NBN Co's blinkered satellite deal

This week NBN Co released its rollout plan for the next 12 months.

One of the big winners from the rollout is activ8me who will sell subsidised NBN satellite services as well as fibre broadband plans despite legal issues swirling around its owner and at least two recent senior executives.

Activ8me says NBN Co did not ask any questions about activ8me's continued employment of disqualified company director Sandro Di Donato.

Sandro Di Donato, the owner and founder of the company that owns activ8me, is still involved at a very senior management level in active8me despite being disqualified as a company director by ASIC in January this year.

Di Donato resigned as director of his own company Australian Private Networks Pty Ltd (APN), which owns activ8me, on January 25, but continued to work as activ8me's business development manager.

The ASIC ban was reduced on appeal to two and half years meaning Di Donato can't be a company director before July 24, 2013.

“Sandro's disqualification as a director does not affect his work. It relates to other companies associated with Bill Express not activ8me,” said Tony Bundrock, the chief executive of activ8me.

Bundrock is also one of two current directors of APN along with Rob D'Alessio.

Asked if the NBN inquired about Sandro or his cousin Enzo Di Donato's continued involvement with the company, Bundock replied:

“No, NBN didn't ask any questions about that. We have just been registered by NBN and have signed an agreement to sell fibre plans which we will start in 2012, all those issues relate to Bill Express and not activ8me.” 

Former national sales manager of activ8me, Enzo Di Donato is alleged to be involved in rigging the share price of Bill Express shares. The broker who made the trades, Newton Chan, pleaded guilty last year and was jailed for 20 months.

Enzo Di Donato no longer works at activ8me, Bundrock says.

APN shared staff and premises with Bill Express when it purchased small Adelaide ISP activ8me in 2005/06.

Di Donato's APN then successfully applied to provide government subsidised satellite broadband after Bill Express gave written assurances about APN's capabilities to the Department of Broadband, Communications and the Digital Economy (DBCDE), the Supreme Court of Victoria heard last year.

Since then activ8me has grown to become “probably the number one” provider of subsidised satellite internet access in Australia, Bundrock says.  The company also benefited from DBCDE funding in 2010 to install community satellite telephones in indigenous communities.

In the early days of the government's broadband guarantee, monthly payments from activ8me subscribers were allegedly passed through Bill Express companies.

The liquidator of Bill Express is reportedly looking for funding to pursue Sandro Di Donato for debts associated with the collapse of Bill Express and its web of private companies.

Activ8me customers have asked whether their satellite dishes and equipment could be seized to pay Bill Express creditors in a long running thread called “Will court case affect A8 customers?” on broadband discussion board Whirlpool.com.au.

“That will not happen,” Tony Bundrock says, “activ8me customers own their own equipment.

“The Bill Express collapse happened in 2008. Here we are in 2011 and activ8me is enjoying our business and building it.

“I have seen what the liquidator is reported to have said and he has spent quite a few million dollars, but activ8me has been in business for a lot of years now and we just get on with the job."

Bill Express collapsed in 2008 owing Optus, Vodafone, ANZ and other suppliers, banks and investors more than $250 million.

The liquidator is believed to allege that APN owes Bill Express more than $10 million and Technology Business Systems, another private company owned by Sandro Di Donato, owes Bill Express about $50 million.

Another senior management figure at APN and activ8me until recently has been financial consultant Peter Couper.

Last month Couper pleaded guilty to charges relating to the false purchase and sale of fictitious software for SIM cards called SIMEX.

While working for companies associated with Bill Express, Couper caused false accounts to be created to support the purchase and sale of $5.4 million worth of 'SIMEX'.

SIMEX was apparently being installed on blank SIM cards by Bill Express but SIMEX never existed, the court was told, and Couper signed off on the accounting entries to bolster the books of the ailing payments technology company.

Couper is now awaiting sentencing in November.

Bundrock says none of these legal issues are impacting on activ8me and the company has a bright future.

“In July next year we hope to be involved with the NBN wireless service as well as the fibre.

“Right now we are telling our existing customers that the new NBN satellite is available from November but that depends on the government clarifying its three year rule on Australian Broadband Guarantee satellite customers.

“People who signed up to the guarantee had to agree to take the service for three years. What is not clear is whether that is set in stone or whether those people will be able to switch to NBN.”

Asked whether NBN Co considered Sandro Di Donato's ASIC ban when approving activ8me to participate in the rollout, an NBN Co spokeswoman said: “NBN Co considered what is relevant in relation to the supply of services".