This surfer told investors he could save lives and make millions. He did neither

Opinions vary about Hyman, the larrikin South African-born surfboard shaper who is founder and chairman of Nev House. In the surfing world Hyman, 62, is described as a bit eccentric and a nice guy. Others who worked with him say he is a visionary seeking to tackle a global problem.

But Perth businessman Peter McIntyre says Hyman is a man out of his depth, unable to deliver on promises made to those who invested in good faith.

“The fact is it was poorly run, and corporate governance is non-existent,” says McIntyre, who invested more than $US100,000 in Nev House.

I did go through the offer memorandum. The numbers were too good to believe, but I thought if you took a tenth of that, it was still good.

— Peter McIntyre, Nev House investor

“I have written that investment off; I’m loath to say it. Many shareholders are clinging to a faint hope they will get a return on this.”

The former managing director of one-time ASX-listed international uranium explorer Extract Resources met Hyman through a friend. As an active investor and philanthropist, McIntyre saw the investment as a way to unite money-making and philanthropy in a meaningful way.

“I did go through the offer memorandum. The numbers were too good to believe, but I thought if you took a tenth of that, it was still good. My conclusion was they could still kick some goals,” he says.

Who is Nev Hyman?

Hyman was born in Johannesburg in 1958 but grew up in Perth. He started surfing when he was nine and by 13 was making surfboards in his dad’s garage.

By 1975 he started Odyssey Surfboards. Two years later he drove across the Nullarbor to settle in Burleigh Heads in Queensland, the surfing mecca that is home of Billabong International.

Throughout the ’80s and ’90s Hyman’s new company, Nev Future Shapes, rose to prominence as the premier performance-surfboard shaper in Australia. The brand became known around the world.

Hyman was a brilliant marketer, says one surf industry veteran. His surf team was full of high-energy, fast, flashy surfers with ads to match. Fluoro-coloured logos, big graphics and board sprays stood out. Hyman was equally known as a pioneer in the development of an automated shaping process.

Nev Hyman in the 1970s with one of his original surfboard designs. 

In 2005, he closed Nev Future Shapes and a year later established a new eco-friendly surfboard company with Bert Burger called Firewire Surfboards.

A majority stake in Firewire was sold to 11-times world surfing champion Kelly Slater in 2016, though Hyman is believed to have been a minority shareholder by then.

Nev House of cards?

The Nev House story starts on the holiday island of Bali, where Hyman was living in 2013 and trying to get his fledgling idea of recycled flat-pack homes off the ground. There he met another expat, British-born Anthony Morris.

Hyman was allegedly down to his last dollars, having put all his money into a venture called Julien Environmental Technology Pty Ltd, which aimed to make pallets, fences and boardwalks from a composite material of wood fibres and plastics.

Morris is described by those who know him as a chameleon and hyper intelligent. The Liverpudlian allegedly told people he could fly a Harrier Jump Jet, and claimed to have developed a housing community in South Africa under the Nelson Mandela-led government. Bali was the perfect hunting ground for Morris’ next venture since his chequered past was not common knowledge in Indonesia.

Hyman met Morris at a Starbucks on Sunset Road. After that, it took about six weeks for the Brit to work his way into the position of CEO of Nev House (also known as Nevhouse), according to sources.

In November 2013, the pair established Nevhouse Invest Pte Ltd, based in Singapore for tax reasons, and raised an initial $US2.2 million from investors who bought in at different prices.

US-based Elizabeth and Bill Wing put in $US150,000. They were also hired in a research and development capacity to work on a design for an inflatable house and began working with Canada-based engineer Leyland Williams.

“We assembled a team and began working on development,” Elizabeth Wing says from her home in Oregon. “We hosted many company people at home, and Tony and Nev would fly from Bali on short notice, always business class.”

The Wings deposited their cash investment into a Suncorp bank account in Australia called Neva Neva Investments Pte Ltd, which, unbeknown to them, was controlled solely by Hyman. While there’s no evidence that Hyman used investor money for personal expenses, anyone who invested in the Singaporean entity put their money into this account, where business and personal funds were mixed.

From left, former Nevhouse director Hayden Filer, British entrepreneur and philanthropist Robert Epstone, Nev House chairman Nev Hyman and former CEO Tony Morris on a trip to Manila, pitching the prefabricated home idea to the goverment.  

