I summarise here, the sixth post in a series, the results of my short but intensive investigation into BBX. It’s simple, concise and damning.
[ORIGINALLY POSTED in February 2017 at http://www.dennis.co.nz/2017/02/6-bbx-a-summary/index.html]
Founder and chief motivator, Michael Touma was a Lebanese who made good in Australia with his French wife Mireille and four daughters.
He called his barter business BBX which mimicked Bartercard in it’s growth strategies. timing in the market place, international growth, member acquisition strategies and much more. Bartercard was a bigger brother more of the corporate ilk and BBX more as a smaller operation, the Touma family kingpins around Michael’s personality and salesmanship.
International growth occurred through the selling of international franchises, New Zealand, India, China, UK, Malaysia, Singapore and so on. Some had pockets of success. Some went through multiple ownership changes. Almost all countries struggled to some degree at some point of their existence. New Zealand, one of the longest agencies in existence never really fired. China took off with a hiss and a roar and got them all excited but then went AWOL. The recent UK operations have built steadily, and the Australian ones have been up and down as various people fed in skills, energy and money.
Michael’s style was to bring huge enthusiasm and positive thinking into a situation; talk big; over-sell and under-deliver. He had the capacity to both create and manage mayhem but left a trail of dissatisfied punters both at a member level and at a management/franchise level. Internal bickering within the family (husband-wife; sibling rivalry and parent-child) was common but they, fostered and promoted the Touma family meme that they, the Toumas, were the only ethical operators out there.
Not entirely so!
Michael suffered a heart attack, became incapacitated and died, leaving his family to take over the reins for the last 14 months or so. After family in-fighting Carolin McDonald (second daughter) essentially took over and currently runs the show, COO prior to her father’s death, CEO and more after.
In Q1, 2017, following a long period of dissatisfaction with both the original terms of Michael’s sale of the Thailand franchise and repeated incompetence and lies from BBX’s new operators, Thailand Agent Cameron McKean resigned then announced this action to the other BBX fanchisees and their staff. Apart from announcing his actions and stating why he was resigning, his internal email detailed fourteen questions that he believed BBX people should ask of their management.
I received a copy of this email via the Tipline, contacted Cameron for a personal run through on his story then contacted BBX CEO Carolin McDonald for her side of the story. I ran this investigation ran for approximately 7 days fulltime and received information from both within and outside of BBX more than sufficient to conclude that 13 of the 14 questions the whistleblower asked had been proven to be based on fact and that several of them indicated very serious issues that related to questionable legal and moral conduct of BBX management. The tenth question was explainable but had a slightly different answer – best described as understandable in the circumstances; representing an important issue [still unresolved] but actually asked in a way that brought “no” for technical answer.
In the course of my investigation I concluded that:
- The claims implied in all fourteen questions could be proven true or were reasonably true – essentially that skulduggery was afoot within the company from the top down;
- BBX management did not provide one piece of evidence to the contrary, let alone any credible evidence of anything;
- On the key issues raised by the questions the credibility of the whistleblower sat at pretty close to 100% and that of the other virtually nil;
- There is a large debt to the NZ authorities, I think under one of the daughters’ personal guarantee;
- BBX has serious cashflow issues, has historical debts unpaid and is probably trading while insolvent;
- There are multiple entities relating to BBX in various stages of bankruptcy and that this is being hidden from members’ and franchisees’ knowledge;
- There existed larger deals such as property and franchises that arguably broke the law and were established to deceive both members and the authorities;
- There are serious deficits within BBX’s key technical solutions (AND their management of critical infrastructure) that are contrary to basic legal requirements i.e. that there are clear grounds for involvement of the authorities;
- Marketing materials to put bluntly are simply BS. China has serious problems for BBX and is a huge mess; Thailand has gone; NZ, Malaysia, India, Singapore are all dead or exist in name only. The numbers of claimed cardholders have no auditing; are arguably mere fabrications and represent nothing more than hype. Reality is a tenth or less of these claims and even then there is a huge difference between a BBX member which is can basically be just someone on a database (sometimes BBX members are simply promotional members who haven’t paid any join-up fee nor have they traded, nor are they someone who will EVER pay anything!) and IRTA’s definition of a member (who has actually traded in the last 12 months).
- Upon investigation the likely probability of action that would either close the business down or put it into external management was ultra high, in the category of “certain”.
