The failed startup, the Candy brother and the £100mn lawsuit

In 2021, an ambitious technology entrepreneur made plans to host a football competition featuring global superstars Cristiano Ronaldo and Lionel Messi.

Robert Bonnier planned to spend an estimated €80mn-€110mn to recruit the world’s top players, according to documents seen by the Financial Times. “The Fans Cup”, to be held either in London or Cardiff, would focus attention on Bonnier’s company Aaqua, a social media start-up.

Bonnier says The Fans Cup was an earlier project not connected to Aaqua. But in one version of the plans, fans would be able to vote on which players would feature. In another, Aaqua would charter an Airbus A380 at $35,000 an hour to take guests from Sydney to the match in Cardiff, with lavish stopovers en route. People representing both Messi and Ronaldo had “expressed interest” in the competition, the plans stated.

The Dutchman, a serial entrepreneur and financier who first rose to prominence in the 1990s dotcom frenzy, appeared to have good reason to be so bullish. Aaqua — a platform on which users with similar interests could connect with each other in “passion communities” — was, he claimed, attracting potential interest from Apple and luxury goods conglomerate LVMH.

Aaqua seemed to be a project perfectly tailored for the moment. Entrepreneurs like Bonnier were riding the coat-tails of the boom in US tech stocks, while European investors were keen to unearth potential homegrown tech champions that might one day challenge Wall Street’s giants.

One of those investors was property magnate Nick Candy, whose Candy Ventures vehicle put money into Aaqua. Another was All Active Asset (AAA), a London-listed investment firm specialising in technology.

The football match never took place. In 2022, Aaqua made most of its staff redundant and its Singapore-based holding company sought protection from creditors while it restructured its debts, leaving investors like Candy and AAA facing heavy losses.

The 54-year-old financier is now mired in a bitter court battle with Candy, who says Bonnier misled him about Apple and LVMH’s interest in order to convince him to invest.

“He has played me completely,” says Candy, who briefly obtained orders from a London court to freeze Aaqua’s assets worldwide.

AAA has also taken legal action against Bonnier, claiming he still owes around £1.2mn after taking a short-term loan from the firm. It won a UK High Court judgment against Bonnier and his wife, Nashida, in December and has begun bankruptcy proceedings. However, the Bonniers argue they are resident in the United Arab Emirates and the UK court does not have jurisdiction.

Bonnier has denied fraud, telling the FT that Candy’s allegations were “la-di-dah bullshit”. He is countersuing for around £100mn-£150mn of damages caused by the freezing orders and has said in legal filings that Candy’s claims were “spurious” and “based on imprecise alleged information”.

But the ongoing courtroom battle is a salutary warning about the risks of investing in a sector known for its high failure rates where executives routinely promote their projects with a hard sell.

Bonnier started his career as a London-based corporate financier at a Swiss bank, but became more widely known as chief executive of Scoot.com.

At its peak, the listed internet directory was valued at more than £2.5bn and attracted investment from French media conglomerate Vivendi. Scoot eventually ran out of money and was sold to telecoms group BT for just £5mn in 2002.

The following year Bonnier was reprimanded by the UK’s Takeover Panel over dealings in the shares of office space company Regus. In 2004 he was fined a then-record £290,000 by the UK’s financial regulator for making inaccurate disclosures about the trades.

After a spell working in Asia, he set up Aaqua in 2020, aiming to make it a more inclusive, safer form of social media than the “faceless platforms” operated by US tech groups.

Former employees say prospective hires were offered generous salaries and told that Apple was about to invest or was a strategic partner. Bonnier has been described as a consummate salesman. “He’s got a gift, he’s such a convincing personality,” says one person who worked with him.

He appeared to be working all hours and travelled frequently to Dubai and Singapore, often flying by private jet and staying in top-end hotels, including the Mandarin Oriental in Dubai, which he frequents so often he has mail delivered there. He says these trips were at his own expense.

He would frequently drop into conversation the big-name executives he had met. In one instance, having suffered a mild heart attack, he told associates how Apple chief executive Tim Cook had recommended a cardiac specialist in California for him. But according to a Bonnier court filing in connection with Candy’s action, his sole interaction with Cook was a 10-minute meeting in 1999, long before the American became CEO.

