Author Topic: Denials, Defaults & Defamation- Swindon WiFi’asco Down, But Not Quite Dead  (Read 12772 times)

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Offline Geoff Reid

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Blogged here: http://www.geoffreid.com/?p=877



It's been a tension-filled week in the local Blogosphere as Swindons besieged Conservative politicians began to turn a cold war of logical WiFi'asco scrutiny into a hot war of political rhetoric and slanderous hyperbole.

As with most politicians statements made regarding the WiFi'asco,  we have come to expect the party-line is faithfully regurgitated first,  then followed up with contradictory or untrue 'supporting' statements.  I wasn't disappointed with this weeks offering, in fact I was surprised to see that they have also added slander  to the ingredients list, so there must be an election coming.

If there is to be a battle of wits over the demise or success of the WiFi'asco,  it appears that the first three Conservative politicians on the battlefield have arrived unarmed.

Anyway.....

.....On Monday January 17th 2011 I said the following in the WiFi'asco Announcement Imminent - Or Is It? topic:


Quote
"Local media sources, (several of them), have told the Lamplighters  network that they are running out of patience with Director of Digital  City (UK) Ltd and Deputy Leader of Swindon Borough Council, Councillor  Garry Perkins."

When Journalists from different publications have  approached Cllr Perkins, (in connection with articles they are writing),  they are told:  a 'Major announcement' regarding the Wifi'asco is  coming tomorrow, next week, month etc.

The general consensus seems to  be that bad news is on the way but Cllr Perkins is stalling for time.

I understand that John 'Rikki' Hunt has been unavailable for comment for some weeks

leaks (in confidence) to: leaks@talkswindon.org




My phone rang for the first time a matter of minutes after posting the above.  It did not stop rining all day and  I received more than one media email from 'out of Borough'.  It would be fair to say that there is more interest in the toxic miasma of official obfuscation and lies surrounding the Swindon WiFi'asco, than there is in the project itself.

Swindons Conservative councillors are well aware that the WiFi scheme has been lying dead in the water for the last 11 months but, as long as Garry Perkins -  Deputy Leader of the Council, (and also a Director of Digital City (UK) Ltd), was prepared to growl on-cue at any media type wandering into their barnyard, Swindons Tort Councillors weren't about to rock the trough unneccessarily.  Fat, dumb and reasonably happy, (as far as the WiFiasco was concerned),  would be one way of describing the groups attitude towards the WiFi'asco, 'Mushrooms' (kept in the dark and fed on bullshit) would be another.

Much was discussed at this meeting, (more of which will be blabbed about in blogs yet to be written), but the salient point for those interested in the WiFi'asco is that the group apparently agreed that none of them would discuss the WiFi'asco publicly for at least another fortnight.  Readers, (and Conservatives present at that meeting), might wish to ask themselves whether the reason given to justify this moritorium on WiFi'asco discussion was genuine, or just the latest example of a well-used method of avoiding answering awkward questions.

The moritorium on WiFi'asco chatter didn't last long though because,  unbeknownst to the towns Tories as they laid their weary heads down to sleep, Scott D'Arcy of the Swindon Advertiser was already putting the finishing touches to an article which would be published early the next morning - Tuesday the 18th of January 2011:

New investors sought by wi-fi firm

Quote from: Scott D'Arcy
THERE was a fresh twist in the wi-fi saga last night when Digital City announced it was looking for new private investment.

Last night, Mr Hunt confirmed he was still leading the project and  investors were being sought to try and get it back on track.

He said: “The goal is to get the progress that we are sadly lacking.

“We are just looking at financing the business – we have been delayed and now it’s about how do we move forward quickly.

"It would be a great opportunity if we can raise the finance

“It is absolutely key, and it always has been for me, that we get the loan paid on time.

"I don’t think it’s a potential stumbling block so long as somebody’s  got the appetite. I think it’s important that the council stays there as  a partner.



