… and a campaign by a government department to bury the truth …

The long-standing saga of a damaging campaign against Andy, Pat and the Manaaki/We Are Indigo team continues unabated, fuelled by ongoing attacks, enabled by the continued lack of action from those at Callaghan Innovation who could put this matter to bed, once and for all.

Hopes of a resolution from the official enquiries currently underway remain, but like all good enquiries, time ticks on and meanwhile, the damage continues.

Recent releases of information under OIA requests make interesting reading to those of us immersed in the details.  A recent article (10 May 2023) in Business Desk again details the “facts” of the case (paywalled HERE).

How can Callaghan continue to deny that their due diligence investigator was conflicted, when their own internal emails and correspondence clearly document the conflicts? 

Why is the conflict-of-interest story so important to Manaaki and We are Indigo? 

The reports written show clear bias, omission of evidence, factually incorrect statements, personal opinions and frankly outrageous conclusions that are both inflammatory and defamatory. Manaaki and We are Indigo are bearing the full brunt of this.  And Callaghan Innovation is obscuring the truth.

The whole due diligence process looks like the capture of a Government procurement process either by a private individual or by those within the Government organisation itself.  More on this later.

For me to make such statements is not a trivial thing – and I do not do this lightly.  But I see no other way to interpret the evidence.  All of this is based on actual correspondence, released under OIA requests and in public statements, relating to the claims that Callaghan Innovation engaged a conflicted investigator.  And given extra weight by a letter from Stefan Korn to Andy Hamilton.

And this is but a small selection of the OIA disclosures that support the central proposition that Callaghan is struggling to keep its story straight.

23 March 2023:   Stefan Korn, CEO of Callaghan Innovation, quoted in the NZ Herald:

“Callaghan Innovation has consistently rejected conflict of interest allegations in the appointment of an external provider procured to carry out the due diligence report”

Exactly the same words used by other Callaghan Innovation spokespeople in other interviews – clearly the official line!

30 October 2022:   Stefan Korn, CEO to Ryan Challis (Callaghan Innovation Head of Procurement)
in an email released under the OIA, detailing the timeline of the engagement of John Borland (JB), the investigator)

“March 2022 – JB was contracted using a standard service agreement which contains a clause to declare any conflicts of interest.  During a meeting with JB Ryan asked JB specifically whether there were any conflicts he was aware of that would affect the work – he stated that there weren’t any”

“June 2022 – OIAs received from media and Manaaki.  As part of the OIA process CI receives an allegation that JB was conflicted at the time of writing the DD report.”

“July 2022 – CI contracts EY to perform a review of the DD report in light of the alleged COI of JB.”

“June 2022 (subsequently corrected to be August) – Ryan requests meeting with JB to enquire about alleged COI.  JB confirms that he was on retainer to one of the parties mentioned in the DD report and that he didn’t remember to declare the COI at the time of contracting / or he didn’t think it was a relevant COI.”

Also interesting is a letter, not in the public domain, from Stefan Korn of Callaghan Innovation to Andy Hamilton,
dated 27 September 22.

“We have not ignored the alleged conflict of interest.  We have actually taken it as a given.  We have specifically sought to address whether the due diligence process results can be relied upon. We also carried out a conflict disclosure process with all external parties involved in the procurement process at the outset.”

And

“As you know a conflict of interest in and of itself does not invalidate any decision or action – it is how the conflict of interest is handled that matters. The handling of the conflict of interest and its potential impact on the validity of the due diligence report was the very nature of the review by EY.”

Of note, the issue and impact of conflict of interest was specifically excluded from the EY brief, as were the findings of the reports.  EY was engaged to examine only the process, not the findings of the report, and definitely not the conflict of interest, which it appears Korn said Callaghan have “actually taken as a given”. 

So did they take it as a given?  Or did they, as was subsequently reported below, have “no idea” about any conflicts of interest!  Clearly someone is not sticking to the story!

And why was the conflict part of the scope of the EY review to begin with, and then removed from scope? Why would Callaghan itself not mount an investigation into the ‘alleged’ conflict when it not only had evidence from Indigo but also had confirmation of from the contractor of an undisclosed retainer relationship? Would you not investigate? Why did they not?

3 November 2022:   Callaghan Innovation is quoted in a Business Desk article, in which they say they have “no idea” about the conflicts of interest as they don’t have enough evidence.