Hyman says Neva Neva Investments was not a personal account but a company account for the Singapore entity.

AFR Weekend has seen documents that show Hyman paid not only staff salaries from this account but also some expenses, such as personal trainer costs and insurance fees, and received his Firewire wages into this account. Other work expenses were paid for on a Suncorp Visa card under Hyman’s name.

The Wings allege that the company immediately defaulted on its service agreement related to their R&D work and never issued share certificates for their investment.

“We did not invest a second time, so they started defaulting more regularly on our contract until they stopped paying altogether,” Elizabeth Wing says.

Hyman and Morris were living the high life in Bali, according to another early investor, Paul Shaw.

Their home base was Canggu, the Byron Bay of Bali, where rich retired expats mingle with surfers in trendy beachfront bars. The start-up’s office was a rented luxury villa with a pool in north Canggu that cost $US4500 a month, a rental agreement with Morris shows.

According to several sources, Hyman and Morris at one stage were paying themselves salaries of $US20,000 a month, while several directors were earning $US10,000 a month. Friends and family of Morris were also on the books and being paid for their services with investors’ money.

Several sources say Morris paid his children at least $US2000 a month for an “internship”, more than four times what a local might earn in a month.

Hyman and Morris set up base in Canggu, the Byron Bay of Bali. Fauzy Chaniago

By September 2014, the Wings and others were being tapped for more money as Nev House sought to raise $US2.1 million in fresh capital to build the first homes.

Glossy pictures in the investor slide pack show poverty-stricken areas and Hyman posing in a slum with plastic rubbish bags. The group said it wanted to be present in more than 50 countries by 2025. Investors were being offered the opportunity to buy in at $US30 a share.

Hyman agrees they had great success in capital raisings but, given the lack of financial reporting and annual meetings, they failed to keep investors informed. “Everything we’ve raised has gone into developing or running the business – nothing else,” he says.

Former first lady of the Philippines Imelda Marcos with Nev House chairman Nev Hyman, left, and former CEO Tony Morris.  

Hyman and Morris, with other directors and associates, flew to meet dignitaries around the world, hoping to secure big government contracts. They met with former Philippine first lady Imelda Marcos and former Vanuatu prime minister Joe Natuman, among others.

But there were problems with the product. Polymer engineer Williams quit as a consultant after making several trips to Papua New Guinea with Morris and Hyman and becoming concerned about the way they were pitching the plastics-based homes.

Williams says Nev House presented misleading information, such as owning a manufacturing plant in Canada, to one potential investor, the Lihir Mining Area Landowners Association (LMALA). He says promoting a house that was engineered in principle but not proven through rigorous testing and construction of a model was not being transparent.

“I don’t know what transpired after I left,” he says. “But simply they didn’t have a product. The Australian consultants were experienced in wood and concrete structures, not plastics, which were the value proposition.”

Hyman and Williams fell out after a 2014 letter, viewed by AFR Weekend, in which Williams outlined many concerns. In his reply letter, Hyman accused Williams of stealing Nev House intellectual property.

However, it appeared the spending of investors’ funds seemed to be paying off. The company told investors that prominent Indonesian businessman Candra Wijaya planned to invest $US2.7 million by October 2014.

Indonesian billionaire property developer Candra Wijaya with former Nev House CEO Tony Morris in 2014. Wijaya had planned to invest $US2.7 million but the deal never eventuated.  

Another big win was LMALA committing to take a 10 per cent stake in the company for $US93.4 million. This mega deal was expected to close in December 2014. LMALA’s income is generated from dividends and royalties from Newcrest Mines.

The pending LMALA capital injection had investor Paul Shaw excited. Shaw was a former senior director of acquisition finance at the now defunct Halifax Bank of Scotland in Australia, where he had worked with some of the largest private equity firms in the country. His contact book and knowledge about securing more capital was needed.

He found the business idea was philosophically and financially compelling and upped his initial investment, pumping in $US100,000. A keen surfer, Shaw was convinced by Morris and Hyman to join Nev House as an executive after they paid for him to travel to Bali in August 2014.

Shaw says that while staying at a beachfront hotel at surfing spot Brawa Steps in Canggu, he was offered a monthly salary of $US10000 and an undefined bonus share plan.

Alarm bells

At 5am on October 24, 2014, Shaw woke in his Tamarama, Sydney, apartment with a knot in his stomach. He had convinced his family and friends to put their hard-earned money into Nev House, but alarm bells were ringing. What was seen initially as an amazing opportunity to make a real difference in the world had turned into a major worry.

