Freedom latest casualty in list of startup failures

By ADAM GIFFORD

The wireless internet company Freedom Vnet has gone into voluntary liquidation, the latest in a string of failed internet startups driven by Wellsford businessman Evan Read.

Former director Reg Kidd said Freedom Vnet stopped trading several weeks ago.

"They tried to get other investors involved, but they could not find a package to get it going," Kidd said.

He said Read was still involved in the company, but the Herald was unable to contact him.

Freedom Vnet touted a complex community access network marketing model in which communities would own and manage wireless internet networks, financed from monthly subscriptions.

It claimed to have access to "proprietary circular polarisation stub-helix antenna technology" originally developed for the United States military, which was an advance on other 802.11b wireless technology.

Five members of its management team walked away in April and started Rural Networks, which is trying to create wireless networks through commercial joint ventures with local authorities.

Rural Networks chairman Roger Herbert said he and his colleagues became concerned when they found shares they paid for had not been allocated, that some of them were listed as directors without their knowledge, and that Read had a "cold store" arrangement with Kidd in which documents were pre-signed.

"The company had a ridiculously complex structure which mainly suited Evan Read," Herbert said.

Money was spent buying and propping up a small internet service provider, Safetynet.

"The bottom line is the five of us lost over $600,000 in cash and unpaid salaries."

Read was also found guilty by the Complaints Review Tribunal of sexual harassment of an employee at one of his previous companies, Wayby Telecommunications, now in liquidation.

"We made Evan an offer to get him out, but he would not go," Herbert said. "I decided then to leave and get on with life."

He said Read was a persuasive salesman. "I think he really believes his own stories, so people believe him."

Rural Networks has a test site near Papakura and is talking to nine local authorities and other possible joint venture partners.

Freedom Vnet had a test site at Te Kaha, where it was trying to sign up Te Runanga o Te Whare Tribal Authority as a foundation customer.

That deal fell through when it failed to win Government funding.

Read has been defended by another Freedom Vnet staffer, Rene Huerta, who said Read withdrew from day-to-day management of the company at the end of last year.

"There was bad planning, bad management, and we were losing [Safetynet] customers producing good revenue because people could not be bothered talking to them."

He said TelstraClear cut Freedom Vnet's internet link in May, and the company had been trying to wind up its activities since then.

Read's first foray into telecommunications was in 1997 with Wayby Telephone Company, which tried to bring cheap telephone and internet services to Warkworth and Wellsford.

Read blamed Telecom when that venture failed to take off, and bounced back with a scheme to sell set-top boxes to bars, so they could offer free internet access to patrons.

He also had a hand in developing Bloodhound, a service offered by Brocker Technology subsidiary Powercall, which allowed subscribers to be reached on any phone from one number.

An earlier entry by Read and other parties into wireless internet, Alternative Futures Ltd, was sold to Barry Colman's Liberty Group in December 1999.