Intoxicated by the opportunity to play one of the world's most prestigious golf courses at California's Pebble Beach, stroll the beaches of Hawaii or mix with the uber-wealthy at luxury hotels in the Middle East millionaires' playground in Dubai: This was all on offer for a bunch of small-time accountants being courted to put their clients - superannuants - into an investment in start-up music streaming company Guvera.
More than $185 million has been raised since 2010, thanks to a network of accountants who were lavished with these opportunities to attend seminars hosted by AMMA, the private equity promoter and major shareholder in Guvera. It appears these accountants, who were advising self-managed super funds on investments, were also receiving incentives to put their clients' money into Guvera. AMMA, jointly owned by its founder and chairman Darren Herft, has profited handsomely from raising equity and debt for Guvera, which pays a 10 per cent commission for cash raised from investors and 5 per cent for any debt raised. 
(Herft also ran AMMA Private Investment, which Bendigo and Adelaide Bank was threatening to wind up in the wash-up of the infamous failed Great Southern forestry investment scheme.) However, the extent to which these generous commissions to AMMA were used by it to incentivise accountants to push investments in Guvera is not clear.
Herft told Fairfax Media this week that "from a Corporations Act point of view everything we are entitled to do we may have done, if we have done so, if we have made a payment, we may have made payments in line with the Corporations Act". He has reportedly disclosed that some advisers and accountants, who directed clients towards an investment in Guvera, received share options.
However one thing is abundantly clear. Guvera, which is now looking to raise between $40 million and $100 million via a public listing on the ASX, is in a parlous situation. Despite the millions that have been pumped into this start-up over the past five years, it is hemorrhaging funds at an alarming rate. It reported a loss of $81.1 million last financial year on revenue of $1.2 million. In the first half of the current financial year Guvera has already lost $55.7 million, which, if annualised, suggests a full-year loss well in excess of $100 million.
The company's prospectus makes no projection about future profits. By way of contrast, the total in commissions paid to the promoter AMMA is more than $22 million.
If the Guvera public float gets off the ground - an outcome that must have a large question mark attached to it - the firm gets a commission rate on funds raised of 5.7 per cent (which will rake in $5.7 million if the full $100 million upper limit of the capital raising is reached) plus an additional $450,000 to $600,000 for promotion and marketing.
Guvera's prospectus states that even if only the minimum $40 million is raised, $6.6 million will be used to pay transaction costs, $17.2 million will go to creditor repayments and $4.5 million will repay debt. These amounts tower over those that will be invested to develop the music streaming business.
Meanwhile, the Guvera prospectus reveals that a related company - which is controlled by the parents of one of Guvera's non-executive directors, Steven Porch - has lent the music streaming business more than $7.5 million - debt which is now in default and attracting interest of 20 per cent.
The position is no rosier when it comes to paying other creditors.
The prospectus reveals the company last year made a contract with a multinational bank (JP Morgan) to raise $100 million of private equity funds, but the funds did not eventuate. Despite AMMA raising $40 million for Guvera that year, it still experienced a cash shortfall, which forced it to enter into a $19.5 million repayment program with suppliers and key creditors, including the Australian Taxation Office.
The risk is now firmly with the accountants and their clients if the ASX listing does not go ahead. The loophole in legislation that allows accountants to make recommendations to clients on, among other things, the operations of self-managed super funds expires in   July - which would seem to be jeopardising AMMA's ability to continue to tap this source of funding.
Advisory group Rivkin sums it up neatly: "While it's hard not to be sarcastic when it comes to Guvera, there's a very serious side of this with regard to how investors in Australia part with their hard-earned cash."