So, let's take a little sideways look at the chronology: On the Monday night Mr Hunt is using phrases like 'investors being sought', 'it would be a great opportunity if we can raise the finance', 'so long as somebody’s got the appetite', but he was not saying that he had found a potential investor, or that one was imminently about to 'buy into' the WiFi.  The date of  Scott's article confirms that Mr Hunt made those comments on the night before the publication of the article, i.e, Monday the 17th of January - the same night that the Conservatives had held their monthly 'group' meeting - during which they agreed not to discuss the WiFi'asco for at least another couple of weeks.

Tuesday morning dawned and listeners to BBC Wiltshires' Graham Mack Show heard Graham talking to Chris Watts about the WiFiasco.  (You can download the podcast of  that interview here).   The interview was described by one listener as: "Great interview this morning on the radio by Chris Watts.  Extremely fair and factual".  I'm not surprised in the slightest by this comment.   Chris and I have spent the last year getting to know the WiFi'asco inside-out,  (using different methodologys),  and I have never known him be anything less than fair, honest or very, very diligent in his data gathering and consideration of the same.

Wednesday the 19th of January: My day started with multiple telephone calls with enquiries from da meedja, all wondering if I thought the WiFi'asco was dead,  had ceased to be,  or was about to become an ex-Wifi'asco.   I told my enquirers that there was a formal Cabinet Meeting of  Swindon Borough Council that very evening, and that they should go along and listen.   I also cautioned them against falling into the trap of asking questions during the 'informal', and therefore un-minuted, part of the meeting.  "Questions", I told them sagely, "should be asked in the second (formal) part of the meeting if you want them to appear in the minutes".  "Mind you", I told my correspondents, "there's no guarantee that your questions, (as they appear in the minutes),  won't be re-written in a manner which flatters the cabinet and makes you sound like an unhelpful dickhead".

Tony Hillier,  reporting on the Talkswindon Forum after the formal Cabinet Meeting,  said of Garry Perkins: "I heard the chair say that a re-payment of the SBC loan was imminent ! and Des Morgans testimony (Des is another Talkswindon member and well known writer of many quality letters to the Advertiser), agrees with Tonys':

Quote
"Tonight's Open Cabinet Meeting heard Coun Perkins state with absolute clarity that Digital City has new private investors and that the £400k of SBC loan will be repaid within weeks.

Sadly he also persisted in repeating the old chestnut that the reason the  project stalled was because of the intense scrutiny it was put under.  I  tried once again to explain the timeline, but to no avail.  It seems  that Coun perkins is simply unwilling to accpet that perhaps the failure  of Digital City to have had a viable sales and marketing plan for  Highworth might just have contributed to its failure to achieve sales  performance targets"



Remember that Hunt, as recently as only two days before, was using phrases like 'being sought',  It would be a great opportunity' and  'if' - but the Deputy Leader of the Council - Cllr Garry  Perkins was now saying, (but only from within the privileged safety of the Civic Chambers), that new investors had been found and that these new investors would be repaying the  £400,00 loan back to Swindon Borough Council imminently.

By Friday the 21st of January the WiFi'asco,  (if Cllr Perkins is to be believed), is poised to leap from the funeral hearse - from it's current situation where it is without any significant numbers of customers,  money or market confidence, where it has been stalled and waiting to die for the last 10 months - to one where it will imminently be acquiring new investors and enough inward capital to both pay off a £400,000 debt to Swindon Borough Council and put enough money in to pump-prime the project with a fiscal stimulus.  (A 'WiStimulus' if you like.)

It's almost too good to be true and, in if our previous experience of the WiFiasco is any indicator, it probably is too good to be true.

I'm sure that a genuine investor would want to understand the comapny they were considering buying into and especially so a company which is in the position Digital City (UK) Ltd is in.  DC effectively has so few customers that the income they generate each month is utterly insignificant when compared to the mountain of debt it owes to creditors.