BUT wait, there’s more…

Going back to the beginning of the saga, we have these exchanges between Crone (then CEO of Callaghan Innovation), JB the investigator, and Robett Hollis (the self-declared crusader driving the campaign against Andy Hamilton and the rest of the Manaaki / We Are Indigo team).

29 December 2021:  Email from Hollis to Crone, copying in John Borland (JB)

“Hey Vic,
As promised just connecting you with Johnny Borland from the Powermoves crew in regards to any other DD may need done for Procurement etc.

JB – Vic is FULLLLY across the chats we’ve been having….”

29 December 2021:  Email from Crone to Hollis, JB copied in

“Thanks Robett.
Johnny – we have some funding out of procurement now, on the short list is one service provider who I’ve heard via multiple services has been <<< rest of sentence redacted >>>
As we go through allocating out the next round of funding I’m keen to do good due diligence and look at some new methods to help inform our decisions as opposed to just traditional panel approaches. Maybe worth a chat if you think you can help?”

22 February 2022:  Message from Hollis to Crone

“Hey Vic…    Jonny just called me re Indigo. He has some more stuff bubbling with it so keen to link to with best person on the RFP side at Callaghan to properly engage”

And one last data point, skipping forward to much more recent times…

13 March 2023:  from Hollis’ newsletter Robett’s Ramble

“I feel Andy, Pat and of their business partners should NEVER be allowed to get close, advise, support, raise or invest in ANY startup, small businesses or Founders EVER AGAIN!!

So what do you think?  Could it be that Hollis has orchestrated a deliberate campaign , inserting his mate JB into the Callaghan Innovation procurement process via his personal relationship with Crone, the then CEO?   Crone clearly knew that JB had prior information about Manaaki/We Are Indigo and its business dealings.  JB’s leanings on these matters – which no doubt influenced his conclusions in the reports – are strongly signalled in the OIA extracts.

The fact that JB was in fact on retainer – ie. being paid – by one of the complainants against Manaaki may not have been clear to Callaghan at the time of his engagement, but was certainly known to Korn (the new CEO) just a few months later.  Did Borland really “forget” to disclose this, or was it part of the plan?

Did you know that the Office of the Auditor General has identified that knowingly failing to disclose a conflict of interest is tantamount to corruption?

The continued “official line” (as recently as March this year) that “Callaghan Innovation has consistently rejected conflict of interest allegations” seems to be to be disingenuous at best.  At worst, you may think it’s a bald-faced lie…  but of course, I couldn’t possibly say that.

So many questions spring to mind…

• Why will Callaghan Innovation not own up to their issues in the process, and act in good faith for the good of the whole ecosystem?
• It is simply too embarrassing, or are they worried about this being election year? Could they / should they have settled this sooner?
• Who is covering up, and what are they covering up?

I’ve said it before, so I’ll say it again. Callaghan Innovation – you are the only ones who can fix this, by admitting that the conclusions in the reports are unfair, in part because they were written by a conflicted investigator, and that you should never have allowed those reports to be weaponised to damage and destroy people and businesses.

A guest series from my husband and co-crusader in our quest for justice for Manaaki and We Are Indigo, and their directors.

This is, I hope, my last blog dealing specifically with the allegations made about Manaaki and their parent company, We Are Indigo, in the leaked due diligence reports.

A quick recap. These allegations are made in reports commissioned by Callaghan Innovation to support an RFP process.  They were written by a contracted private investigator John Borland, who had what appears to be an undisclosed conflicts of interest.  These reports were distributed by Callaghan Innovation to a number of government departments and agencies.  Since then, redacted reports of the summaries have been widely distributed, including from an anonymous Gmail address. 

This is in breach of the expectation of the confidentiality clauses in the procurement agreements – though Callaghan’s public position is that they were entitled to share the reports. 

The allegations in the redacted summaries are extremely serious, if they are true.  I cannot comment on all the allegations. There is insufficient detail.  But where there is detail, and based on this detail, I see misrepresentation and distortion.  Not what I would expect of a Government entity.  And yes, Callaghan, they are your responsibility.  You commissioned them.  They should never have entered the public domain.  But they are there, and they contain statements I suspect are seriously defamatory.  And you can contain the damage, but have chosen not to do so.

