Media Corporation
Posted on July 26, 2014
I last wrote on the affairs of Media Corporation in September 2013. This was once an AIM company that was delisted in November 2013 after announcing a “cessation of business” in August. My previous report said that this was “One of the first problem companies that ShareSoc reported on (and got involved with to a limited extent, although it always appeared to be somewhat of a basket case)“. But the dog refuses to lie down and die.
Now a shareholder in the company, Steve Egan, has put together a dossier of complaints about the affairs of this company which is being submitted to the City of London Police and other authorities. It alleges serious failings by the former directors including major misrepresentations of the financial position of the company, both in the published accounts and in RNS announcements – this includes misrepresentation of the value of assets.
Media Corporation primarily operated on-line gaming sites including Purple Lounge in a subsidiary that it acquired. It also owned the domain name gambling.com and the attached business at one point which was used as a marketing “portal” for other gaming sites and which might have been a valuable property. It is alleged that players funds on Purple Lounge were not separated and held in separate accounts but co-mingled with the cash of these companies which would clearly have been a breach of their operating licenses. It is further alleged that the former directors claimed to have special dispensation from the lGA of Malta to do this providing those funds were maintained elsewhere within the group at all times. Purple Lounge UK subsequently collapsed and Baker Tilly were appointed as liquidators. There was a claim that the parent company had no obligations in respect of the subsidiary but this has been challenged and it appears player funds, which should have been held on trust regardless of location, remain missing.
In late 2006, the USA passed the Unlawful Internet Gambling Act (UIGEA) very unexpectedly which blocked payments to gaming companies. This put most on-line gaming companies that serviced US clients (even though most of them were based outside the USA) out of business. Or at best it reduced their business very substantially and caused them to focus on other countries. But it is alleged that this very bad news was not communicated appropriately to investors in Media Corporation, with the news being downplayed and they continued to encourage investment in the group.
Note this writer was a director of a company operating in this area at the time which serviced gaming companies. The UIGEA was disastrous for companies operating in the on-line gaming market in the USA and had a very immediate impact because nobody likes to be put in prison just for flying into the USA (which happened to at least one UK Plc director) when expert legal advice had previously said most on-line gaming was legal. The announcements by Media Corporation certainly appear in retrospect to have been way too optimistic, especially in light of all material profits at the time for the company coming from the us market and did not reflect what other companies were seeing at the time.
Media Corporation put in place a CVA (Creditors Voluntary Arrangement) earlier this year against the wishes of the purple lounge poker player’s who remain out of pocket.
As you can possibly tell from the brief description above, the story is complex as all such cases are. But if anyone requires more information or has an interest in this matter, please send an email to
info@sharesoc.org and we will forward it to Steve Egan.
Roger Lawson
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