Paul Hodges Sentenced over False Statements

Paul Hodges, proprietor of startup internet radio venture, Talk Australia, has been sentenced in Sydney to 500 hours’ community service.

Hodges made false statements to persuade 10 people to invest a total of $240 000 in the venture, which was only on air for a month in late 2000.

In a statement, ASIC (Australian Securities and Investments Commission) said that among the false statements was a claim that Nine Network’s Ray Martin would be an announcer, Ozemail had a contract with Talk Australia and would be contributing up to $600 000, and that six advertisers had invested $100 000 each.

Hodges had pleaded guilty to 10 counts of making a false statement and one of being a disqualified person, acting in the management of a corporation.

The NSW District Court has sentenced him to 500 hours’ community service for each of the first 10 counts and 100 hours for the second count, with all to be served concurrently.

In 1999-2000, Talk Australia rode the wave of internet hype when radio streaming was imagined to be a viable stand alone business model. Other on line radio ventures then included Bigfatradio and Spike Radio.

Time has shown that, while some internet streams are beginning to generate revenue, they can be viable as a complementary radio business, but not usually on their own.

Hodges’ over-ambitious business model for Talk Australia involved building and operating an internet radio station, which offered talkback and news, presented by high profile announcers. His false statements overstated the likelihood of success of the venture.

A studio was built in Glebe and went to air in October 2000, operating for one month before closing down on 17 November 2000. A number of companies, which supplied broadcast equipment and software to Talk Australia, were left out of pocket and the investors did not get a return on their money.