A Fake Acquisition to Prop up a Conman's Crumbling Empire

VVPR is a worthless shell with no revenue or assets, claiming to have an acquisition offer from a company owned by a Pakistani family with a history of fraud, corruption, and smuggling Iranian oil in violation of US sanctions.

NASDAQ: VVPR

VVPR is a worthless shell with no revenue or meaningful assets. The company recently announced deals with eye-watering dollar amounts in a desperate attempt to prop up VVPR and their related investment company, AWN, which holds $30m of worthless loans to VVPR, representing the bulk of the investment company's assets.

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Initial Disclosure: After extensive research, we have taken a short position in shares of VivoPower International PLC (NASDAQ: VVPR). This report represents our opinion and is not financial advice. Do your own due diligence and don't take financial advice from strangers on the internet. Please read our full disclaimer at the bottom of this report.

VVPR is a worthless shell with no revenue or meaningful assets. This is evident in the FY2024 financials:

  • revenue from continuing operations: $16,000
  • trade receivables: $0
  • operating loss: $8.5m
  • net loss: $47m
  • tangible assets:
    • cash: $199,000
    • PPE: $439,000
  • current liabilities: $54m

VVPR has liquidated its assets leaving the company with $30m in debt to a related party and nothing of value.

  • VVPR CEO Kevin Chin is also the CEO of Arowana International Limited (AWN), an investment company he founded.
  • AWN holds $29.1 in loans to VVPR, representing the bulk of AWN’s assets.
  • AWN’s most recent financials show the VVPR loans held at full value, despite VVPR being a money-losing shell with no revenue or meaningful assets.
  • To further prop up AWN, VVPR has continually paid refinancing fees to AWN.
  • When VVPR fails, AWN will collapse with it.

To perpetuate his scam, Kevin Chin has announced a series of fake business deals with big dollar amounts, the latest being a $180m non-binding acquisition offer from Energi Holdings Ltd.

  • Energi is owned and controlled by the Puri family, who have a history of fraud and corruption.
  • Energi is the continuation of a company founded by Irfan Puri, a Pakistani businessman with a checkered past:
    • arrested in Pakistan for corruption and fraud
    • defrauded Pakistan State Oil and was blacklisted from doing business with the state-owned company
    • jailed in Dubai for defrauding a Dubai-based company of $60m
    • smuggled Iranian oil in violation of US sanctions
    • forged documents to smuggle oil and defraud buyers
  • Energi is now ran by Irfan’s son, Mohammad Puri, who has been intimately involved in crimes of his own, and those of his father:
    • smuggled Iranian oil in violation of US sanctions
    • forged documents to smuggle oil and defraud buyers
    • attempted fraud against Pakistan State Oil
    • a UK court found that Mohammad was involved in “high-value” tax evasion and his statements to the court were not trustworthy

We believe the non-binding takeover offer is fake and that the Puri’s have no intention of buying VVPR. Further, the claimed $180m offer is laughable given the financials of VVPR. The company is worthless, has no revenue and there’s no chance it repays the $30m in loans to the CEO’s investment company, AWN.

VVPR Financial Summary

VVPR’s financials show that the company is a worthless shell with no revenue or meaningful assets. The company has been liquidating its assets and all that’s left is $30m in debt to a related party and some used office equipment.

VVPR FY2024 Income source: VVPR FY2024 20-F

VVPR FY2024 trade receivables source: VVPR FY2024 20-F

VVPR FY2024 cash source: VVPR FY2024 20-F

VVPR FY2024 PPE source: VVPR FY2024 20-F

In its most recent financials, from FY2022, VVPR reported $29.1m in loans from AWN. This is the last time AWN disclosed their financials. source: 1 2

VVPR FY2024 PPE source: VVPR FY2024 20-F

AWN’s most recent financials are from 2022. They show the VVPR loans are held at full value:

AWN loans held at cost explanation source: AWN - Annual Report, FY 2022

AWN loans held at cost source: AWN - Annual Report, FY 2022

The loans to VVPR represent the bulk of AWN’s assets.

AWN assets source: AWN - Annual Report, FY 2022

If AWN were to mark down the loans to VVPR, it would be forced to liquidate. Further, VVPR pays fees to AWM to keep AWM afloat. AWM is in the business of extracting value from VVPR, without it to leech off of, Kevin Chin’s house of cards will collapse.

Energi Holdings Ltd is Owned and Controlled by the Puri Family

Irfan founded Energi Europe Limited, a UK company which held his oil business assets as well as his real estate assets in the UK. Irfan owned the company through a BVI company called Arnfield Limited.

Irfan owned Energi UK through a BVI company called Arnfield Limited.