The debt to SBC  is believed to be in the region of  £400,000 but I have no idea what may be owed, if anything, to other creditors of Digital City (UK) Ltd has.  The SBC loan is due to be repaid in full by December this year.   Currently, (according to Cllr Keith Williams speaking on BBC Wiltshire earlier this week), interest-only payments are, or have been regularly made each month.  I understand that these interest only payments have been made at the 'commercial rate', (according to SBC), of 3%  per month.  Let's round that figure up or down slightly and call it £1,000 per month.

Now, and this is where I'd like to point out that the next part of this blog post is mostly speculative , I'm having trouble reconciling the current actions and behaviour of Councillor Perkins against his past ones and I'm also finding what he's saying difficult to believe without any evidence being offered.   I've noticed that Councillor Perkins often makes statements from within the Council Chambers, (and therefore from behind the protection of 'Privilege'), which have quickly been proved false, although it does seem that Perkins isn't afraid of openly making wildly exaggerated claims in the local media as well, in fact he's usually something of a media whore.... but not this time -   This time Perkins is staying schtum whenever he is outside the relative  safety of the chambers, which makes me even more suspicious that there's something 'iffy' in the offing...

....and then, as if by magic,  Cllr Williams pops up on BBC Radio Wiltshire, and after energetically slandering Chris Watts, goes on to repeatedly emphasise the following point about the £400,000 loan made by Swindon Borough Council to Digital City (UK) Ltd:

"The loan hasn't been defaulted on yet, and interest is being regularly paid"

I thought this was a most curious thing for Cllr Williams to mention even once, let alone several times.  Especially since I don't think anyone had actually asked a question which would naturally lead to that answer.  It was almost as if he was a little too keen to labour the point.

So, assuming that Digital City (UK) Ltd has been servicing the interest payments on the loan from the loan money itself, and assuming that large monthly payments for consulting services and/or salary have been flowing out of Digital City's accounts and into those of Avidity Consulting Ltd, (another Company started by Mr Hunt), then I'm thinking that the original loan money must be almost exhausted.  Perhaps it has already run out....

... and if so, this naturally leads me to wonder whether Mr Hunt would, (or could),  reach into his own pocket to pay the £1,000 'ish per month in interest payments on theSBC loan.  Is it more likely that he would simply apply the acid-test of solvency to Digital City (UK) Ltd and, upon realising that it cannot liquidise, (in fact does not have),  enough assets to meet its liabilities,  start thinking seriously about winding the company up?

Is Digital City (UK) Ltd destined to join the list of 7 or 8 other companies wound up by Mr Hunt in the last few years or will Cllr Perkins promise that a 'cheque of at least £400,000 is in the post' be proved to be truthful?....

....and if it is, will 'the deal' be another back-street abortion or a genuinely good one?,  I tend towards expecting another abortion....but I'd be  delighted to be proved wrong.  I'm sure it will be interesting either way.

Monday the 24th of January 2011: It has now been exactly a week since I said:

Quote from: Me
"Local media sources, (several of them), have told the Lamplighters   network that they are running out of patience with Director of Digital   City (UK) Ltd and Deputy Leader of Swindon Borough Council, Councillor   Garry Perkins."


7 Days later, and the questions remain very simple:


1. Has all the loan money gone?

2. Is Digital City (UK) Ltd about to default on the loan?

3. Assuming the incoming 'Private Investor' is genuine - what have they been promised Garry?


 :popcorn:



robert feal-martinez

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Perhaps the loan money is being used to service the debt interest, thus giving the illusion that things are under control.

Offline Geoff Reid

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Perhaps the loan money is being used to service the debt interest, thus giving the illusion that things are under control.

I think that's a pertinent and valid question Bob, which is why I asked:


So, assuming that Digital City (UK) Ltd has been servicing the interest payments on the loan from the loan money itself, and assuming that large monthly payments for consulting services and/or salary have been flowing out of Digital City's accounts and into those of Avidity Consulting Ltd, (another Company started by Mr Hunt), then I'm thinking that the original loan money must be almost exhausted.  Perhaps it has already run out....

