News on Rebus debacle proves Crowdcube model is flawed

Crowdcube now need to answer some very serious questions.

In the 2.17B just filed today at Companies House, the administrator writes -

''In May 2014 Resolve were engaged for one month by RIS (Rebus) to seek and identify potential investors, however no investment was received. Following this exercise the directors (of Rebus) sought to raise the required capital through a crowd funding scheme.  The Directors successfully raised about £800,000 which allowed RIS to continue to trade''

So it is clear that as early as May 2014, Rebus was in trouble. Again it is stated in the Administrators report that Rebus found it hard to generate enough cash to continue trading.  Of course the Administrator could have replaced the word 'scheme' with 'scam'.

The report goes on to identify that in November 2015, so just a few months after helping themselves to £800,000 via Crowdcube, Rebus was again asking Resolve to find new investors on the back of their intention to file for administration.

So the obvious questions for Crowdcube are -

1. Why when the company had failed a year earlier to raise any money from professional investors, did you allow this pitch on your site - without making ANY MENTION of this failure?

2. Why was this cash flow problem, identified very clearly by the the Administrators and the directors of Rebus, not part of the Crowdcube pitch to investors. In fact why was this flaw in the business plan, known as it was at the time to the directors of Rebus, hidden from investors.

Finally a question for the FCA -

Why are you not taking any action against this kind of malpractice?

Here we have a clear example of a FCA regulated platform chosing either through its own negligence or deceit to offer investors a deal that was very clearly not as described. The result, a total mess for all concerned. All of which could have been very easily avoided by Crowdcube simply refusing to allow Rebus to pitch.

Crowdcube are very simply not fit for purpose.