So far, we’ve seen…

1. An allegation of ‘misappropriation of government funds’ that appears to be no more than a dispute over an unpaid invoice, which was subsequently paid.
2. An allegation of a serious privacy breach that appears to be quite minor, with only 3 people involved (all notified) and no harm done.
3. An allegation of failing to deliver a prize in a competition, where the winner was paid the $10,000 cash prize, and was unhappy with the free website provided (and the delay in its delivery).
4. An allegation of ‘unauthorised acquisition of company shares’ where the partners in the proposed company failed to reach agreement on the terms of the collaboration, and the company was never actually formed and activated.  There can be no unauthorised acquisition.
5. An allegation that inflated and false financial data was provided for potential investment purposes.  Based on the evidence provided, highly unlikely – and the complaint does not come from existing or prospective investors.
6. Non-payment of Small Business Day Gift Cards by We Are Indigo.  The redemption of already issued cards was unilaterally cancelled by Chooice for unknown reasons – after the joint venture partners split up.  We Are Indigo immediately contacted the affected parties and issued them with replacement cards on another platform, at their cost.

So, some general comments on the reports and the extent to which we can rely on them. 

Overall conclusions from the Due Diligence reports

The reports are written in extremely emotive language and the evidence presented in the reports does not, in many cases, support the allegations.  There are what appear to be falsehoods and inflammatory representations. I am not a lawyer, but I would have thought that the defamation aspect is a significant concern for Callaghan – particularly given how widespread the distribution of the reports has been and the apparent lack of action by Callaghan to defuse the situation.  The allegations are extremely serious and are causing significant damage.  And so many of them appear to be false.

There are allegations in the reports I have not addressed as there is insufficient data.

John Borland states that “a standard Due Diligence Investigation relies on a ‘balance of probabilities’ threshold, meaning the evidence supports that ‘it is more probable than not’, that “any ‘risk issues’ identified are corroborated by evidence and therefore require the subject of the investigation to be placed in a ‘show-cause’ position due to the discoveries”.  A ‘show cause’ notice is a fairly common legal notice which gives an accused party the opportunity to show cause why the allegations are untrue or misleading, and should not be used against them.

I am curious as to how this balance of probabilities is determined.  Is a number of respondents making the same allegations a “balance of probabilities”?  Despite the allegations being improbable? I am curious that most of the allegations appear to come from referees stacked into the due diligence process without We Are Indigo’s knowledge.  Was there collusion in the responses?  Has this whole process been captured by unknown parties for unknown reasons?  I do not know, but I am suspicious.  Particularly as one of the respondents appears to be an IT contractor making serious allegations that I would have thought were well outside of his spheres of knowledge.

John Borland acknowledges that he has seen evidence in (positive) support of We Are Indigo “both in terms of business behaviours and deliverables” but he has chosen not to report it.  Extraordinary.  This is a massive shortfall in terms of natural justice.  I do acknowledge that based on the EY review report, Borland asked if he could interview We Are Indigo and this request was declined by Callaghan.  (And thank you to John Borland in being clear on your process). 

Looking at the reports I have to seriously wonder if John Borland is massively out of his depth in trying to formulate a report of this nature, or maybe I just don’t have all of the facts? There are basic issues where he appears to come up short. To name a few…

• The recommendation that the data breach issue should be escalated to the Privacy Commissioner.  In the first due diligence report, Borland adds that the matter should also be reported to the Serious Fraud Office.  (This appears to be a minor breach and is not reportable to the Privacy Commissioner.  It is well outside of the remit of the Serious Fraud office that typically investigates cases involving more than $500,000 – and where is the fraud, bribery or corruption?).
• Using misleading and false data for investment purposes.  Borland believes this to be professional misconduct and says it may amount to criminal behaviour if investment capital was raised.  Wow!  Possibly a massive lack of understanding of fund-raising processes!
• Lack of understanding of basic business processes with the accusation of ‘unauthorised acquisition of company shares’.   The company was never formed as the shareholders could not agree on control.  There cannot be an unauthorised acquisition of shares.
• I worry about words such as “attempted misappropriation of government funds” – a massive stretch from an invoice dispute, with said invoice subsequently paid. 
• Borland notes “In my professional opinion, based on my experience both as a Senior Detective in the Police and as a Professional Investigator with experience in commercial matters, the actions of the Respondent places them a ‘show-cause’ position with respect to their application. Furthermore the contents in Section 4 of this report, if validated, showcase some of the most serious unethical practices I have investigated in a commercial capacity”.  It is a problem that these allegations have not been validated.

