Receivers pore over Callnet accounts
The receivers of Callnet, the crash-and-burn free ISP, are to investigate the firm's accounts for 'possible irregularities,' today's Evening Standard reports.
Administrator Malcolm Cohen of BDO Stoy Hayward said the sale of the ISP (to E-Tel Ventures, a privately-owned firm) had, the paper reports, "freed his team to investigate Callnet's complicated financial history, which is understood to include some apparent accounting irregularities".
Meanwhile, Callnet's US parent company World Callnet is on the receiving end of a lawsuit filed by shareholders accusing directors of "looting the assets for their own personal benefit, and contrary to the best interests of the company and its shareholders", VNUNet reports today.
Callnet launched a free (with dialler rerouting strings-attached) Internet access package in October 1999, the first ISP in the UK to offer such a service. Hundreds of thousands of people registered with the Callnet0800, which ran intermittently at first. Unfortunately Callnet had difficulty paying its bills and withdrew its 0800 service in August.
By now saddled with £7 million in debts, Callnet suffered the ignominy last month of having the plug pulled on its service, albeit briefly, by C&W, provider of its infrastructure backbone, for non-payment of bills.
Callnet put itself up for sale in September and the administrators were called in shortly afterwards.
New owner E-Tel Ventures is retaining Callnet's 0845 pay-per-minute service - subscribers are probably in low thousands. However, it has not revived the 0800 service, which had an estimated 210,000 subscribers. No-one is saying how much it paid for Callnet - but the Evening Standard reckons the sum is substantially less than its £7 million debts. ®