For Broadcast, May 3, 2007

Beleaguered start-up Iostar had circulated an investment memorandum featuring a line-up of non-executive directors that read like a Who's Who of UK media and finance.

The company, which lost its chief executive, Dawn Airey, after it failed to raise the £32.5m required for its business plan, claimed to have secured the services of a raft of leading TV and financial players as non-executive directors. The private placement memorandum, seen by Broadcast, lists former Carlton Television chairman Nigel Walmsley, who is also a director of CSFB private equity fund DLJ Media Parters, as a non-exec, plus founder and deputy chairman of Chez Gerard Restaurants Group Laurence Issacson. Also listed as non-executive directors are former Royal Bank of Canada chairman of international investment banking Nicholas Villiers and Chris Wronsky, the founder of Zonevision TV.

Other names

Media banker at NM Rothschild and Sons Dominic Wallis, former Telewest group strategy director Stephen Cook and theatrical impresario Karl Sydow also appear on the document.

But despite being listed in the document, it is not clear how many of the named non-executive directors had formally taken up the positions. It is understood many may have agreed to become involved after the money was raised.

One non-executive board member said he was surprised to find his name in the memorandum. He said: "I was invited only a few weeks ago. I said yes, but I wasn't expecting there to be a widely circulated investment memorandum."

Another non-executive told Broadcast he was unaware his name was being used on a document intended to help raise funds.

Sources claim

A source close to Wallis said he told Iostar he would potentially become a non-exec in a personal capacity only if the company were to go public. The source said: "His name should not have appeared in such a document and neither should Rothschild's."

It has also emerged that Iostar's board suspended the company's chief fundraiser, Tim Carron Brown, on either 12 or 13 April after it became clear that very little of the £32.5m they expected to be raised was actually in hand.

Iostar chairman Dick Emery suspended Carron Brown by letter after an emergency board meeting on 11 April. A source said Carron Brown could not adequately explain the status of the funding at the meeting.

Carron Brown did not return calls. Iostar's plans are unclear but it is still a trading company.