To give John Borland his due, he acknowledges what he has provided is based on limited interviews.  He is effectively acknowledging there may be different views.  In terms of his process, he says We Are Indigo are in a “show cause” position.  In other words, they need to be able to discuss and possibly refute the allegations.  They have not had this opportunity and in the meantime it looks as if they are being black-balled by Callaghan, and the flawed reports continue to be widely distributed.  We Are Indigo have no channels in which they can fight back, without incurring massive legal costs.  This is not right.      

We Are Indigo have only seen heavily redacted versions of the reports.  They had a very limited electronic meeting with Callaghan Innovation on 22 May 2022, and feedback they provided has been ignored by Borland, since it did not agree with evidence already obtained.  (Double Wow!).  I have been advised that evidence obtained from other government departments has also been ignored. (Triple Wow!).

John Borland requested that the report not be distributed without notifying him.  Was this done?  Was this because he recognised that We Are Indigo had not had the opportunity to “show cause”?  Borland also notes in the first Due Diligence report that “The information contained herein is based solely on information obtained during the course of our investigation.  Accordingly, we make no representations as to the accuracy of material obtained from third parties, nor do we purport to advise you or any other party on legal liability or the future conduct of this matter. In all respects, we advise that you refer to your qualified judgement and that of your legal advisers”.  In his second due diligence report he goes further saying the reports should not be distributed, including to government departments, without notifying him.  John, were you notified of the distributions to government departments?  And did you agree?

Callaghan Innovation, what were you thinking?  Were you thinking?

Where to from here?

The reports were prepared by what appears to be a conflicted investigator, who did not declare his prior knowledge.  EY were engaged to review the due diligence process, but the scope was set to exclude conflicts of interest and report content.  They did NOT, as some are claiming, “independently validate and verify” the findings or conclusions of the report.  As well, EY stated that We Are Indigo should have been given the opportunity to respond.

Callaghan Innovation – You are the only ones who can fix this.

• Admit that the investigator was conflicted.
• State unequivocally that the due diligence reports, commissioned under the confidentiality of a government procurement process, should never have been shared around.
• Make it clear that you are upset and angry (are you?) at the way the reports continue to be leaked.
• Clarify that the EY review did not verify any of the allegations.
• Officially withdraw the due diligence reports, and apologise for the harm they have caused.
• And clarify the rights that Government Organisations have to share a respondent’s confidential information obtained in RFPs to other Government bodies, given how serious an implication this might have for tenderers moving forward.      

Let’s hope we see some sensible action – remembering this is an election year.

In our quest for justice, Peter and I have been ‘shining the light’ on the allegations made in the two due diligence reports, commissioned by Callaghan Innovation as part of an RFP process last year. Reports which have subsequently been weaponised in what appears to be a concerted attempt to drive We Are Indigo and their subsidiary Manaaki, out of business, and ensure that their directors, Andy, Pat and Monty, never work again in the New Zealand small business / startup ecosystem.

We’ve left the biggest “allegation” of all to last. Bullying. Now, I hope that we can all agree that bullying is not okay, not ever okay. It’s effects are insidious, and surveys generally show that many, perhaps most of us, have felt bullied at some stage of our personal and professional lives. 

But not everything that is labelled ‘bullying’ is actually so.  A robust negotiation, an emotional outburst, a less than sensitive rejection, hey, even an honest statement of realities that exist in our ecosystem…  all of these can be perceived as bullying by the person on the receiving end.  But does that make them bullying?

And if bullying is about an imbalance of power in a relationship  – physical, emotional, financial power – does that mean the Government is potentially the biggest bully of all?  After all, government departments hold the purse strings on so much that goes into our fragile ecosystem.

Ironically, the WorkSafe site, part of MBIE, our biggest government ministry, has a pretty clear definition of what bullying is, and what it is not.

So our government health and safety police tell us that bullying is repeated unreasonable behaviour, targeting a person, aimed at doing damage – victimisation, humiliation, intimidation and so on.  They explicitly tell us that one-off rudeness or tactlessness is NOT bullying – and thank goodness for that, or we’d all be in serious strife!

