Australia Card promoter enters voluntary administration

Sydney smartcard provider Intercard Wireless -- a company that once sparked interest for its patented technology, government connections and executive support of the controversial Australia Card scheme -- has entered voluntary administration after several troubled years.

Intercard Wireless, a developer of smartcard-type wireless technology for passports and national identification cards, was suspended from trading on the ASX in 1999.

The company's tale of woe continued, culminating in an investigation by the Australian Securities and Investments Commission (ASIC) leading to the appointment of GHK Green Grejci Chartered Accountants as administrators on the 12 August.

ASIC had found that Intercard Wireless continued to incur debts when there were reasonable grounds to suspect it was insolvent. ASIC had approached Peter Solomon, MD at Intercard Wireless, with its concerns but to no avail.

Intercard Wireless -- formerly Intag International -- had no revenue and was reliant on shareholders and investors for funding until its technology was commercialised, ASIC said.

ASIC was alerted to the company's behaviour after Intercard Wireless had failed to lodge its 2002 financial report in contravention of the Corporations Act, ASIC said.

ASIC then sent the company a reminder notice to no avail, and had to apply to the Supreme Court of NSW in April 2003 to force the smartcard provider to comply, ASIC said.

Intercard Wireless's head office had not answered CRN's phone calls at press time.

However, Intercard Wireless may have been gambling on the success of a proposed re-introduction of a national identification card scheme.

Intercard Wireless's chairman is a previous National Party leader, Ian Sinclair. MD Peter Solomon himself is reportedly a former senior member of the Liberal Party who helped get John Howard elected some 30 years ago.

Unsurprisingly, Solomon was reportedly a big supporter of the controversial, smartcard-based Australia Card scheme in the 1980s.

Also, Intercard Wireless had been working with the Federal Government on providing biometric chips for Australia's new passport, needed to comply with pending US entry requirements, according to media reports.

Solomon was quoted as saying that the Federal Government was considering re-introducing an Australia Card-type proposal for a compulsory national identification card following this year's election.

The new passport scheme plus a health smartcard -- slated for introduction over the next few years -- would introduce national smartcard identification in stages, providing a platform to which more personal details could be added over time, Solomon was reported as saying.

Perusal of IP Australia's Supplement to the Australian Official Journal of Patents in September last year shows that Intercard Wireless filed provisional applications for three patents at that time.

They were for a control system, passenger interface and related technologies, including electronic processing of passports, the journal said.

Intercard Wireless was also a business partner of New Zealand internet technology provider B&I Electronics.

Intercard Wireless entered into a consortium with B&I Electronics in 2003 to jointly roll out a secure-access MULTOS-based travel smartcard system linked to that country's Wanganui Police Bureau computer, which stores data on all New Zealanders.

The Wanganui computer has proved somewhat unpopular with many New Zealanders, who believe such intelligence-gathering may violate their privacy. A civil liberties activist, Neil Roberts, famously tried and failed to blow the computer up in 1983 -- killing himself in the process.

B&I Electronics' Ted Woodley was contacted by CRN last week for further details on the project but had not replied by press-time.

Listed company watchdog website DeListed.com.au states that the directors of Intercard Wireless had been failing to keep the market informed of its activities for some years.

The company had still been operating in the smartcard business until at least 2003, despite having been suspended as early as March 1999, DeListed.com.au said.

"Requotation of its shares will only occur if the company is successful with some of the tenders it has submitted," it said.

Private placements to raise money had been made with some shareholders, apparently with shareholder approval, it said.

Intercard Wireless had also failed to pay its annual listing fee in 2003 and risked being removed from the official list, DeListed.com.au said.

Yet information from the Australian Trade Commission shows that Intercard Wireless had notable success in a 2001 trade visit to the Middle East -- managing to negotiate contracts in the United Arab Emirates, Kuwait, Saudi Arabia and Egypt.

Those nations had been keen to deploy sophisticated audit and secure online information systems in government departments such as health.

Robin Simpson, a mobile and wireless analyst at market research group Gartner, said a main reason smartcards had so far not taken off in Australia was that it hadn't been possible to do it on a large enough scale to make it viable.

The enormous -- by Australian standards -- smartcard-based transport system in Hong Kong had proven very successful. Once all the transport authorities had started using the smartcards, increasing numbers of small retailers and other businesses around the city had begun installing terminals, he said.

Functionality had been added as time went on, Simpson said.

"It's taken them eight years, but all the public transport bodies got together and shared the infrastructure costs," he said. "No one wants the smartcard if they can't use it everywhere."

The situation was similar with WLAN, he said. Until WLAN became ubiquitous, it only had limited appeal and applicability.

"There is a tipping point," Simpson said.

Simply Wireless, a WLAN and wireless WAN provider, also entered voluntary administration this month.

Simpson said he believed that wireless technologies in general were just reaching that tipping point. Unfortunately, many good, innovative developers and providers that got into wireless early might now be running out of money before revenue began to ramp up. That could be a great pity for the industry, Simpson said.