Real Assets Investor; Broadband Pioneer; Contrarian Thinker; Spiritosopher

On November 23, 2011, I published a document, FTTH Research & Analysis Report: Disastrous Flaws in FTTH Busines Planning, which has caused some commotion in the industry. I made painstaking effort to do a feasibility study on an announced project by a company called CityFibre Holdings. I wrote:

… I hope, however, that this analysis and feasibility study of CFH’s announced project will be proven wrong. The reason for this is that iUHBA Networks, Inc. is calculating much higher capital expenditure than CFH, especially the so-called “Cost Per Connection” (CPC), which stands at the core of a FTTH projects’ feasibility. If CFH can prove that it is successful in achieving building connections at the dramatically low amounts they are promoting, there is no stopping others (incl. iUHBA) to build FTTH connections at similar low costs elsewhere. It would be great to build systems at such low costs, especially for iUHBA that plans to build 3,000,000 connections in the UK. Nevertheless, as will be explained in detail in the scenario-overview, it seems quite an impossible feat to.

But the topic of this post revolves around the following paragraph:

A FTTH business entity, known as i3 Group (not to be confused with the large Private Equity firm 3i Group) has recently gone into administration (June 2011), leaving a trail of unpaid debt and project mismanagement. According to news sources, the Serious Fraud Office is still looking into the matters involving the entities around i3 Group. Before the administrators stepped in, the assets of i3 Group were sold for the symbolic amount of £1 pound to the group’s former President & COO, Greg Mesch, who has formed a new entity named CityFibre Holdings. CFH is populated with people who come from Versatel, a high-flying fiber optic networking company (which was founded by Greg Mesh and his brother) that came crashing down when it ran into financial troubles.

Sorry for the chaps at i3 Group and CFH, but it’s true (according to news sources) except the date: May 24 2011 instead of June 2011. A genuine mistake even though I remember taking it from a news source (… why would I make that date up, especially when it concerns a difference of some days?).

This afternoon, I received the following letter from the lawyers of i3 Group.

Page 1:

and page 2:

My immediate response was plain and simple:

Thank you. I may write a blog as an answer to this bunch of crap. You can sue me over that too if you like.

Regards,

Neal

Now, below is my response in the form of a blog post.

Dear Helen,

First of all, I have written the FTTH Analysis Report on personal title and not through N.S. Lachman & Co., or any other entity. I hope you and your client have heard of this weird concept called “Freedom of Speech”.

Second. I have and had nothing to hide. Numerous CityFibre Holdings (CFH) and i3 Group executives have requested a copy of this report on the first day (even within the first few hours that it became available). If I had real malicious intent and had knowingly and willingly put false claims in this report, I would be careful to avoid sending it to these people. Or do you really think I am too stupid to realize that?

Third. Your and your client’s claims are so laughable that I did not even consider showing it to my lawyer. It would be waste of money and energy. What you find misleading and false has been repeatedly reported and written in the media. I will show you the sources below.

Fourth. I am an industry veteran and I have written such reports since 2003. Have you ever heard about freedom of speech and freedom of expression? Yes, well, this is a great example of that. I have not received and have thus not been able to share any CONFIDENTIAL data from i3 Group and/or CFH. Also, I have NOT received any data other than what is publicly available through the media and/or on the respective companies’ websites. If those “facts” are erroneous, you should take up matters with them, not me. I briefly mentioned i3 Group, yes. So, let’s analyze what you and your client state, and what the truth is.

