepted, bearing in mind that a Media Corp director had had acknowledged them as creditors.