... and if so, this naturally leads me to wonder whether Mr Hunt would, (or could),  reach into his own pocket to pay the £1,000 'ish per month in interest payments on theSBC loan.  Is it more likely that he would simply apply the acid-test of solvency to Digital City (UK) Ltd and, upon realising that it cannot liquidise, (in fact does not have),  enough assets to meet its liabilities,  start thinking seriously about winding the company up?


robert feal-martinez

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Sorry clearly misread what you said. It does amaze me as to how long this has been dragging on with little or no pressure from other Councillors.

Offline Geoff Reid

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Sorry clearly misread what you said. It does amaze me as to how long this has been dragging on with little or no pressure from other Councillors.


No probs Bob - It was a big post, far bigger than I usually like precisiely because singular details and points are easily missed. 




I can already see that today is going to be another busy day with information, gossip and tittle-tattle steadily rolling in via leaks@talkswindon.org

A little snifter: Hat-Tip to  Shhite Plate

Quote from: Shhite Plate
"A colleague of mine was invited to a local school by someone at SBC who then showed him the wi-fi system which is being fitted to the bigger schools.  He was told that the wifi system was for use of staff, teachers and pupils. He was then informed that SBC planned to open these wi-fi networks up to the areas local to the schools. A bit like a large wifi hot-spot.  There was no suggestion that Digital City had anything to do with this."


If correct, which company is doing this installation work, and could it be Cllr/Director Perkins 'Private Investor' ?



robert feal-martinez

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Geoff a similar system is being rolled out in Bournemouth and featured on the Politics Show some time before Christmas. Their infrastructure is almost in place, and if I recall for it to continue they need ongoing funding from users. Seems a similar problem.

Offline Geoff Reid

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I knew that Poole was, in spring 2009, already supplying genuinely free wifi in at least one of it's Parks - thus beating Swindon by several months but that's about the extent of my knowledge.

Off for a look  :)

robert feal-martinez

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I knew that Poole was, in spring 2009, already supplying genuinely free wifi in at least one of it's Parks - thus beating Swindon by several months but that's about the extent of my knowledge.

Off for a look  :)


It was definitely on the Politics Show South version before Christmas, Poole's close by isn't it???

Offline Geoff Reid

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It was definitely on the Politics Show South version before Christmas, Poole's close by isn't it???

I think the Bournemouth conurbation is governed by multiple Local Authorities - Bournemouth, Poole, Christchurch & Ferndown. Bournemouth & Poole are Unitary Authorities, Christchurch is a Borough Council and Ferndown a District Council.  I also think Christchurch and Ferndown come under Dorset County Council.

Some of the Bournemouth WiFi stuff I'm glancing through spans more than one administrative area so you can probably regard them as one.

 

ph1lc

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What I fail to understand is why anyone would put money into the project at this stage. Clearly if DC has only 25 subscribers at £9.99 then it's maximum income is around 25% of the debt repayments to SBC.

What usually happens in these circumstances is that the company employs an outside agency (typically a major firm of accountants) to try to find investment or to sell the company as a going concern. DC is clearly not a going concern. If they are unable the next move is to try to sell the company as a pre-pack out od administration (this would leave SBC only entitled to the proceeds of the prepack, less administrators costs - and that's assuming they are a secured creditor, last time I looked they weren't. That would not raise any significant sum.

The only other option is for SBC to be the investor.


Offline I Could Do That

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Now David Glaholm's not happy.

http://www.swindonadvertiser.co.uk/yoursay/swindonletters/8805095.Letter_from_David_Glaholm/
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Offline Geoff Reid

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DC is clearly not a going concern. If they are unable the next move is to try to sell the company as a pre-pack out of administration

I'm no expert, but....

Re Pre Pack: What would the insolvency Practitioner make of the way Digital City (UK) Ltd has been created, structured, financed and run? (into the ground at speed).  I'm not convinced an I.P, (insolvency practitioner), who had full access to the books/records would be able to restructure DC to produce a 'viable' company to sell.

ph1lc

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The IP obviously has full access to the books, but what tends to happen is that they take the best offer for the assets of the company, tough for the creditors. The buyer statrs a new co (legal entity ) and continues to install the wi-fi.