1. I stated that i3 Group went into administration recently. Then I added the month and year in parenthesis ( June 2011). You are screaming fire, hell and high water by stating “This is in fact false; our client was not in administration at the time alleged an has never been in administration.”. Well, let’s see. Gosh! According to news sources some i3 Group went into administration on… May 24, 2011. Forgive me. I apologize for the slip of 7 days. Do you really think I meant harm by this date? I am also convinced that I found the mentioning of June 2011 somewhere online. But even if not, I hope the judge will forgive me for this difference of 7 days. Anyway, the source that “i3 Group enters administration” was a media article. I have the screenshots.
2. Has your client done stuff in those 7 days? Have they been structuring deals and whatnot? I don’t know. It’s not my duty to research. What I did was merely mention the link between i3 Group and City Fiber Holdings/ CFH. Do you deny that there is a link between CFH, i3 Group and Greg Mesch? So yes, please tell me where I am wrong, and if you’re right I’ll post a sincere apology.
3. But can you blame me for relaying what the media has written? Should I do a company check and whatnot? No, I just wrote what the media reported repeatedly. I did not invent any stories.
4. I stated that the Serious Fraud Office SFO is “looking into matters involving the entities around i3 Group. You state that “this is also false; neither our client, i3-Group Limited, not its subsidiary, i3 International Limited, are currently under or have ever been investigated by the SFO; and before entering administration i3 Group’s assets were “sold for the symbolic amount of £1 to the group’s former President & COO, Greg Mesch…”
5. So, those are false reports? My apologies, I just used and at times even quoted some of these sources: http://www.bournemouthecho.co.uk/news/8804956.UPDATED__Fibrecity_can_t_say_when_work_will_restart__says_council/ and http://www.broadbandwatcher.co.uk/deeper-hole-for-the-i3-group-746/ and http://www.broadbandwatcher.co.uk/fibrecity-funding-firm-investigated-for-misconduct-629/ and http://www.broadbandwatcher.co.uk/i3-group-sells-its-fibrecity-project-309/and http://content.yudu.com/A1raw7/LWMar11/resources/13.htm and http://www.insidermedia.com/insider/north-west/53872-h2o-networks-owed-collapsed-funder-63m
6. I also made screenshots of most of those articles for your convenience if you ever need them. If Greg Mesh a) was not the group’s former Pres & COO, and b) if he and/or his entities didn’t pay £1 for those assets, I will publish an apology on this blog. In fact, your statement that I wrote this “false” information is in itself a misleading and false statement because you use a logical fallacy (in the later agumentation) by trying to put these facts in perspective. You state that CFH also assumed millions of debt. So? What has that to do with the fact that he paid £1 for those assets? You want me to hand an award to him for doing that? As a matter of fact, the burden of debt payments and interest costs will even further jeopardize the feasibility of CFH’s project of building 1 million FTTH connections in tier-2 cities in the UK.
7. My report is not libellous and it does not amount to malicious falsehood.  I have made an in-depth feasibility analysis and invited EVERYONE who received it (which includes several CFH and i3 Group executives)  to challenge my findings. I did not mean “to cause the loss of investment”. You are over-exaggerating my ability to negatively influence those smart potential investors and their ubersmart advisors. Don’t you think all investors should do their homework? Why cry foul? As a matter of fact, speaking of which: NONE of your and your client’s comments/objections are in reference to the contents/conclusions of my feasibility study. Would it be a trick-question if I’d ask you why that is?
8. I am not an investigative reporter. I use my freedom of speech to question and analyze matters that I find of interest. You can try suing me for that. Many have questioned my own announced projects, and I happen to engage in communications with them. There are so many stories circling about me on the net, and I usually have an answer to each of them. Nobody can claim that I am telling lies, if so, they should prove it. Now, you can claim that I have malicious intent, and while I could claim ignorance, I am just relaying reports by SEVERAL media.
9. I don’t blame the media for being confused though. There seems to have been so many confusing structures that even Sherlock Holmes would find his head spinning.
10. Also, for a moment I thought that private equity behemoth 3i Group was putting its weight behind the FTTH industry; it turned out to be some unknown entity called i3 Group. Very confusing, is it not? To me it was.
11. I have not called your clients a bunch of frauds or stated that they were involved in “sham transactions”, but it seems that you are suggesting as such. Those are your words, not mine. You can call me wilfully malevolent and misleading, but if you think I will be scared by the threats of your lawsuits and huddle up in a cave, you and your client are mistaken. A wise man in a movie, (Gordon Gekko in Wall Street 2), said, “Stop telling lies about me, and I’ll stop telling the truth about you.” Interesting philosophy, not?
12. The rest of your story about Total Asset Finance TAF, Eerlestown Technology Limited ETL and City Fibre Holdings doesn’t matter here, because I wasn’t interested in that all. I just relayed some widely known facts (or shall i say, assumed “facts” by the media) and background info on i3 Group and CFH, that’s all. If you’re so trigger-happy, consider suing them.
13. Or does your client focus on me because I happen to be involved with others, competing industry players? Is this your client’s set-up/way of shutting me up and make me disappear from the market? Now, if that would be the case it would be surely and certainly malicious intent!
14. I highly suggest you and your client read this report that is talking about people’s blood boiling and other angry  stuff: http://content.yudu.com/A1raw7/LWMar11/resources/13.htm

Are you planning to sue all these people too? Good luck. If you still think that it will be wise to sue me, please expect a counter suit and a major financial claim for damages. Your clients may have long breath, but I promise you that I will do anything to pay back in kind. My good name in the industry as an open and transparent analyst is at stake here. If your clients think they are tough, I am willing to play.

Update 1: Before the ladies (Helen and Helyn)  at the lawfirm read above blog they had already been working on the following threat, which I received a while ago.

Threat 1:

And the saga continues. I’ll keep this updated (for my own records too).