‘Gina Rinehart was the big name’: Failing news start-up used reputation to raise millions

Emails, presentations, creditors’ lists, shareholder agreements, ASIC documents obtained by this masthead show this is not the first time the company has run into financial strife. Interviews with former staff and investors also indicate it is not the first time the man who says he is leading the entity, Norris, has used the names of well-known media figures and investors to convince others to back his idea.

In an early version of News.net, Norris used Rinehart to convince others his business idea was worth investing in. Rinehart, who requested anonymity when she decided to provide financial support, made her first investment (via Hancock Prospecting) in April 2013, when she was a major shareholder at Fairfax Media and Network Ten.

Shareholders – including Hancock Prospecting (through a company called Influential Associates) – held a resolution to wind up the company in 2015, but Norris did not do so. Instead, he used the backing of people such as Rinehart to try and raise more money, according to interviews with investors and documents viewed by this masthead. This was despite claiming elsewhere in emails and documents that he could not reveal the identity of the “major shareholder”.

Blake Douglas, who was 21 years old when he gave more than $100,000 to Norris’ venture in 2017, said he was told Rinehart was the biggest investor in the entity.

“Gina Rinehart was the big name he kept dropping,” he said. Douglas, who says he is still owed $120,000, said he realised something was wrong when after months, Norris had not spent money on website developers and had not matched his $100,000 contribution to the entity despite expectations that he would.

Douglas said it got worse about eight months into the venture as Norris started becoming desperate for money. “Michael Norris asked me what was the largest amount of money I could come up with at the time. I explained I only had about $6,000 to my name. He said if I transferred him $6,000 on the day, he would give me an additional $6,000 in 90 days as he was expecting a large amount of money to be coming into his … International News Network,” Douglas said about one instance. “I followed up this money over and over again.”

“Gina Rinehart was the big name he kept dropping.”

Blake Douglas, investor in Norris’ business

Norris’ own history as a media owner was a reason people believed in the business. In 1995, his firm Unitel paid $2.3 million for Brisbane radio station 4BH before selling it two years later for $11.7 million to APN News & Media. He also owned Ipswich’s Mix 106.9 FM, served as a partner in the Star Broadcasting network and served on several company boards. He was also active in local government, where he formerly chaired Brisbane Marketing and the city council’s economic development committee.

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Norris drew on his deep media connections to promote his new business venture. Over more than 10 years, radio company Southern Cross Austereo, Flight Centre founder Graham ‘Skroo’ Turner, former editor-in-chief of The Australian, Chris Mitchell, Crikey editor-in-chief Peter Fray, editorial director of The New Daily Bruce Guthrie and former newspaper executive Shane Rodgers, were referenced by Norris as people or groups interested in his venture or who had invested. Multiple people who spoke to this masthead said this the way they were convinced the organisation had a future. Mitchell and Fray did not invest in the entity, while Rodgers ended up being owed wages and superannuation.

Gillies said of his own experience: “I was engaged on a consultancy basis to create and execute an editorial strategy. I was initially described as its editor in-chief. I was later referred to as CEO but was never actually provided with the necessary levels of authority or transparency to carry out the duties and responsibilities associated with such a role.

“I understood that was to happen sometime after the official launch. The launch has not happened. Until then, all actions were subject to approval by the CFO and Michael Norris and delivered on the assurance the company had the financial capacity.”

Documents also show Norris sought to convince international news organisations, including Johnston Press, publisher of The Scotsman and The Yorkshire Post, to invest or take part in his venture.

Norris and his associates have launched multiple iterations of News.net under different holding companies. The earliest version of the outlet traded under News and Sport International, according to people who invested and documents viewed by this masthead. The company became International News Network with new shareholders, and was registered in the British Virgin Islands (it has since been de-registered). The most recent company behind News.net did not have a name (just an ABN), according to ASIC records, while the domain name was registered in the British Virgin Islands.

Other people who invested in the company and its assets, who requested anonymity to speak freely, said the complexity of the situation was due to the fact multiple people believed they were investing in assets – website domain names – without knowledge of one another. A number of investors tried to exit the ventures because of alleged breaches of agreement, namely never launching a publication or failing to pay invoices. They say they are still owed money.

Norris, who was declared bankrupt in 2006 and again in 2016, is not listed as a director of any companies he has claimed to be associated with. However, according to documents seen by this masthead, he has corresponded with investors over the past decade and is the person who staff in 2022 describe as “chairman”.

Property valuer Peter Smith said he and his friend Jim Martin were sold the business plan in 2010.

“He said newspapers were dead, the only way forward was online and he had the model that would make telephone numbers as far as money goes. To support all that, he had 44,000 domain names in Australia and around the world,” Smith said. “Jim and I invested $250,000 and we both opted for shares in the company News and Sports International Limited.”

“We gave him the money and we never saw a share certificate. Within four or five months he called Jim and I down to his unit and wanted another $50,000. We both thought that was odd. He explained one of the other investors had not been able to put in their money.”

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Smith, who eventually joined the board of International News Network in April 2014, gave $300,000 to Norris who didn’t want to lose control of the company in the middle of a capital raise. Norris promised the news network would launch for more than eight years. He says he is still owed about $500,000.

Smith was a co-investor with Influential Associates, the company which has received a cash injection from Hancock Prospecting. Documents seen by this masthead show Hancock Prospecting filtered $23 million to International News Network through a group called Hopgood Ganim Trust, which then poured the money into an entity known as Influential Associates.

Rinehart and other shareholders tried to wind up the business over concerns about rising debt levels. Creditors notes sent by Norris from August 2015 showed the entity owed more than $US2.3 million to a range of suppliers and consultants, including more than $100,000 to Agency France Presse, $99,047 to Amazon Web Services, $185,904 to CBS Interactive, $126,000 to Bloomberg and $46,813 to the ABC.

But correspondence between Norris and his investors show that he continued to try and raise funds from new parties until as late as 2019.

In 2016, Norris was forced following a civil trial in the District Court of Brisbane to pay damages to two companies and a man called Danny Sammut, who were convinced to invest in News and Sport International in 2013.

“The plaintiffs were persuaded to invest a significant amount of money in a business referred to as NSI by the second defendant, which they said was on the basis of promises by the second defendant that the investment would greatly increase in value because a big investor was coming on board,” the court judgement says. ” The project was to establish an internet-based news service, and the plaintiffs were told that a large number of domain names had been acquired.

“They were supposed to have their investment in the project secured by having some of these domain names put into their names, but the plaintiffs maintained that that never occurred, and indeed they never received any documentary proof of ownership of any shares in any company associated with the project.”

Queensland entrepreneur Mason Fok, who began working with Norris in 2013 as a contractor, went as far as filing a police report over theft of his domain name. He has not had an update from the police for several months.

“Michael Norris managed to amass $187,000 worth of debt with me for unpaid wages, interest on contract breaches and even News.net expenses on my personal Visa card,” Fok said. “I was told I’d be paid and that international payments had been made though delayed due to new international money wire laws. I later came to discover through others impacted by Michael Norris that no such payment had even been initiated.”

Norris’ associate Munro, who was a director in 2017 when Douglas invested, told News.net employees in mid-October it had plans to suspend operations because of failure to secure funds. Meanwhile, new details were lodged by Munro in August under the company name News.net Pty Ltd.

Munro told this masthead he had never been involved in previous versions of the site. “[It was] well before my time. My only concern is to get funds from the parent company to pay the wages.”

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