It's for that reason that I find it unlikely that any one would invest to keep the co solvent at this stage, when they can get the whole project for a song. It is not unusual to get several experssions of interest on a going concern basis (which may go someway to explaining the Perkinator's statement last week.), but it is my experience that with a co as sick as DC the investors find it a whole lot cheaper to wait and lose the liabilities.

Offline Geoff Reid

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It is not unusual to get several experssions of interest on a going concern basis (which may go someway to explaining the Perkinator's statement last week.), but it is my experience that with a co as sick as DC the investors find it a whole lot cheaper to wait and lose the liabilities.

That is what I was discussing with a journo this a.m.  I don't think I managed to put it as succinctly as that though, what I was said was pretty much along the lines of:

Quote from: Me
Perkins might as well have fired a couple of shots from a starting pistol to get peoples attention before shouting wildly: "There's gonna be a fire-sale here next week!" and then, as the crowd watches the loud-mouthed nutter with the gun, he deliberately sets fire to the warehouse....."


Offline Muggins

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I could do that: 

And no doubt you can work out why David Glaholm would make a statement like tha,  at this time?
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Offline Ringer

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I could do that: 

And no doubt you can work out why David Glaholm would make a statement like tha,  at this time?
I copied it out of the Swindon Advertiser to try and work out why?

Quote
I WISH Coun Montaut would stop whingeing about the wi fi. Seems some people won’t be happy till the project is destroyed.

Remember the Mondex trial that happened in Swindon. Little card with a chip in. Pity the council did not take a stake in it as the technology is now worldwide.

While writing I am pleased David Cameron has implied VAT will stay at 20 per cent as I asked a couple of weeks ago.

Perhaps the Labour Party could now tell us if they will reduce it when they take power again.

DAVID GLAHOLM

 



Nope after reading it I am no nearer to working it out  :-\
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Offline 20Eyes

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Nope after reading it I am no nearer to working it out  :-\

It can surely only be one of two things:

1. He genuinely likes the Wi-Fi concept and hopes it'll come to fruition

2. He's helping (and wants) to line up Enrique & The Labour Group as the fall guys for the 'failure' of Digital City/SBC to find the necessary private investors
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Offline I Could Do That

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I could do that: 

And no doubt you can work out why David Glaholm would make a statement like that,  at this time?

Is it for an early instalment, of the "new leader" bun fight?
 :popcorn:
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Offline Mart

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I think that the project is doomed. I think it was fundamentally flawed in as much as it's selling point was that it plugged a gap, the error in judgement being that no such gap existed, and if it did, it has certainly gone now.

The concept that any business could start up and become a major player in this market without 8 digit funding was, and is, deliriously optimistic. You would do just as well to open a cigarette factory.

I think that there is an acceptance that this is the case, I also think that there is a movement to attribute the projects failure not to the salient facts, but to those who stated those facts from the start, it's a thought and it seems in keeping with the general ethics of the whole affair.
Sometimes I think you have to march right in and demand your rights, even if you don’t know what your rights are, or who the person is you’re talking to. Then, on the way out, slam the door.

Offline 20Eyes

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I think that the project is doomed. I think it was fundamentally flawed in as much as it's selling point was that it plugged a gap, the error in judgement being that no such gap existed, and if it did, it has certainly gone now.

The concept that any business could start up and become a major player in this market without 8 digit funding was, and is, deliriously optimistic. You would do just as well to open a cigarette factory.

Absolutely (on both points).

'Free Wi-Fi access' across the town is a nice idea in the same way that 'ATMs that give you free money when you want it' is a nice idea. It was never going to work as anything other than a horse to hang other things on, even if it did work in terms of the product/service itself.

That being the case, it makes the failure even more ignominous - which is presumably the main reason why the failure cannot/will not be publically accepted.. and so a scapegoat must be found.

Couldn't happen to a 'nicer' fellow than Enrique Montague.
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