A deal to turn Newcastle and Gateshead into the two of the hottest Wi-Fi spots in the UK could go cold after the parent company of the Spanish firm asked to help do it has reportedly gone bust.
Madrid-based Let¹s Gowex was said to be in crisis today when officials revealed it would have to file for bankruptcy after its founder and chief executive admitted filing inaccurate accounts.
In a statement to the Spanish stock exchange the company said that Jenaro Garcia Martin, chief executive officer and chairman, had resigned after telling board members “that the accounts of the company, for at least the last four years, were unfaithful and that he was responsible for this misrepresentation”.
“The board, confronted by the expectation that the company would not be able to cope with its maturing current debt payments, agreed to file a voluntary request for bankruptcy.”
It was in May this year that Gowex (UK) Ltd announced a 10-year deal under which it would provide free Wi-Fi to Newcastle and Gateshead.
Let¹s Gowex has previously announced contracts in Dublin, Edinburgh, New York, Chicago, Miami, San Francisco and Madrid.
In a joint statement, Newcastle and Gateshead Councils said: “We are naturally concerned and very disappointed at the news that Let¹s Gowex SA, the associated company of Gowex (UK) Ltd who were procured – in common with many other major cities around the world - to provide public Wi-Fi, is in financial difficulties.
“The contract Newcastle and Gateshead have with Gowex (UK) Ltd did not rely on any financial investment from either council so there will be no financial loss to the council tax payer. Delivery under the contract with Gowex (UK) Ltd has not started.
“We are waiting for confirmation from Gowex (UK) Ltd before any further decisions are taken to progress this work.
“The contract with Gowex (UK) Ltd is just one part of our ambitious programme of delivering superfast broadband and Wi-Fi in the city.
“We remain committed to this important programme.”