One company, PT Berkat Air Laut (BAL), based in Indonesia, owns and operates desalination plants, and invested in Starfish Enterprises Ltd (SEL) on the basis of presentations and discussions that promised the following:
- The Bali SEL representative informed themin December 2012, based on information he had received from SEL,that they had successfully desalinated seawater using their patented technology in September 2012. Their presentation claimed that their technology would be far cheaper to purchase and operate than conventional equipment, and produce much less waste product. This was backed up by a lab test of the product water produced – link to lab test
- At meetings on 7th – 9th January 2013 at their manufacturing facility in the Philippines, this was confirmed by the Chairman, Mr Ian Cummins and the then CEO,MrPaul Conlon, and BAL was given a timeframe of 3 months for the seawater desalination units to be ready for production.
- A presentation by Mr Paul Conlon showed a worldwide Starfish network of licensees and an overall impression of major growth & demand worldwide for their technology.
- Based on this, BAL then signed an Interim License Agreement on 9th January 2013 with the Chairman, Ian Cummins and the CEO, Paul Conlon, for the areas of Lombok, Sumbawa & Flores in East Indonesia. The license cost was agreed at US$130,000, with US$60,000 to be paid as a deposit, and the balance due in 90 days, subject to a working prototype of a seawater desalination unit being completed. This was verbally agreed to be for all Starfish technology, with BAL’s main interest being in seawater desalination.
- The details of BAL’s permanent contract were to be finalized in the next few weeks so as to be ready for signing at the appropriate time.
- US$60,000 was transferred to Starfish HK on the 10th January as agreed.
The events of the next three months:
- Emails were sent on 8th, 17th, & 21st January, 2013 requesting contract details and pricing structure. No answers were received.
- BAL was informed that the CEO, Mr Paul Conlon had committed suicide on the 29th January.
- On Feb 8th BAL received a request from Mr Ian Cummins that their 2nd payment (due April 10th) of US$70,000 be paid immediately, stating “This will allow the necessary investment in time and equipment to get the desalination process to where it should be in readiness for the commercialization process”.Upon enquiry, BAL were informed by the Starfish Bali franchisee that there are “irregularities” in the company that have come up after Mr Paul Conlon’s death.
- On Feb 12th BAL was informed by Mr Ian Cummins via a recorded Skype call that the company would be put into liquidation by the 18th February unless a payment of approx US$132,000 was made to ONC lawyers in Hong Kong to settle a claim against SEL. The claim was that SEL defrauded a shareholder by not issuing share certificates. Documents exist to support this. It was implied that Mr Paul Conlon had created this situation. The acting CEO, Mr Colin Watson, was at this time introduced. Mr Ian Cummins stated that US$200,000 total would be sufficient to also complete the development of the seawater unit.
- BAL agreed to pay a total of US$200,000 for 4% of the shares in SEL, and to transfer US$133,000 to ONC Lawyers HK on 16th February 2013. The court case against SEL in Hong Kong was then withdrawn.
- A BAL director visited the Philippines on 21st-25th February to confirm license contract details and share transfer. Mr Ian Cummins or Mr Colin Wilson did not provide any license details at this time, and it was difficult to get any time with them. A letter confirming the share sale signed by Mr Ian Cummins was provided, and an assurance was given that formal share certificates would be issued as soon as possible.
- The balance of US$67,000 for the share purchase was transferred to Ian Cummins Enterprises (ICE), the Philippines, on 28th February 2013.
- Seven emails were sent over the next 3 weeks requesting contract details, pricing structure, and share certificates. BAL received only 1 or 2 vague replies that did not provide any answers, stating workload as the reason.
- On 8th April, BAL received a request from SEL for an additional US$175,000 to complete the production of a working seawater unit, and that they have achieved “extremely promising” results in their testing. BAL statedit was not willing to finance this as they had been told previously that the funds BAL had already sent them would be enough.
- On 12th April, BAL received an email from Mr Colin Wilson stating that the license fee for BAL’s area had increased from US$130,000 to US$7,882,010, for desalination only, and that our previous agreement is no longer valid due to non-payment by the 10th April. Clarificationwas requested from Mr Ian Cummins, no reply.
- Test results were requested 4 times between 12th and 20th April, with no response.
- BAL was informed on 23rd April that Colin Watson, acting CEO, had resigned effective immediately, and a new CEO, Mr Raj Boora, had been appointed.
- Another new CEO, Mr Jay Singh was appointedaround the end of April.
- Five emails were sent requesting clarification, with no clear answer until 22nd May, when Mr Jay confirmed that the new price for BAL’s license willindeed be US$7,882,010, with a demandthat a 10% deposit be paid before 30th April, 2013.
- BAL sent an email on June 24th requesting the return of their funds, as they believedStarfish had not fulfilled the promises made regarding their ability to desalinate seawater, which was BAL’s sole reason for investing with their company, unilaterally changed BAL’s signed agreement beyond recognition, and failed to issue share certificates.
Although their wastewater treatment technology is possibly effective for some applications, BAL was deliberately deceived regarding SEL’s ability to process seawater to drinking water standard.In almost 12 months, they have not been able to reproduce the results stated in the lab test and this strongly infers that it was deliberately misrepresented. This is also evidenced by the fact that their new website contains no reference whatsoever to seawater desalination.
Added to this, there is no “worldwide dealer network”. All their previous licensees are in a similar situation to that of BAL, also seeking the return of their funds due to broken promises and non-performing Starfish units. See www.starfish.com.au for one such story.
BAL believes the only Starfish units operating commercially are in Bali, Indonesia, and information from the clients is that they are getting very mixed results.