Mr Gale said the company Mr Rockman invested in failed during the GFC “as did many companies in the tech and venture space. This is unfortunately a normal part of venture stage investment”.
Mr Gale’s business dealings span four continents and more than three decades. The 58-year-old has spent much of his time living out of five-star hotels and former co-workers say his personality was his greatest asset.
“Michael has a very energetic, effervescent, charismatic, very confident, alpha male charisma. People like that,” one former colleague who worked with him in Switzerland said. “I’m not surprised that he has always been able to have good relationships that led him to good business opportunities. The question was – can he deliver on what he promised?
“In hindsight, there were a lot of obvious signs that things were generally, quite often going pear-shaped.”
Mr Gale now runs his latest endeavour from Byron Bay – First Penny Investments and its website lists 16 start-ups as clients. One client, who was not authorised to speak to the media, said Mr Gale had also promised money from World Investments – the Dubai-based group that Xinja claimed to have a deal with.
“When I heard about what happened to Xinja, I was not surprised at all,” said the client.
The client said his company had paid Mr Gale more than $80,000 in consulting fees over the past 12 months but no one had been introduced to World Investments representatives and no money had materialised. “He promises everything under the sun, but has delivered zero.”
Xinja maintains its board met with World Investments directors Zayed bin Aweidah and Omran Rashed Abdulla Rashed Al Nuaimi on multiple occasions over two separate visits to Dubai.
Mr Gale said he is not an agent of World Investments and would “never promise investment to anyone”.
“We perform capital raising services, one of which is to introduce companies to investors. World Investments is one of a number of investors we introduce clients to,” he said.
“A number of those clients have travelled to Dubai and met with World Investments. From there it is between the companies and World Investments.”
Ilmars Draudins, who holds the financial services license that First Penny is sub-licensed by, has oversight of Mr Gale’s business dealings. “He had a number of deals, I’m not aware of any that have reached a conclusion,” Mr Draudins said.
Mr Gale confirmed he had not processed any deals for his clients over the past 12 months, but said COVID-19 was to blame.
“Like the rest of the world, we are anticipating 2021 to be a better year,” he said.
First Penny’s Australian client said Mr Gale had inflated the company’s financial position in a pitch deck presented to investors, claiming revenue would exceed $100 million in four years and expand operations globally. “No business could grow like that off a standing stone,” he said. “It was incredible, I’ve never seen anything like it.”
Mr Gale denied this, claiming financial projections were based on information provided by his clients.
Mr Gale has also left employees claiming unpaid wages in his wake. One former business partner, Amjad Bakir, was hired by Mr Gale to work with Abu Dhabi-based firm Kherlen Trading in 2017 but after eight months of full-time work, Mr Bakir says he was never paid. Once Mr Bakir started to complain, he says Mr Gale disappeared.
The Age and Sydney Morning Herald has obtained court documents filed by Mr Bakir against Mr Gale in the United Arab Emirates however these proceedings have so far been unsuccessful.
“I have kids, I have school, I have cars, credit cards, I have everything. When you stop earning for a couple of months, you need to leave the country.”
Mr Gale denied Mr Bakir’s claims. “It is correct he made such a claim which we denied categorically as it was simply not true and the Court appointed an expert to review the matter and then found in our favour and dismissed the case.”
Mr Bakir, who now lives in Jordan, said he was drawn in by Mr Gale’s lifestyle. “He would always have the most expensive champagne, the most luxurious hotels, go on skiing trips.
“When people used to see him they think he has a lot of money.”
However, not all business partners agree with the criticisms. Start up Comestri founder Frank Nesci said Mr Gale was instrumental in finalising a 2018 deal and remained positive more cash is on the way.
“Raising capital is always an interesting game. Not everyone has the same mandates and foresights and visions of what a company can delivery in the future – it’s alway crystal ball gazing, he’s been very helpful in providing guidance and advice.”
“Unless you’re one of the shining stars of the community, the Canva or the Afterpay where people want to get on the bandwagon, when you’re a new business idea, there are some people who want to bet on you and others sit on the fence, others pull out at the last minute.
“It’s a challenging business.”
Charlotte is a reporter for The Age.