According to court documents filed by Candy, Bonnier claimed that Apple would buy 9.9 per cent of Aaqua through a share swap in January 2021 followed by a further 20 per cent later, in a deal known as the “Dante plan”. Bonnier categorically denied that in his defence documents.

A separate budget plan, seen by the FT, shows Aaqua expecting an $800mn investment from Apple. A detailed draft memorandum of understanding between the two companies, to be signed by Bonnier and Apple’s chief financial officer Luca Maestri, was drawn up. The plans for The Fans Cup state that Aaqua would become “a hosting location for all of Apple’s football content”.

Bonnier denies misrepresenting Apple’s potential interest in Aaqua. Apple declined to comment, but a person familiar with the company’s thinking says that it “did not invest in this company and never planned to”.

LVMH, the luxury goods group controlled by the billionaire Arnault family, was also presented as a potential investor, according to Candy’s court filings.

But Bonnier’s interactions with Bernard Arnault and others consisted mostly of encounters at social events, including one in Paris in 2014. His court filing says that these were “reasonably large gatherings where discussions were mostly of a social, cultural, musical nature”. No investment was ever made by LVMH.

LVMH also declined to comment.

However, some investors were attracted by Bonnier’s vision, allowing Aaqua to raise tens of millions of dollars worth of funding. Nick Candy, who with his brother Christian had led the development of London’s luxury One Hyde Park complex, sent his right-hand man Steven Smith to meet Bonnier in around August 2020 on the Côte d’Azur.

Bonnier told Smith that Apple, along with either LVMH or the Arnault family, were planning to invest around $1bn in Aaqua, according to Candy’s court filing, although Bonnier denies saying this. The same filing states that he later sent Smith a document in which Apple and LVMH were described as “founding” partners and in early 2021 forwarded a draft agreement between Aaqua and Apple.

Joel Hogarth, managing director at Aaqua’s adviser Eliot & Luther, told the FT that Aaqua “believed its social media proposition would be attractive to companies such as Apple and LVMH, and admits it used them as examples in generic corporate materials”, but that it “never at any point made any legal representation that any particular company had made a commitment to invest”.

“The ‘founding partners’ were what Mr Bonnier believed and believes would be organisations that would become part of the Aaqua proposition” once it had demonstrated proof of concept, Bonnier said in a court filing.

In February 2021 a deal was reached for Candy Ventures to exchange £6.75mn of shares in Audioboom — a listed podcast publisher part-owned by Candy that Bonnier thought could be a good business fit with Aaqua — for Aaqua shares and the option to buy €10mn more.

Rodger Sargent, previously an executive director at AAA, was another enthusiastic backer and by the end of 2021 the investment firm held a 32.5 per cent stake in Aaqua. Sargent described the interest as potentially “transformational” for AAA and joined the board of Aaqua’s UK entity.

Bonnier also wanted to engage the businessmen David and Simon Reuben, who had made an estimated £24bn fortune in property, metals trading and shipping.

According to an announcement dated November 2021, which appears to have been drafted by Bonnier but was never issued, an investment vehicle called RB² owned jointly by Bonnier and the brothers would become AAA’s largest shareholder.

When asked whether the Reuben brothers ever had any involvement in such a venture, a spokesman replied “a clear no”. Bonnier told the FT that RB² was “an invention of Sargent” and that he had “made it crystal clear” that he had never met the brothers.

Bonnier handled meetings with investors himself, and employees say they saw few signs of who he was meeting. Despite his grand vision, they were increasingly having doubts.

It was “the weirdest company I’ve ever worked in”, says one former staffer. “I kept wondering where’s the product?” A version of the app was released to a limited group but not to the public.

Bonnier “was always saying he was working 24/7, but I couldn’t work out what was going on”, the person adds. Others questioned why the company had a large content moderation team in Singapore.

In late 2021, Aaqua appointed Colin McQuade as a director and Maria Bista as group chief operating officer. Both had worked in senior executive roles at Barclays and Sky, but things quickly turned sour as the new arrivals became concerned about the company’s business plan.

