Red ink sinks green data centre

Update: Next stop, liquidation

An unexpected withdrawal of offshore investment in Melbourne’s multi-million dollar "green" data centre facility ADX1, has plunged the project into administration.

Insolvency specialists Sellers Muldoon Benton have been appointed administrators on to the start-up data centre, which ceased operations in February.

The company, which was launched last October, had secured 6,000 metres2 of space in Port Melbourne and was promising carbon friendly services including advanced managed cloud solutions. It is understood the company had peering agreements with Pipe Networks, and was using VMWare virtualisation technology.

ADX1 was backed by a group of Singapore and Hong Kong based backers, including Singapore based lawyer Randhir Ram Chandra and co-founder and CEO Alan Lam, originally from Hong Kong.

According to sources close to the company, management was advised in mid-January that investors were no longer putting money into the venture, just four months after its launch. The news came as a shock to the Australian team of 17 staff, many highly regarded in the industry, including general manager Stephen Brown.

Sources claim that CEO Lam did not reappear after Christmas and did not address staff about the fate of the company. Staff members are still waiting for news on their entitlements and outstanding pay, and have not been paid since Christmas.

“We, including our GM, have all been left hanging. We have yet to receive any direct communication from our CEO or directors,” one ex-staff member said.

The reason behind the collapse is unclear as according to staff, pre-orders and demand had been high and the project had been moving forward to plan operationally.

An application to appoint a liquidator was due to be heard in the Supreme Court of Victoria on 9 March but it is understood that this date has been cancelled pending an announcement from the administrators this week at a scheduled creditors meeting in Melbourne.

Update:The administrators have moved quickly: late yesterday (Sydney time) they announced that ADX1 was being put into liquidation. A creditors' meeting will be held within weeks. ®

Sponsored: Today’s most dangerous security threats