- In the circumstances the company (and the currency) would not be able to recover;
- Not many people were privy to this information, including existing franchisees, let alone the members;
- There was credible evidence that multiple actions were either underway or were being planned by more than one entity in more than one country;
- The consequences of even one of these actions causing irreparable damage to the BBX brand and business was again on the level of “certain”;
- The company is (through the words of its CEO Carolin McDonald) embarking on global expansion plans;
- BBX management has little capacity to handle let alone retain its existing international network or let alone an increased operation;
- Proposed growth would be on the back of gross incompetence and dishonesty and thus simply increase the size and reach of the inevitable devastation;
- BBX’s disenfranchised ex-staff and ex-franchisees (including the primary whistleblower from Thailand) were motivated to get the word out to stop further rot;
- Getting the facts out there ASAP was appropriate and necessitated a firm fast notice to the public.
My projections cannot include timeframes of BBX’s demise because I simply do not know enough yet. This series of posts is intended to get the core message out there loud and clear . . . from what I have been able to establish, the end is certainly nigh and for some quite unusual circumstances and reasons it is sure to be sooner rather than later; with a crash, rather than a gradual demise.
I also wish to address the consequences of releasing my investigation. In some cases only a few read my words. In others they are disseminated widely by vested interests. Again, I strongly suspect that widespread knowledge of my investigation here into the BBX world will be a key factor in hastening its inevitable end. Should others take my words and spread them the fallout must be huge, for there is a large pool of currently deceived, misinformed, ignorant and dissatisfied people out there. I don’t need it for I have gone live with enough, but I do expect a deluge of real, verified and supporting information and evidence to arrive as this information sharing occurs.
In my next post I share some reflections on the investigation giving an inside look into the process of digging around in other peoples’ lives and business and extracting reality, when there are competing interests and an intent to deceive. It hasn’t been easy for sure, but the guts of it is pretty simple: BBX has been called to account and found wanting . . . pants down. Their paddyiwack is about to come.
The BBX Investigation Series
- PUBLIC WARNING: BBX Barter (2381 words)
- 2. War Erupts Within BBX Barter (4090 words)
- 3. BBX is Busted – Working it Out (2388 words)
- 4. BBX has big, Big, BIG Problems (1778 words)
- 5. The Demise of BBX (3489 words)
- 6. BBX – A Summary (1308 words)
- 7. Reflections on Investigating BBX (6394 words)
- 8. BBX – The First Criminal Charges (3625 words)
- 9. BBX Crimes – The Significance (2,710 words)
- 10. BBX Causes Problems for IRTA (2,251 words)
- 11. BBX: Rats Off a Sinking Ship (1,715 words)
- 12. BBX Data Security Breach (1,852 words)
- 13. BBX Threatens – Sue Me PLEASE! (1,511 words)
- 14 The BBX Knives Are Coming Out (1,791 words)
- 15. BBX Memberships – Names in a Database (2,774 words)
- 16. BBX UK & The Franchise Show (2,840 words)
- 17. OPEN LETTER 1 – BBX Members (162 words)
- 18. BBX Currency Analysis – 10c/$1.00 (1,527 words)
- 19. The BBX People Speak (11,726 words)
- 20. More Words from BBX People (15,206 words)
- 21. How BBX Did It – Lies & Theft (3,663 words)
- 22. BBX – Winding Down/Winding Up (3,217 words)
- 23. BBX New Zealand Analysis (828 words)
- 24. BBX UK Membership Analysis (1,143 words)
- 25. BBX NZ – Serious Fraud Office (1,261 words)
- 26. BBX – Thailand Member Analysis (1,165 words)
- 27. BBX Minor Countries Analysis (574 words)
- 28. The BBX People (2,290 words)
- 29. BBX International in a Nutshell (295 words)
- 30. The Raw BBX Data (4,463 words)
- 31. BBX Members React – It’s War (5,617 words)
- 32. BBX and Issues of Morality (1,363 words)
- 33. Warning to BBX Staff & Associates (1,944 words)
- 34. BBX Devaluation Helps With Tax Losses (1,269 words)
- 35. BBX Rips Open the Barter Industry (1,237 words)
- 36. MEDIA RELEASE: Barter Tax Avoidance Warning (516 words)
- 37. BBX Whistleblower: Cameron McKean (4,994 words)
- 38. The BBX Investigation Final Comments (1,504 words)
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