Nevertheless, mention the word “bullying”, and it appears that people lose their sense of rational perspective.  Add in the “vulnerable founder”, “female founder”, “big bad (powerful, rich, male) investor” narrative, and debate becomes almost impossible.  The assumption is that if someone feels that they are being bullied, it must be so.

This makes bullying the hardest allegation of all to address in the Manaaki / We Are Indigo due diligence reports. 

Can I, hand on heart, say that Andy, Pat and Monty have never shouted at a business associate, colleague or employee, perhaps in sheer frustration?  Of course not.  Did the stress of lockdowns, Covid impacts on business, and pressure to keep people in work play out into stress-driven behaviours?  Perhaps – and that’s not an excuse, just a perspective.

Can any of us say we have always behaved impeccably in our business interactions?
I know that I can’t, and good on you if you can!

Actual evidence of bullying is scant in the due diligence reports – with just two specific examples.

• In the first, the MindLab CEO claims that on one occasion Andy Hamilton was intimidating, demeaning and aggressive, in a telephone conversation about the Digital Boost programme.  Should this have happened?  Absolutely not.  But as far as we know, this was a one-off, rather than an ongoing pattern of behaviour.  And in the Digital Boost relationship, Indigo was a subcontractor to MindLab, and was not in a position of power.  Bullying?  Or an aggressive defence?  Not sure – but either way, Andy, what were you thinking?

• The second example given is an email from Pat MacFie to the team working on the Chooice website, following the data breach event (already discussed HERE).  He said…

“No one ever turns the site off unless I say so.  It was a ridiculous over-reaction to turn the site off!  Turning the site off is my call alone not yours Soleil, not yours Sarah.  Going forward if anyone turns the site off without my express permission it will be construed as serious misconduct.”

Certainly assertive, and very very clear.  But not unreasonable, in my view, to establish where the authority lies, in the face of what appears to have been (based on the evidence presented by the investigator) a massive over-reaction to a minor breach, quickly fixed, with no harm done.

Investigation of bullying allegations is a very difficult task, and one requiring specialist and substantial resources.  It seems unlikely that the ‘open source’ techniques used by the investigator would be sufficient to do anything more than uncover accusations.  There was certainly no attempt, as far as I can tell, to prove these allegations to be evidence of actual bullying.

Beyond the specific allegations, most of the inferences about bullying in the reports appear to involve two attempts by Indigo to form joint ventures with other business partners, not as an investor, but as a co-founder, a partner, taking an active role in the venture. 

• Chooice – the micro business platform established by Indigo and Sarah Colcord in partnership, in 2021. 
  The partnership was dissolved due to a fundamental disagreement between the partners;  a settlement was reached, documented in a press release issued at the time, which gifted Indigo’s shares to Sarah and the vendors on the platform.

• MosaiqueTV – an entertainment subscription platform established between Indigo and Lance Savalli, Taran Paris and Jordan River in 2021, where the company was never formed as the partners could not agree on the shareholding.

We know that the attempts at partnership were dissolved.  We know that Indigo reached agreement and settlement of outstanding matters, in both cases at significant cost to themselves.

And as an aside, the third dispute, with K&J Growth (probably associated with the “aggressive” telephone conversation discussed above) was resolved when an outstanding invoice was paid.

Chooice and MosaiqueTV were both genuine partnerships, with Indigo being a joint founder. Indigo did not act as a VC as has sometimes been reported.  Indigo provided infrastructure, expertise and in some cases funded costs of the business activity.  At no stage was venture capital introduced, although with Chooice, there was a plan to raise growth capital from other parties. When the partnerships dissolved, the split was resolved in what Indigo believes was a fair manner.

Indigo received no Government funding for these partnerships, nor were Indigo contracted to support these businesses. Partnerships like these often fail.  Over 60% of founders and joint ventures in the startup space have major partnership issues, with founders splitting up, often acrimoniously.  In many cases a partnership failure is more akin to a divorce than to a business dispute.  No one wins.  There is never a joint-custody arrangement for the “baby” – the joint venture they formed together.

Joint venture discussions are often robust.  Not comparable to employment situations.  Either party can leave.  Partners are passionate about what they want to achieve – but not necessarily how it should be done.  Robust discussion is not bullying.

Can I, hand on heart, say that the break-up discussions between Indigo and its business partners were always conducted in a calm, supportive and understanding tone, on both sides?  Of course not.  But what I can say is that in both cases, the counter-parties (now accusers) walked away with the lion’s share of benefit, and that Indigo genuinely believed that these matters had been settled, until they were raked up again in this Callaghan RFP process.

