Direct Data in receivership

Queensland-based wholesale ISP Direct Data Pty Ltd has been placed in receivership by its largest secured creditor AAPT, CRN has learned.

Accounting firm PricewaterhouseCoopers (PwC) is handling the receivership and is now attempting to offload the business.

Former Direct Data owner and shareholder James Austin -- who is also MD at Direct Data's biggest customer, retail ISP Dart Internet -- is assisting PwC with its enquiries into the Direct Data business.

Austin owned Dart Internet from 1996 and originally sold the dial-up business to another ISP in 1999.

Last year he kicked off Dart again, chasing opportunities in the broadband market. In October Austin bought into a wholesale ISP called G4.

G4 was amalgamated with Direct Data and a new wholesale business was born.

In February, Austin sold 75 percent of Direct Data to current directors Ran McDonald, Michael Looke and Steve Thompson but from then until now “the business spiralled out of control,” he alleged.

“I talk to the receiver/manager daily. We're negotiating ways to move forward to keep Dart Internet from being turned off because of Direct Data not being able to pay its bills to AAPT.

“It may in fact end up that Dart Internet move to an alternate supplier unless of course we end up buying directly from AAPT,” he said.

It is not clear how much money Direct Data owes to AAPT. It is believed that the figure is “six numbers or more”.

“Certainly the cashflow that Dart Internet is paying Direct Data is enough to cover the bill,” said Austin.

Austin previously owned 100 percent of Direct Data and now owns 37.5 percent of a company called Direct Corporation, which owns 100 percent of Direct Data. At its peak Direct Data had over 25 staff.

“There was a shareholder's agreement which saw me sell out of Dart Internet and Direct Data and businesses associated with myself. I have another business Argus Corporation, which is an IT services company.

“Michael Looke brought in another services company. We merged those two businesses together and formed Direct Corporation with Direct Integration being an IT services company, Direct Data being the wholesale ISP, Dart Internet being a retail ISP and Direct Corporation being the ultimate holding company of the group,” Austin said.

But due to the fact that Austin rescinded the contract that created the group of companies in March, he may not “legally own 37 percent of Direct Corporation at all,” he said.

“This will end in tears for some people and I know that those people will not be me or AAPT,” he claimed.

Direct Data directors were not available for comment at time of going to press.