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Semantic Software - Artificial Intelligence company wound up by Court Order.

Publication: 
Nigel Morris-Co...
chiefofficersnet

"Semantic Software Asia Pacific Limited (SSAP), an Australian research and development company based in Sydney, has released the first suite of its Semantic Computing Platform, Semantiro, described as a fundamental building block to achieving a complete cognitive environment."

That's what the company said in a press release so laden with buzzwords that we, honestly, have no idea what it's trying to tell us.

Australian regulators have other concerns and this morning ASIC obtained a Court Order to wind up the company and the appointment of provisional liquidators.

The reasons for the Order should be a warning for those buying mission-critical tech from unproven companies. Semantic was an artificial intelligence development company that based in North Sydney.

Actually, there is a sentence in the undated press release that we found idm.net.au, a website for about information and data managers at press release that makes some sense: "This platform promises the ability to enrich the semantics of data collected from disparate data sources and enables a computer to understand its context and meaning."

That's exactly what we want in financial crime risk and compliance software. But we need it to work. We also need suppliers to be well run and financially sound.

The action has been swift: according to ASIC's press notice "On 24 June 2021, ASIC filed an application to the New South Wales Supreme Court seeking orders, which included the appointment of provisional liquidators of Semantic . ASIC alleged Semantic;

- was unlawfully dealing with investor funds;
- was not being properly managed;
- was insolvent or likely to become insolvent;
- had issued shares without compliance with the Corporations Act;
- had issued shares to investors with a share buy-back guarantee in circumstances where the company did not have sufficient funds to meet that obligation; and
- had entered into related party transactions with Mr Mark Bradley (a former Semantic director who is a bankrupt) without shareholder approval."

On 28 June 2021, the Court made orders preserving Semantic’s assets and restraining Semantic, director Mr Duncan Mount and former director Mr Mark Bradley from receiving or soliciting funds from investors and from advertising, promoting, or marketing fundraising for Semantic. The Court noted that material provided to Semantic shareholders failed to disclose that Semantic did not have sufficient assets available to meet share buy-back guarantees and that investor funds had been transferred from Semantic’s bank account to Mount’s personal account.

On 15 July 2021, the New South Wales Supreme Court ordered that Semantic Software Asia Pacific Limited (Semantic) be wound up on just and equitable grounds, and that liquidators be appointed.

Semantic and its directors consented to the making of the Orders.

ASIC's application was on the following basis:

In particular, ASIC alleges that Semantic, an artificial intelligence development company based in North Sydney:

- has failed to lodge financial statements with ASIC, failed to hold annual general meetings and failed to keep accurate financial records and minute books;

- is insolvent or likely to become insolvent; and

- has issued shares without compliance with the Act and has issued shares to investors with a share buy-back guarantee in circumstances where the company did not have sufficient funds to meet that obligation.

ASIC seeks through its application:

- the appointment of provisional liquidators to Semantic;

- orders requiring the provisional liquidators to provide a detailed report to the Court and ASIC that sets out, among other things, Semantic’s financial position so the Court can consider whether it ultimately ought to make orders to wind up the company;

- orders preserving Semantic’s assets; and

- orders restraining Semantic, a director and a former director of Semantic, from receiving or soliciting funds from investors and from advertising, promoting or marketing fundraising for Semantic.

The company's website says "The cognitiveAI Platform is a cloud-based software platform for deriving new levels of business value from multiple data sources. It is a functionally rich platform to manage data and knowledge. The platform is designed to be cost effective, easily deployed and used to simplify complexity while unlocking the power of Semantic Computing. This powerful Artificial Intelligence solution allows users to create a true knowledge base of various sources of data and deploy advanced analytics to uncover previously unknown knowledge and insight."

Like so many tech companies, it doesn't actually say what it does.

But the people behind it are not fly-by-nights. Mount ran the investment company owned by LI Ka-Shing for 11 years: LI has, for many years, been one of Hong Kong's wealthiest tycoons and for a number of those years been feted as the wealthiest. In 1999, Mount started his own investment venture. The others are highly experienced in their fields. The oily bits are provided by Dr Dzung LE, a specialist in "semantic computing technologies."

This is the part I like because this is what I think financial crime risk and compliance software should be doing:

"Read and extract knowledge from traditional sources like databases, text, social media, at astonishing speed.
"Enrich that knowledge by automatically finding relationships with other knowledge they already have."

Whether the company achieved that we may never know.

But there's something else. The media release that we could not understand has a link to semanticsoftware.com. Clicking on that link takes you to cognitivesoftware.com. Same people, different name. The bottom of that page refers to "Cognititive Software Group."

That says "Cognitive Software Group, or “CSG”, is a group of companies that has spent eight years researching the needs of the next generation of computing" and includes a quotation from Tim Berners-Lee saying "“I have a dream for the Web [in which computers] become capable of analysing all the data on the Web, the content, links and transactions between people and computers. A Semantic Web, which should make this possible, has yet to emerge, but when it does, the day-to-day mechanisms of trade, bureaucracy and our daily lives will be handled by machines talking to machines. The intelligent agents that people have touted for ages will finally materialise."

That's exactly what smart contracts are doing today.

For the purposes of this article, the question is this: exactly what is being wound up?

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