Taxpayer owns stake in firm fined €305,000
Published 23/08/2010 | 05:00
MORE than €700,000 in taxpayers' money has been invested in the past year in a mobile phone content company which was repeatedly fined over complaints about so-called premium text services.
State economic development agency Enterprise Ireland confirmed it had invested the sum in Zamano through a privately run venture capital fund.
The company, which is based in Dublin's Digital Hub and whose directors include former rugby international Brendan Mullin, has run into controversy in the past over premium text services, including ringtones, quizzes, competitions and soft-porn downloads.
It has been fined more than £250,000 (€305,000) in the UK following complaints from phone users, some of whom claimed they were billed for services they did not know they had subscribed to.
Last December it was announced the company was to receive a €2.5m cash injection through the Ulster Bank Diageo Venture Fund, managed by NCB.
Enterprise Ireland last night confirmed it had a 29pc stake in the fund, meaning €725,000 of the investment came from taxpayers.
The agency also has a separate 4.39pc shareholding in the firm, which it purchased eight years ago.
The shareholding is now valued at around €220,000.
Zamano was fined £15,000 (€18,300) by UK regulator PhonepayPlus last January in connection with complaints about unsolicited text messages which led to phone users being charged a weekly fee.
The previous year Red Circle, a company owned by Zamano, was formally reprimanded and fined £35,000 (€42,800) following complaints about an adult content subscription service.
The same regulator also imposed a £110,000 (€134,000) fine on the company in 2008 for repeated breaches of its operating code of practice in relation to a mobile phone subscription service.
It was also hit with other fines in the UK dating back to 2006.
However, the company's chief executive, John O'Shea, told the Irish Independent that the recent fines were "legacy issues" and that it had not been the subject of any new investigations in the past 26 months.
He also said that all the adjudications involved third-party providers who used the company's messaging platform, and that while his company had paid the fines, all of the money had been recouped from those providers.
He said: "We put in place a new code of practice in June 2008, which was very rigid and stopped the possibility of things like this happening again."
The company employs 50 people and has operations in Ireland, the UK, Australia, Spain and the US.
In a statement, Enterprise Ireland defended its investment in Zamano, but said it had no role in the management or operation of the company.
The agency added: "Zamano is now a significant employer in Ireland and exporter from Ireland."