The NSW opposition has called on the NSW government to investigate how an advertising contract was awarded to Revolution 360 while its founder and chair, Mark Fishwick, was being grilled in the NSW Supreme Court over allegations of overcharging clients on ad bookings and potential phoenixing activity, AdNews can reveal.
Sydney Trains awarded a contract to Revolution 360 to carry out experiential and sampling work at train stations across Sydney's rail network from the start of 2017 to the end of 2019, with the option of a two year extension.
Revolution 360 is an outdoor advertising booking company that specialises in street poster placements, experiential and sampling work.
It was awarded the contract in late-2016 after a tender process that began on 22 June 2016. During the process, Fishwick was being investigated by NSW Supreme Court-appointed special purpose liquidator Nicholas Crouch, of Crouch Amirbeaggi, over events leading to the collapse of Ambient Advertising and the formation of Revolution 360.
News of the investigation into Ambient Advertising was first revealed by Fairfax Media on 1 October 2016.
Jodi McKay, the shadow transport minister and NSW MP for Strathfield, told AdNews she was alarmed the government would award a public contract while a company director is facing serious allegations.
“The public expects that NSW government to do its due diligence on each and every contract and that includes the suitability of agencies to carry out that work,” McKay said.
“It’s inappropriate that the government has a relationship with any alleged phoenix company or a company where directors are being investigated of overcharging clients and a breach of their fiduciary duties. If that is the case, then the government needs to explain how this happened and immediately seek to rescind the contract.”
A Sydney Trains spokesperson, on behalf of Transport Minister Andrew Constance, told AdNews Revolution 360 won the contract after a competitive tender process and the government's procurement department found no cause for concern over the company.
“Sydney Trains has a clear and robust procurement process in place. All applicants must adhere to the NSW Government Code of Practice for Procurement and comply with relevant legal obligations,” the spokesperson said.
“The contract in question was awarded following a competitive public tender process last year. During that process, there were no legal issues identified for any of the respondents to the tender.”
The Fishwick files
The special purpose liquidator is acting on behalf of Foot Traffic Media, which is the only unrelated creditor of Ambient Advertising that was left unpaid when the business went into liquidation.
Foot Traffic Media claims it is owed hundreds of thousands of dollars and has paid for a court appointed special purpose liquidator to investigate Ambient Advertising and the role of former directors Fishwick and Milan Bozic in the collapse of Ambient Advertising and its sister company Ambient Rail.
The investigation, which included two days of public hearings in the NSW Supreme Court in December 2016 and April 2017, examined allegations the outdoor booking agency trimmed poster orders, systematically overcharging clients and media agencies over a number years.
The special purpose liquidator is now assessing the prospect of launching litigation against Fishwick.
Ambient Advertising was an outdoor ad booking agency that primarily specialised in street poster bookings. It was run by Fishwick and Bozic before being wound up in late 2013, around the time Revolution 360 was formed.
Its clients included several government departments, such as Sydney Foreshore Authority, Destination NSW, Tourism Victoria, City of Melbourne, Melbourne Zoo, Swinburne University and Griffith University, Football Federation Australia, AFL, Cricket Australia, DrinkWise and The Greens.
It also involved several media agencies, including Carat, MediaCom, MEC Hatched Media, Starcom, Mitchells, ZenithOptimedia, Publicis Media, 303Lowe and more – all of whom claim they were not aware of the trimming activity.
Fishwick told a court that the discrepancies between the number of 'units' media agencies ordered and the number of posters Ambient Advertising ordered from its supplier, Foot Traffic Media, were due to units being accounted as 'media space' rather than posters.
This means that if a poster ran for longer than the standard one-week placement period it would count for several units.
This theory was questioned by barrister Steven Golledge, acting on behalf of the special purpose liquidator, who pulled up evidence that Ambient Advertising staff, including Fishwick, had instructed staff to trim orders.
An industry source who places street posters across Sydney and Melbourne told AdNews the standard practice is that each unit booked represents a one poster to be placed for a one week duration.
The rise of Revolution 360
The probe is also examining whether any business was transferred between Ambient Advertising and Revolution 360.
Fishwick told the NSW Supreme Court at the most recent hearing on 21 April he couldn't recall if Revolution 360 staff, several of whom had worked at Ambient Advertising before being employed by Revolution 360, had courted Ambient's clients to transfer across unfulfilled contracts to the new business.
Several clients of Revolution 360 were previously clients of Ambient Advertising, including Tourism Victoria, Melbourne Zoo, the Victorian Aids Council, Mars (M&M's) and Calvin Klein.
When asked by barrister Steven Golledge about why Revolution 360 circulated an email to Ambient Advertising suppliers prior to the business winding up, Fishwick said "there was some handover work" before retracting the statement.
Golledge responded: “Handover to who? Not to Revolution 360?”
Fishwick said he didn't mean that, but when Golledge asked if his statement was an error, Fishwick replied: “I didn't say it was an error.”
According to ASIC, illegal phoenix activity occurs when company directors deliberately try to avoid paying a company's creditors.
This involves transfer company assets to a similar company run by the same directors for no or little value prior to handing the old company over to an external administrator.
Prior to Ambient Advertising winding up, Fishwick circulated the following document to Ambient Advertising's supply chain.
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