Shaw wrote an email that morning to Morris, copying in Hyman and other directors. He outlined his concerns, which included the remuneration arrangements, lack of reporting, non-issuance of share certificates, and the fact that he would be the only executive with actual skin in the game rather than “sweat equity”.

A Vanuatu classroom prototype built by Nev House.   

Shaw says his email was met with defence and hostility, which prompted him to walk away from the business. His family and friends did not invest, but he is still chasing his money. He is not the only one.

Shaw says he now realises Morris was looking to leave his past behind by starting life in Bali. “I did everything against what I was trained to do,” Shaw says. “I found out about Tony’s past while in Bali. He had been cleared by the courts. But I was drinking the Kool-Aid.”

In 2011, Morris had been extradited from Sydney’s northern beaches to Britain to face criminal charges over a £52 million fraud in connection with superannuation trustee company GP Noble Trustees. It was one of the largest corporate scandals in British history. Morris was acquitted in the criminal trial in 2012, but some of his associates went to prison.

The fallout

By 2016, neither Wijaya’s funds nor the capital injection from LMALA had materialised, despite a shareholder agreement being drawn up and invoices requesting LMALA’s $US27.47 million payment for 1000 homes be paid into the Neva Neva Investments account in Australia.

Hyman tells AFR Weekend that Morris was recruited for his expertise to build fast-growing companies.

“He sold himself to us and we naively took him at face value and believed he performed well on all aspects of running the company,” Hyman says. “My role during this time was doing what I do best: brand building, marketing and development, and I was not involved in day-to-day finances.”

In January 2016, Morris was ousted from Nev House for allegedly misappropriating funds and for failing to disclose he was disqualified from being a company director in the United Kingdom for 10 years, relating to a matter in 2005 that was not linked to GP Noble.

According to his termination letter, which has been seen by AFR Weekend, he allegedly failed to disclose he was an undischarged bankrupt. The letter reads that in Singapore, “It is an offence for an undischarged bankrupt to be appointed a director or to directly or indirectly take part in the management of any company.”

The company also “raises serious concerns” about Morris’ “moral turpitude” for allegedly selectively disclosing he was acquitted of criminal proceedings in the pension fraud case, but failing to disclose that in an earlier 2010 civil case related to GP Noble that he was found liable for £52 million, and Morris had “created and orchestrated a fraud upon a pension scheme”.

Morris – who did not respond to interview requests – also allegedly charged personal expenses to a NAB Mastercard provided by Hyman for corporate expenses.

Unpublished financial statements for the Singaporean entity, obtained by AFR Weekend, show that a company controlled by Morris, Skywalker Invest Pte Ltd, and another called Nev House Rumah Pty Ltd were paid nearly $US2.1 million and $US1.8 million respectively in the financial period ended October 31, 2014.

The Nev House cyclone-resistant shelter designed by Nev Hyman and Ken McBryde. Ted Grambeau

Skywalker “provided management services” to Nev House. Nev House Rumah “provided accounting, treasury and system services to the company” and was controlled by Hyman and the parent company.

It took 12 weeks and more than $100,000 in legal fees to oust Morris.

Deloitte consulting partner Gordon Irons, who had been consulting to the company for more than a year, became Nev House CEO in early 2016. Shaw, who had wanted to improve corporate governance, had introduced the company to Deloitte.

Irons says: “I loved the story and their clarity of purpose. I took it on a pro-bono basis initially at Deloitte to help them commercialise their philanthropic vision.”

The Singapore venture ceased operations in December 2015. A new Australian private company was formed in January 2016, Nev House Pty Ltd. In March, it was reorganised into an unlisted public company, Nev House Holdings Ltd.

Irons says that after taking the top job he challenged Hyman on the way investors’ funds were being used on junkets, flying business class around the world and paying people who were not creating value for Nev House.

He says there was pushback from potential new, sophisticated investors from his contacts who liked the idea of Nev House but wanted to see their funds used to grow the business based on realistic valuations and forecasts, and not pay salaries to the founder.

His relationship with Hyman soured quickly. Within a year, Irons was let go amid claims he failed to deliver on capital-raising targets. Irons sued Hyman and Nev House over wrongful termination, and the matter was settled after he received a nominal $140,000 payout.