In my view the DD reports have insufficient evidence to support the case of bullying.  It would be nice to have had that resolved.

And finally, we should consider just who is actually being bullied here. 

The repeated, relentless distribution of confidential reports, making allegations about people who have no way of defending themselves; the inherent intimidation of those who might want to speak out in their support, the raking up of long-past and unrelated business dealings by the media – this looks very much like a targeted campaign of unreasonable behaviours, designed to humiliate, intimidate and damage a bunch of people who are in no way perfect, but have done immense good for thousands of small businesses in New Zealand, and just want to be allowed to keep doing that.

And that, my friends, is not okay.

Callaghan Innovation – YOU are the ones that started this, YOU are the ones who can finish this.

Withdraw the reports, issue an apology, state clearly that the investigator was conflicted, that the EY review did not validate the claims made in the reports, that the reports should never have been circulated to others, and that there is very little evidence to suggest that Manaaki and We Are Indigo are anything other than a bunch of people, trying to build a business that supports other businesses to get ahead. 

And that they do not deserve to be dragged through the mud!

A guest series from my husband and co-crusader in our quest for justice for Manaaki and We Are Indigo.

We’re nearly there now, just picking up the last few ‘rats and mice’ allegations before I close in the next episode, with what is one of the biggest claims against We Are Indigo and its associated companies and people.

A quick recap – these allegations are made in reports commissioned by Callaghan Innovation to support an RFP process.  They were written by a contracted private investigator John Borland, who had what appears to be undisclosed conflicts of interest.  These reports were distributed by Callaghan Innovation to a number of government departments and agencies.  Since then, redacted reports of the summaries have been widely distributed, including from an anonymous Gmail address. 

This is in breach of the expectation of the confidentiality clauses in the procurement agreements – though Callaghan’s public position is that they were entitled to share the reports.

The allegations in the redacted summaries are extremely serious, if they are true. And that is the real question, and the subject of my investigations.

So far, we’ve seen…

1. An allegation of ‘misappropriation of government funds’ that appears to be no more than a dispute over an unpaid invoice, which was subsequently paid.
2. An allegation of a serious privacy breach that appears to be quite minor, with only 3 people involved (all notified) and no harm done.
3. An allegation of failing to deliver a prize in a competition where the winner was in fact paid the $10,000 cash prize, and was unhappy with the free website provided (and the delay in its delivery).
4. An allegation of ‘unauthorised acquisition of company shares’ where the partners in a proposed company failed to reach agreement on the terms of the partnership, and the company was never actually formed and activated.

For today, the fourth episode in this series, with more allegations about failure to meet obligations.

Allegation:  Respondent provided inflated and false financial data for potential investment purposes.

It is believed this relates to capital raising activities to support the growth of We are Indigo and/or the Chooice platform.  Chooice, at that time, was a partnership between We Are Indigo and Sarah Colcord (one of the disaffected parties interviewed by the investigator). 

Raising capital for growing ventures is something that Andy Hamilton knows a lot about, as do Debra and I – all being active participants in the early stage / angel investment scene for more than a decade.  Andy has even more experience from his years of running The Icehouse.

It is the nature of investment pitches that they are shaped for each different type of investor, and that predictions are made as to where the business could be, typically at least 2 – 3 years out, with the injection of investor-provided capital.  Investors expect these projections to be aspirational, but not wildly unrealistic.  We know that in reality the outcomes will be different.

Projections generally come with relevant assumptions. For example, a pitch to a media organisation may include assumptions as to access to the organisation’s client base.  A pitch to a VC firm would not have this benefit, and Chooice/Indigo would undertake different activities to achieve growth. Indigo stands by the projections made, based on the facts at the time.

I find it extremely hard to believe a person of Andy Hamilton’s stature and experience would provide inflated and false financial data.  Andy has considerable experience as head of the Icehouse.  But I can understand that someone with no financial, company management and no capital raising experience might be uncomfortable with what are often “hockey-stick” projections.  For Andy, it was his reputation on the line with these projections, as it is for every founder pitching for investment.

I strongly doubt that John Borland, or indeed his informants (who do not appear to include the potential investors being pitched to) has sufficient experience to form a view on the projections in investment pitch documents in general, or indeed, this one in particular.

