The great video compression scam - How Adam Clark hoodwinked Tolly Group, and many more

Stuart Corner
Monday, 09 August 2010 17:08

Opinion and Analysis

Remember Adams Platform? The Australian developed video compression technology that claimed to deliver high quality video at 56kbps. That sounds impossible, and it was. But investors lost $27m before the developer, Adam Clark, was exposed as a shonk.

I followed the Adams Platform saga in the early 2000s with great scepticism and increasing incredulity as the weight of 'evidence' mounted to support Clark's claims and those of the ASX-listed company, Mediaworld Communications (MWC), that acquired his technology and sucked in $27m of investors' funds to develop and market it.

All those memories came flooding back this morning when I read in the Sydney Morning Herald's 'Business Day' section that the dudded investors who brought a class action suit against Clark and MWC are finally getting their day in court.

Not that they have any chance of getting any of their $27m back. Clark invested most of in pubs and then went bankrupt, and has settled with the claimants for a pittance, but that's another story.

The SMH reported: "The law firm [Maurice Blackburn] will be squaring off against two men who featured heavily in MWC's April 2004 prospectus. They are the US testing guru Kevin Tolly, whose Tolly Group produced a glowing technical report saying the Adams Platform technology offered 'a radical improvement over existing commercial solutions,' and the MWC chairman, Michael Ramsden of float advisers, Terrain Capital."

Tolly will certainly be feeling the heat. As MWC told the ASX shortly after gaining access to the technology of the former privately owned Adams Platform company: "The verification of the efficacy of [Adams Platform technology] was conducted in late 2003 by the Tolly Group, which is a leading company for independent technology verification. That report was relied on by MWC when it proceeded with the acquisition of the [Adams Platform Group on 1 March 2004."

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