Irons defends the package he secured when he signed up as CEO, comprising a $500,000 salary plus up to a 300 per cent bonus based on the capital he secured for the company and meeting annual performance targets. He was also offered 10 per cent equity in the business.

He believed at the time there were several contracts in hand that would have underwritten the sum, including one to build 40,000 homes in Vanuatu, and an existing project funded by a Hong Kong-based philanthropic organisation to build 15 cyclone-proof houses on Tana Island, Vanuatu. This project, which provided a small margin to Nev House, was completed in April 2016. It is the only contract executed.

Hyman calls hiring Irons a “misstep”. He gives no reason for the large Vanuatu opportunity disappearing. But he says the PNG deal was scuttled as a result of LMALA’s change of direction. “They reneged on the contract,” he says. “While these would have provided significant revenue to the company in its early stages, they didn’t materialise. However, we are continuing our sales and marketing push with our new product.”

Despite the bumpy road, Hyman’s passion for the project continued. In 2016, the company won two Good Design Australia awards, followed by The Duke of York’s Pitch@Palace Global award for entrepreneur of the year in 2017.

Before then, Hyman tried to establish several new funds including the NevEarth Fund in Luxembourg in 2017 (which failed). In March last year the company launched the NevEarth Qualified Opportunity Fund, which aims to raise $US30 million for investment into and immediate expansion of Nev House with its first US-based processing facility.

The company has pared back its lofty aspirations of becoming a multibillion-dollar group to being hopeful of selling 10 modular housing kits this financial year.

Hyman believes the company is in a strong position, and says all company directors and executives are working on a deferred income basis and/or performance-based remuneration.

“I’m sure many people would have given up by now, but I’m committed to see this through for a product and business that can help humanity and eventually reward shareholders,” he says. “Anything great in life doesn’t come without hard work, stumbles and adversity.”

US investor Elizabeth Wing says nothing the company ever promised has materialised.

Kirk Pengilly and Layne Beachley are still investors. James Brickwood

“There is no factory, never has been a factory, there is no inventory, there are no sales. There is simply investor presentation after investor presentation,” she says.

By early 2017, Perth investor McIntyre alerted ASIC about concerns over communication, lack of financial reporting and governance issues. His complaints were not acted on.

“It bothers me immensely that he [Hyman] is still out there raising funds,” McIntyre says.

Hyman admits the lack of corporate governance and communication has dogged the company, but insists he has acted in good faith and in the best interests of investors.

“As a surfer and someone who built businesses around my passion, I’ve always relied on others to look after this aspect of the business,” he says.

“As the founder of Nev House it’s always been my vision to build a company that does good for humanity while providing returns for investors. Philanthrocapitalism is a term we’ve often used to describe the model, and I’ve worked damn hard to achieve this.”

Hyman claims he has not drawn any wages for the past four years, and has borrowed money or sold down his personal shareholding to provide working capital to assist the company.

When asked about high salaries paid in the early days, he acknowledges that from time to time he drew wages based on advice from the CEO. “Perhaps the digital age of social media and internet companies making billions in a very short timeframe has skewed today’s investors thinking that anything they put money into will do the same,” he says.

“Many great initiatives that are now part of our everyday lives have taken decades to come to fruition, and Nev House will continue to work hard to become one of these.”

AGM season

Until December, Nev House had held only one AGM: in 2017. The recent AGM involved 45-odd investors on a two-hour conference call and covered 2018 and 2019.

Hyman was re-elected as chairman and as director. Newly appointed directors Leon Stephan and Austin Whittaker (who is also the new CEO) were voted in as directors.

Hyman says prior to the current board, there was lack of appropriate knowledge and expertise.

Former Mirvac executive Flowers questioned Hyman’s qualifications to be a director. Hyman admitted he had no formal qualifications, but he did have a long history with Nev House.

McIntyre, Beachley, Pengilly and the Fitzgibbon brothers were also on the line. Queenslander Kacey Bridge, a former director and the single largest investor who has put in more than $2.1 million over the years, was also on the call, as was Shaw.

Hyman says he has plenty of supporters. AFR Weekend spoke to one major investor who remains a backer but declined to be part of the story.

Others have long been sceptical. In a 2017 email, Flowers wrote: “As night follows day there is nothing more certain than the fact that this is headed for the ‘dust bin’ of failed corporate ventures.”