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CPL: Valencia still shareholder, but "no operational role"

in glhf

My previous post contained a brief synopsis of what happened with the CPL in the last few years. I left off pledging to at least make an attempt at getting some more information on the reported business deals around the CPL assets in 2010. This post is the result of that research.

Why it matters

Debts outstanding. Reasonable expectations of trustworthiness. This is why we need to ask questions of the new CPL.

Shuffling papers and mixing ownership around does not erase past debts. And while a very significant portion of those still owed money from the old CPL have likely evacuated the scene at this point and have given up hope years ago of seeing a penny, this new entity should not be allowed our support if they’re not willing to do right and at least attempt to make good on debts that the CPL still has. It doesn’t matter how many times a company changes hands, a debt is a debt. As I see it, if its expected of us to recognize the CPL brand as what it stood for a long long time ago, they need to prove they can be trusted. They need to prove they can be transparent and aren’t constantly playing a shell game with the people that put them on the map in the first place: the gamers.

It matters because the foundation of the new CPL has to be rock hard solid trustworthiness. And to this point, I don’t think anybody can agree they’ve proven that they’re up to that. A lot of folks seem to have taken a ‘wait and see’ attitude towards it – fool me once, etc, etc (ask GW Bush). The problem is that all roads, in this case, seem to lead back to one guy: Scott Valencia, and the gaming community has already been duped a fair share of times by this guy. I thought there was no time to wait and see, we had already done that and seen the consequences, it was time to act.

UPDATE: Sept 2 14:20 EST:

Just received an additional communication from Ryan Schumacher, wishing to clarify a point on the general theme of the old CPL’s debts outstanding. Read more here.

We didn’t buy New World, we just bought the IP (domains, trademarks and codebase) of CPL and CAL so we don’t actually assume any of the debt. We’re going to pay out prize money because we think it’s right but we have 0 legal obligation.

Paper trail

I obtained three documents from Singapore’s business registry agency. As I mentioned in my last post, there’s no documentation to suggest that ‘CPL Digital Entertainment Pte. Ltd.’ actually exists, as referenced in the footer of thecpl.com. I’m still unsure why the copyrights on the site are written in that manner.

My query for ‘WoLong’ turned up two hits –

Business profile – Wolong International Pte Ltd

Business profile – WoLong Ventures Pte Ltd

These are basic business profile documents publicly available from the government of Singapore for a pretty nominal fee.

The first, Wolong International, is a company that went under in early 2009, and doesn’t seem to have any connection to the WoLong Ventures we’re interested in; I pulled the document down just in case, but nothing there.

The second, for WoLong Ventures Pte Ltd, confirms the existence of the company that’s reportedly the owner of the CPL. The first page of these documents are a pretty general rundown of important details like addresses, the last time the company filed annual reports or held a board meeting, and who the officers are. The third page is a list of all the principal shareholders in the company.

In this case, all shares belong to a International Digital Media Pte Ltd. This means that WoLong Ventures is just a front, a shell company, for this other entity. This means more searching, and theoretically this could go on for some time if whoever is actually at the top of this holdings chain really doesn’t want to be discovered. At this point I’m wondering how many licks it’s going to take to get to the center of this corporate tootsie roll pop.

Ah, one…Ah, two….Ah, three….

Business profile – International Digital Media Pte Ltd

crunch… Three.

YONG CHUN TIENG,
WEE MENG SENG ALOYSIUS,
VALENCIA SCOTT J M.

More non-answers than a Sarah Palin interview

In the comment thread of the ‘Meet the Staff’ post on the CPL site, Ryan Schumacher, the new CEO, can be quoted the following (emphasis mine):

The cynicism is to be expected. Nice to see you again KeyHunt. It’s not Josh’s work but it is someone who used to work with Josh :) As for Scott, he is not involved with the company. What you see was developed by Hunter, myself and a very talented design and development team when we took over after Scott stepped down.

This would seem to stand in direct contradiction with what I just came to discover from the business filings. Time to try and get some comment from these guys directly.

I sent this off to the newly appointed CPL management:

Hello Ryan, Hunter-

I’ve done some research that’s led me to believe that Scott Valencia still has an ownership stake in the CPL, by way of being listed as a shareholder in the company that holds all the shares in WoLong Ventures.

I’m contacting you to see if you have any comment on this information, pursuant to the following points:

Involvement by Valencia had been denied in a comment from Ryan on the CPL site. I’d be interested in further explanation from Ryan regarding what meaning should be derived from ‘Scott stepped down’ (from the aforementioned comment on the CPL site). Specifically, I’m curious how a reasonable individual could be expected to think that Valencia would have no bearing on operations, given the previous working relationships with Valencia that all three named CPL staff members have. Further heightening this matter is the fact that Valencia still has a documented stake in the top-level holding company that owns WoLong.

Why is there an apparent attempt to obfuscate ownership by reportedly selling the assets to a shell company clearly setup solely for the purpose of holding the CPL assets?

Why is the new CPL site marked as ©2010 CPL Digital Entertainment Pte. Ltd. when that entity seemingly does not exist (no records could be found for such a company in Singapore)?

Who is Yong Chun Tieng, the majority shareholder?