It is also interesting that this allegation featured prominently in the initial due diligence report, but appears to be somewhat down-played in the second more detailed report.  Is that perhaps an indication of a belated self-awareness on the part of the investigator, as to his lack of expertise in this area?

Allegation: Non Payment of Small Business Day Gift Cards by We Are Indigo

This next allegation was part of the first due diligence report, but not the second one.  It has been, however, the subject of considerable social media commentary and featured prominently in press reports – thus continuing the damage caused despite apparently having been dropped from the later report.

The Small Business Day initiative was created by We Are Indigo to support small businesses in New Zealand, with the funding provided by a third party. As part of the initiative, We Are Indigo arranged for vouchers and gift cards to be issued to consumers, that could be used to buy New Zealand made goods that were featured on the Chooice platform.  Indigo saw this as a significant value add to the Chooice vendors – an opportunity to get their products in the hands of consumers.

We Are Indigo reimbursed Chooice for the Small Business Day gift cards as they were claimed. (At this time, Indigo was also fully supporting and funding Chooice, including paying all wages of the team.)

As part of the break-up of the Chooice partnership, We Are Indigo became aware that the Chooice owner Sarah Colcord now wished to cancel the gift cards.  Indigo did not agree this was appropriate, and undertook to continue honouring the cards as they came in, despite no longer being a shareholder in Chooice.  Chooice management declined this offer, and cancelled the gift cards.

We Are Indigo immediately contacted the impacted gift card holders and issued them with a replacement gift card on another platform, so they were in no worse a position.

It appears that We Are Indigo reacted to circumstances outside their control with honour and integrity and at some financial cost to themselves..

Where to from here?

The reports were prepared by what appears to be a conflicted investigator, who did not declare his prior knowledge.  EY were engaged to review the due diligence process, but the scope was set to exclude conflicts of interest and report content.  They did NOT, as some are claiming, “independently validate and verify” the findings or conclusions of the report.  As well, EY stated that We Are Indigo should be given the opportunity to respond.

There are so many question marks over these reports and their conclusions.  Are they fair and accurate?  Sometimes when something seems so unbelievable, it’s because it is not true.

Callaghan – You are the only ones who can fix this.

• Admit that the investigator was conflicted.
• State unequivocally that the due diligence reports, commissioned under the confidentiality of a government procurement process, should never have been shared around.
• Make it clear that you are upset and angry (are you?) at the way the reports continue to be leaked.
• Clarify that the EY review did not verify any of the allegations.
• Officially withdraw the due diligence reports, and apologise for the harm they have caused.
• And clarify the rights that government organisations have to share confidential information about RFP respondents with other government bodies – given the serious implications this may have for those participating in future tenders.

It’s 2023.  A new year, time to wipe this dirty, conflicted saga off the board and move on to fresh and more meaningful pursuits.

Shining the light on the Callaghan Due Diligence reports on Manaaki. 
A guest series from my husband and co-crusader in our quest for justice for Manaaki and We Are Indigo.

This episode continues my analysis of the allegations made by investigator John Borland, in the Due Diligence Reports about We Are Indigo / Manaaki, commissioned by Callaghan Innovation as part of a procurement process.  A reminder that these reports have been very widely shared / leaked, both by the then Callaghan CEO and then by various others, doing significant business and reputation damage to the companies and people involved.

In previous episodes, I investigated the first two allegations, finding that

1. The allegation of “misappropriation of government funds” appears to be a dispute over an unpaid invoice, which was subsequently paid. (HERE(
2. The allegation of an inappropriately managed data breach related to a minor breach, in which the three parties affected were notified, and from what we know no harm was caused.  (HERE) The breach was not notifiable as there was no serious damage done.

In both these cases, there are the facts – an unpaid invoice, a minor data breach – and then there is the sensational interpretation of these facts, in the allegations being made in John Borland’s due diligence reports. 

Moving on today to allegations 3 and 4, we again see a similar pattern.  Small facts, big allegations – a failure to honour obligations.

Allegation: Failing to honour grant initiatives as advertised:
Evidence has been obtained by a recipient of one of the Respondents grants that relates to failure to honour multiple aspects of the grant they received. This resulted in financial hardship and serious mental health problems to the small business owner.   (Quoted from DD report)

What actually happened here?

