FLV Fund to cease investment activity

The Flanders Language Valley Fund, the first venture capital fund to focus entirely on applications of speech, artificial intelligence and language technology, has announced that it will cease making new investments and aims to exit all of its current investments by December 31, 2004. FLV sent out a business plan proposal to be discussed at a special shareholders’ meeting on October 26, 2001. The proposal notes that defensive follow-on investments will continue, while operating costs are to be cut to Euro 3m a year. In order to reduce costs, the firm plans to close its Singapore branch, liquidate FLV Asia Pacific Ltd, close its Woburn (US) branch and centralise US activity in Silicon Valley. It also intends to merge FLV Seed Capital Fund Europe NV with FLV Fund CVA. In addition, the decision has been made to decrease capital by Euro 28m so as to allow a first refund to shareholders of Euro 1.36 per share. Since June this year, the total headcount of FLV’s management has decreased from 19 to 14. Those who have left include former CEO, Philip Vermwulen, and Filip Vandamme, former CEO of FLV Asian Pacific Ltd.

The move follows a troubled period for the NASDAQ Europe-listed firm. Not only has the Ieper-based company found itself in an uncertain market due to the difficult stock market climate in general, and of technology-related companies in particular, but it has also been involved in much-publicised legal battles following an embezzlement case in Korea. During 2000, FLV allocated $30m for the development of Lernout & Hauspie’s Korean subsidiary. However, it transpired that the funds had been diverted by the Asian administrators of FLV and had been transferred to Joo Chul Seo, the general manager of L&H’s Korean subsidiary. The event has had a significant negative impact on FLV’s finances, with losses doubling last year to $57.8m. As a consequence of these events, FLV has had a trade halt on its financial instruments imposed by the NASDAQ Europe Market Authority; and it has sought to replace its statutory auditor, KPMG, following an ‘impossible and disturbed working relationship’ caused by the events in Korea. KPMG was the auditor for both FLV Fund and for L&H Korea.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• GPs
• Benelux