Energi Europe Limited shareholders source: Energi Europe Limited, shareholders

In the Panama Papers leak, Irfan is listed as the sole shareholder of Arnfield Limited.

Arnfield - Panama Papers source: Panama Papers - ARNFIELD LIMITED

Further, in a UK court, the Puri’s claimed that Energi UK owned properties in which the Puri family lived and for which Irfan Puri paid property taxes under his name. source

For a time, Irfan Puri was also a director of Energi UK, but days after the Panama Papers were published, exposing his ownership of the company, he resigned after having been a director for 6 years.

irfan Puri Director of Energi UK source: Companies House UK

On the same day that Irfan resigned, his son Mohammad Puri was appointed as a director.

Mohammad Puri Director of Energi UK source: Companies House UK

The assets owned by Energi UK are the same assets that Energi UAE owns according to its website.

Energi UK owned Terminal One source: UK Companies House

From Energi UAE’s website:

Energi UAE claims to own Terminal One source: https://www.energi.ae/storage.html

Energi UK and Energi UAE are the same company, with the same assets, and operating the same business. We suspect that Energi UAE is a holding company for Energi UK.

The Puris’ Criminal History

Irfan and his son Mohammad Puri have a long history of fraud and criminal activity. Given their pasts, we’re certain that the VVPR non-binding offer is a scam intended to defraud US investors. They have no intention of buying VVPR and the claimed $180m offer is laughable given the state of the company.

Investors Defrauded by Puri’s Capital One Securities

In 2009, Capital One Securities, a brokerage owned by Puri through Energi UK, misappropriated investor funds and used the funds for the firms benefit.

The firm was shutdown by Pakistani authorities

Capital One Securities suspended by SEC source: Pakistan SEC

In 2010, the Pakistani paper The Nation reported that investors lost Rs400m. source: https://www.nation.com.pk/31-May-2010/this-time-puri-deprives-investors-of-rs400m

Defrauded Pakistani State Through Oil Deals

Multiple Pakistani newspapers have reported that Irfan Puri defrauded the Pakistan State Oil (PSO) in a series of oil deals. There were criminal schemes, including:

  • selling watered-down oil
  • selling oil with forged documents to hide the true origin
  • corrupt deals to sell lower quality oil products as more expensive products

sources:

Pakistani newspapers reported that Mohammad Puri was also involved in schemes to defraud POS by selling substandard petrol as more premium products.

https://tribune.com.pk/story/1079298/cargo-rejected-pso-sends-back-ship-carrying-poor-quality-petrol

This was reported in 2016, shortly after his father, Irfan, was arrested in Dubai for fraud in a similar scheme involving smuggled Iranian oil. Irfan and Mohammad worked together on oil deals, and it appears Mohammad took a more central role after Irfan’s arrest.

Irfan Arrested in Dubai for Fraud

In 2015, Irfan was arrested in Dubai for defrauding a Dubai-based company in a $60m deal.

source: https://tribune.com.pk/story/861595/bounced-cheques-irfan-puri-arrested-by-interpol-over-60m-deal

Irfan Puri was ordered by the Dubai court to pay $33.5m to the company he defrauded and a UK court upheld the judgement in a UK civil case against Irfan.

Puri ordered to pay $33.5m source: UK Courts and Tribunals Judiciary

Smuggled Iranian Oil in Violation of US Sanctions

After defrauding the Dubai company, Irfan was sued for his scheme and court records show how Irfan, his son Mohammad, and their associates smuggled Iranian oil in violation of US sanctions.

They forged documents to hide the true origin of the oil.

Smuggled oil using forged documents source: UK Court Judgement

Adding another layer to the fraud, they planned to defraud the buyer, PSO, by misrepresenting the fuel as a higher grade and more valuable product.

Smuggled oil using forged documents source: UK Court Judgement

The fraud fell apart after a bank discovered the parties were in fact smuggling Iranian oil and had likely falsified records. This caused payments to be stopped and the deal collapsed. These details were revealed in court cases both in Dubai and the UK.

Smuggled oil using forged documents source: UK Court Judgement

Conclusion

VVPR is a worthless shell with no revenue or meaningful assets. The company has been liquidating its assets and all that’s left is $30m in debt to a related party and some used office equipment. Management has used the VVPR to perpetuate their ongoing fraud at AWN, the investment company they control. VVPR’s debt to AWN makes up the bulk of AWN’s assets. Despite VVPR’s worthless state, AWN has held the loans at full value in their financials. The loans are worthless and if AWN were to mark them down, it would be forced to liquidate.

In a desperate attempt to perpetuate the fraud, VVPR and AWN have deferred interest payments on the loans until April 1, 2025. Having sold off all its assets and left with no cash, VVPR has no means to pay AWN and the fraud is collapsing. We believe

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