This is believed to relate to a Manaaki funded campaign offering a prize to one small business owner of $10,000 cash, and a new website. The winner was identified, and the cash was paid over.  There were, however, delivery challenges on the timeline for the website delivery, though it was eventually delivered.  The winner was not happy with his free website, but has continued to be connected with Manaaki team members and its community.

A more benign view of this series of events is that there was a mismatch of expectations vs reality.  While I have no knowledge of what was promised, I suspect the delivery could have been a very basic ‘starter’ site, one befitting a business that had not previously been online, and did not have the capability to run a sophisticated site.

In any event, it’s hard to see how winning a $10,000 cash grant would have resulted in financial hardship for the unhappy winner, notwithstanding his discontent at the website, and the delay in delivering it.

Allegation 4: Unauthorised acquisition of company shares to gain majority control:
Evidence has been obtained showing the Respondent without approval or authority of a former business partner gave themselves one (1) extra share to place them as a majority shareholder over the victim business.

The “victim business” in question is a venture called Mosaique Ltd, owned by three people, who partnered with We Are Indigo to create a subscription entertainment and content business called MosaiqueTV.

As is often the case with entrepreneurial people, they launched into the ‘doing’ (in January 2021), without any formal documentation of the partnership. It was, after all, Covid times. Later in the year, the parties agreed that more formal documentation, including a shareholders’ agreement, should be put in place.

A 50/50 partnership structure was originally proposed.  We Are Indigo indicated that it would be a condition of their participation that they had ultimate control, via the issue of ONE additional share (giving them 50,001 shares to the 50,000 shares proposed for the three Mosaique partners).  This is a common mechanism to provide a break in any key decision deadlock.  I have been advised that additionally, the appointment of an independent director was also discussed.

No agreement was ever reached;  no paperwork ever signed.  We Are Indigo’s condition of a 50%+1 share was the major sticking point. When it became clear that the parties could not agree, the MosaiqueTV partnership was wound down with the income, less expenses, being paid to the three partners in Mosaique Ltd.

The allegation of “unauthorised acquisition of company shares” appears to relate to the fact that, while the terms were being discussed, a shell company was registered (by Indigo’s financial controller)  with Indigo and the partners as shareholders, in which Indigo was intended to hold 50,001 shares and the Mosaique partners, 50,000 shares. This shelf company that was never activated as the parties could not reach agreement. 

There was no “unauthorised acquisition of company shares” as there were no shares to acquire.  None were ever actually issued.  The disagreement as to company structure resulted in the company not being formed.  The statement that [Indigo] “gave themselves one (1) extra share to place them as a majority shareholder over the “victim business” is a serious misrepresentation of the events.

“So what?”, I hear you say (those of you who’ve navigated your boredom to get this far)!

None of this would really matter – it’s just the ‘spin’ that a small group of disaffected people have chosen to put on a series of business disputes – but for the fact that the allegations have been made public, and distributed by a trusted government organisation, and then by bad actors in the ecosystem.  And these allegations are doing the real damage.

The reports were prepared by a conflicted investigator, who had worked for / with at least some of the “victims” in the past, who has presented a series of very serious allegations, which were NOT verified in the EY review of his process (because Callaghan Innovation scoped the review to exclude the actual allegations). 

There are so many question marks over these reports and their conclusions.  Are they fair and accurate?  Sometimes when something seems so unbelievable, it’s because it is simply not true. 

The only real solution at this point is for Callaghan Innovation to officially and publicly withdraw the reports, acknowledge that the process was flawed, and that the reports should never have been shared around. An apology for the harm caused by them is the very least I would expect.

Callaghan Innovation – you are the only ones who can fix this. 

As I see it, there are three possible courses of action.

1. Commission a new review of the allegations (not just the process) with a genuine, well qualified investigator.  Probably too late for this;    
2. Withdraw the reports, apologise for the harm caused by their distribution, retract the allegations (based on work to date there is considerable evidence to question the validity of the allegations), admit that the investigator was conflicted, and take learnings into your next procurement process;
3. Or if you truly believe that there is no problem to fix here, then at least tell us that you, the Directors, are completely happy with the way things happened here.  Tell us that you believe that the damage caused to Manaaki and its directors is a just and desirable outcome.  (And please, tell us why you believe that!).

It’s a new year.  Let’s get this sorted so we can all move on.