Who is Wee Meng Seng Aloysius, the other minority shareholder along with Valencia, other than potentially the company’s legal counsel?

What is the nature of the corporation, registered in Singapore, named International Digital Media Pte. Ltd., who now, by way of WoLong, reportedly owns all CPL assets, and lists Scott Valencia as a shareholder?

If you had anything to add regarding the information previously released that the CPL had been previously sold by NewWorld to a holdings group in the UAE, and that CAL had been sold to a holdings company based in the UK, considering that NewWorld seemed to have just completed identical transactions on the same properties, but this time with WoLong, I’d like to hear that as well.

Anything you’d like to add is welcome and would certainly help clear the air on this subject. Thank you in advance for your comments and your time.

I won’t copy the discussion Ryan and I had this afternoon following this message since I didn’t actually explicitly mention that I would publish his responses. If he reaches back out to me and authorizes it, I will post them in full. There’s nothing generally incriminating or out of the ordinary really, but I feel that posting them without his permission would be a small but not insignificant breach of integrity here, and that would make me a massive hypocrite given the subject matter.

Instead, I’ll try to paraphrase what was generally discussed over the course of a few emails. While he kept it very cordial and didn’t go on the defensive at all (or offensive for that matter), he wasn’t refuting any of my findings or conclusions, or filling in any of the gaps that might dissuade me from the conclusions I had already reached.

He did confirm that Valencia still did own shares in the parent company and that he was aware of it, but did say that Valencia had “no operational role” in the CPL. When asked, then, who he as CEO reported to, since there was no evidence that Ryan had an ownership stake in the CPL and would therefore have to report to somebody, he did not comment on it.

I expounded on what conclusions I had already drawn based on what I already did know, to try and see if that would maybe spur him to open up a bit more on whats actually going on behind the scenes. I explained, given the paper trail that I had pulled down, that any rational person with a shred of business sense could reasonably think that Valencia has sold off the equity in CPL and got whatever payday was left in the brand and assets there, but since the buyer likely hasn’t a clue about gaming and wouldn’t know what to do with his new investment piece, also tossed a few shares of the holding company at Valencia in return for him staying on and steering the ship. That’s the rosiest scenario I could come up with in good faith, assuming that there isn’t something more complex established behind International Digital Media.

At worst, we’ve potentially just witnessed Scott Valencia selling the CPL back to himself, if both these companies are merely proxies; while Valencia is listed as a minority shareholder, there’s nothing to say there can’t be an additional agreement between the principals as to how revenue and profits coming into the company would be divided. It very well could be just an elaborate front. I’d like to reiterate – this was pure but reasonable speculation as I figured (considering the misinformation coming out of the CPL in the last two years), that I was merely tossing at the CPL’s new CEO to see if he would confirm or deny something.

What I got back from my insistent prodding were more short replies, written in kind, almost apologetic sometimes and overtly complementary of my investigation in one instance, saying he went hunting down the same trail before taking his position, but revealing nothing of further substance. He only asked that I keep an open mind, hoped I would understand that he couldn’t discuss these matters further currently, and that he would likely be addressing some of these points in upcoming interviews. When asked when these interviews were scheduled and who they might be with, he did not comment.

Trying to reason with him by pointing out that absolute transparency would be the best policy at this point given the opaque nature the CPL has always run under, if gamers are expected to put any trust in this new incarnation of it, did not seem to have much effect. He brought things to a wrap by asking me to judge him on his actions on his position, and to try and put the past transgressions of the ‘old regime’ (my phrase) out of my head.

It’s particularly hard to do that, however, when it’s so easy to connect the dots here. Tonya Welch comes forward earlier this year naming Valencia as the puppetmaster behind last decade’s biggest collapses in gaming, with a narrative that held a fair bit of water despite having a hole or two, which was further validated by the dates that International Digital Media and WoLong were registered. All three named staff members at the new CPL and Valencia have ties back to Games Media Properties. Valencia still owns shares in the holding company that owns the holding company that reportedly now owns the CPL assets, while the CPL’s new management denies his involvement entirely, in a feat of corporate maneuvering that that’s not insignificant.

It would reasonable to cast off all concerns if it were clear just who it is that owns the damn thing, if there were no doubt that Ryan can really be taken at his word that he has complete operational control, and that it was completely clear that Valencia has indeed ‘stepped down,’ ‘moved on to other opportunities,’ or more or less ‘got lost;’ the reality is that none of those things are either clear or entirely possible.

Final thoughts, for now

I’m not going to say, as you might have predicted twenty paragraphs up, that we grab the pitchforks and burn and pillage. No. Part of me says that Ryan’s description of his own intentions are true, that there must be something I’m missing, that this might all be a massive overreaction, and that I should take the bet, long odds and all, that the new CPL might usher in a new competitive gaming Renaissance.

The other part of me wants to short the living shit out of that bet, that all signs point to a remake of a bad movie we’ve already seen, not an original product.

Frankly, it could be both.

So, my request to you is to be vigilant. Don’t get too excited. Keep them at arms length. Think for yourself. And never, never, never stop asking questions. Everything I asked above are questions that absolutely must be answered before I think any faith should be invested into the new CPL, however nice guys they might be, and I hope that they will be forthcoming, soon.

Godspeed-