When is a share not a share? When it’s a Lakeba share!

by Michael West | Nov 27, 2023 | Business, Latest Posts

Colourful digital evangelist Giuseppe Porcelli hoodwinked his investors into taking shares in Lakeba Group which were not actually “shares in Lakeba Group”, but rather shares in “Lakeba Shares”. Michael West with the latest from LakebaLand. 

As the lawsuit by several shareholders against Lakeba Group alleging false and misleading conduct grinds on in the courts, a number of ex-employees of Lakeba have been in contact with MWM following recent articles about Giuseppe Porcelli, the colourful CEO of Lakeba Group based in Manly. 

This local “tech titan” might have to rely on the fact that English is not his native language to explain the confusion around his company’s employee share plan.

It seems that certain promises were made regarding the issue of “Lakeba shares” to various employees when cash was tight, especially during the Covid years. Naturally assuming they would be issued shares in the parent company, Lakeba Group, the employees worked diligently at reduced salaries only to find out that the shares issued to them were in a shiny new company called “Lakeba Shares Pty Ltd”.

So it was not “shares in Lakeba” as expected, but “Lakeba Shares shares”…clever in a sneaky way, but “not really cricket” as one of Porcelli’s many disillusioned investors described it. Even bocce for that matter.

This company only had one asset, being a chunk of shares in Lakeba Group, the parent company where all the potential value resides. So, instead of getting shares directly in the company they were working for, they got shares in a separate non-trading shell with no direct interest in the underlying shares of Lakeba Group. This meant that the sole Director of Lakeba Shares, Mr Porcelli himself, of course, could control the votes of those shares in the parent company as well as any sale of them.  

When the employees realised they had been duped they called an extraordinary general meeting of Lakeba Shares in order to replace Porcelli as the sole Director so that they could then exercise the votes attaching to the Lakeba Group shares that the company held on their behalf, and offer them for sale in order to monetise their shareholding. They had done the work, so time to enjoy the spoils.

The amazing Giuseppe Porcelli hits the CEO big-time without the help of a single customer

 

Smelling an embarrassing defeat at the hands of pesky employees, Porcelli did the only sensible thing he could … issued millions of new shares in the Lakeba Shares company to himself and other close allies in order to outvote the proposed resolutions!  All this is readily apparent from a review of the Share Register and associated filings held by ASIC. All hail Emperor Porcelli!  Neapolitan business genius!  Graduate of the Silvio Berlusconi School of Business Ethics!

With that battle won it was time to win the war.  Instead of leaving his trusted cronies holding their millions of effectively worthless shares in Lakeba Shares, he promptly converted them all to shares in Lakeba Group, the parent company, leaving only the original employees holding the dead baby in the pram.

And just to rub it in, Porcelli then somehow skirted, or simply ignored, the provisions of the Corporations Act to convert the voting shares in Lakeba Group that were held by Lakeba Shares into NON-voting shares, thereby making them worth even less! Take that, loyal employees!

So the reward for working hard at reduced salaries was ultimately a bunch of shares in a company shell that holds non-voting shares in an unlisted public company as its only asset. More a kick in the groin than a pat on the back. No wonder Mr Porcelli gets some very bad reviews on Glassdoor.com if that’s the way he treats employees.  All because Lakeba Shares are not the same as shares in Lakeba…

Smooth Talker: Lakeba entrepreneur Giuseppe Porcelli takes tech punters for a rude ride

Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.

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