A meeting between McQuade, Bista and Bonnier in early 2022 descended into a heated row in front of a busy dining room at the Dorchester hotel, according to people who observed the incident. Bista and McQuade resigned from the company after this episode.

By the end of 2021 the company was burning around $4mn per month, according to documents seen by the FT, and conditions were becoming tougher for employees. Staff members fell in and out of favour, according to those who worked with Bonnier, and he could quickly lose his cool and shout at them.

In a January 2022 email, he asked executives for their suggestions on a message he proposed sending to senior staff criticising “humanly disrespectful” expenses claims.

“Do you know/realise how much time needs to be squandered for someone wishing to claim for a stupid cup of coffee or dubious taxi journey — it’s utterly insane,” he wrote.

After January 17, all employees’ expenses would be automatically rejected. “Most if not all of you receive more than generous pay packages and yet it never ever seems to be enough,” the email went on.

The company told the FT that “like any person at the head of an organisation”, Bonnier had to ensure staff understood “that they needed to be fully transparent and accountable”.

Meanwhile Candy, whose Aaqua shares had since been exchanged for shares in AAA, was growing nervous. In June 2022 he demanded Aaqua provide a full account of its dealings with Apple and LVMH, but did not receive a response.

Fearing that Aaqua would sell its remaining Audioboom stake, which would depress the company’s share price, he briefly took out court orders freezing Aaqua’s assets.

These were later discharged after Candy failed to put up £1.5mn that the court had requested, but in a message to staff on July 29, Bonnier said the freeze had left Aaqua “legally unable” to pay salaries. He added it would apply for legal relief to pay employees.

“There is nothing and nobody that can or will stop us in accomplishing our crucial mission of becoming a lasting force for good around the world,” he said.

But the pressure was beginning to tell. In one virtual town hall, software engineer Gert Nelissen queried the lack of communication. “Are we being scammed?” he asked Karin Clarke, chief people and culture officer. “Is Aaqua going to foreclose? Are you still able to look in a mirror?”

Bonnier responded by describing Nelissen as “a first classless [sic] idiot [for] writing and posting a message like this” and added: “As founder and CEO of Aaqua I hereby fire you on the spot . . . I have no f . . . idea what you ever did for Aaqua.”

At the end of August, Bonnier told employees the freezing orders meant Aaqua had to make immediate redundancies. “My overriding personal objective continues to be that you receive your financial contractual entitlements,” wrote Bonnier. But staff were not paid August salaries. Some later took the company to employment tribunals and won awards for breach of contract and unlawful wage deductions.

In October 2022, Aaqua’s Singapore-based holding company was granted creditor protection pending a debt restructuring.

The travails of its main investment left AAA — which had a market value of more than £500mn before it delisted — facing the prospect of substantial shareholder losses. Its directors, including Sargent, were left to field inquiries from angry investors.

Bonnier attempted to secure alternative financing for Aaqua. A Belize-based company, Jati Sejati Investments, told the FT it had been in the process of arranging “a substantial amount” of financing from an investor in the UAE. However, it was unable to do so because of the court order, according to Jati Sejati and an Aaqua court filing in Singapore.

We may be able to work together again to continue Aaqua’s mission

A subsidiary of Mirador FZE, a family office in Fujairah, part of the UAE, was lined up to buy Candy’s AAA shares for £13.5mn, according to a court filing by Bonnier. Candy told the FT he considered the Mirador proposal “illusory” and he had seen no evidence it was actually prepared to make such an offer. Mirador FZE’s owner Diarmuid Clohessy, who had had previous business dealings with Bonnier, could not be reached for comment.

Bonnier had told employees in August 2022 that he hoped “we may be able to work together again to continue Aaqua’s mission”. But last year Singapore high court judge Aedit Abdullah refused the holding company’s application to extend protection from creditors.

In his ruling, he described the valuation of Aaqua’s intellectual property as “rather optimistic” before noting that “the app graveyard is full of costly and expensive apps which have come to nought, despite the best hopes of those involved.”

Additional reporting by Adrienne Klasa