‘Bullying’ allegations as Callaghan Innovation director resigns over reports relating to celebrity-backed private firm

Rachel Kelly has quit Callaghan Innovation - and she's not leaving quietly. Photo / Supplied

Callaghan Innovation says bullying and standover tactics became a big problem in the innovation sector, after a director’s resignation triggered controversy.

The Government innovation agency issued an extraordinary statement today after a weekend of speculation and allegations linked to the resignation of director Rachel Kelly and her claim of “villains” in the start-up scene

“Callaghan Innovation took a considered decision to increase its due diligence of organisations from which it procures services following the tragic death of a founder in the startup ecosystem late last year,” the agency said today.

Although nobody was named in the statement, Callaghan appeared to be referring to Kiwi entrepreneur and business education platform Unfiltered founder Jake Millar, who died in Kenya aged 26.

“We were becoming increasingly aware of allegations of bullying and various standover tactics by some players operating in the founder/startup ecosystem,” the agency added.

“Callaghan Innovation has no tolerance of such tactics, and we wish not to procure services from anyone who practices them.”

The agency acknowledged ongoing interest from commentators and blog sites about its procurement process for the founder and startup support programmes.

Some LinkedIn users have posted lengthy comments about these programmes, and about Official Information Act requests directed to the agency.

Callaghan Innovation said concerns about bullying and standovers had indeed influenced some recent procurement decisions.

The agency said it received multiple OIA requests seeking details about these decisions.

“Much detail has been released but some has not, with all decisions made following consideration of clear internal and external legal advice. We did not wish to or seek to withhold this information,” Callaghan Innovation added.

“The decision to not release some detail has caused disquiet from various sides of the debate, including most recently from Board member Rachel Kelly who has regrettably tendered her resignation.”

Earlier today, BusinessDesk said Kelly resigned because of how Callaghan handled due diligence reports relating to private company Manaaki/We Are Indigo.

Kelly quit and posted yesterday on LinkedIn.

“I don’t think I’ve come across a single Callaghan Innovation representative who isn’t passionate about contributing to a better future through innovation,” she said.

“However, over the last few months, I’ve experienced serious conflict over my values and the decisions made by the board, namely regarding the things we learned during recent due diligence activities and subsequent OIAs.”

She said due to irreconcilable differences in values, she had formally resigned as a director from Callaghan Innovation.

“I want any villains and allegations of this situation to be graciously exposed, with proof of what they’ve done, and justice for their victims.”

BusinessDesk understood the issues reportedly related to more than $5 million in Government work during the pandemic.

While Manaaki acknowledges it made mistakes in respect of certain of its partnerships, the firm says it has not behaved unethically or behaved in a bullying manner.

The controversy had been incubating in New Zealand’s innovation sector for some time.

And it reportedly involved allegations Manaaki/We Are Indigo took advantage of start-up founders it was contracted to assist.

"We acknowledge that we made mistakes in the course of these partnerships, and that we needed to improve our processes and performance," Manaaki/We Are Indigo said in a statement.

"However, there was no bad intention on our part."

Manaaki/We Are Indigo shareholders include All Blacks Ardie Savea and Roger Tuivasa-Sheck.

Callaghan Innovation was created in 2013 from the Crown Research Institute IRL.

The agency is named after Sir Paul Callaghan, who was a physicist specialising in nanotechnology and magnetic resonance.