Council launches audit of failed fiber optics company

Memphis City Council members said Tuesday they would launch an audit of the failed Memphis Networx fiber optics company.

The $33,000 audit will find out how and why the company lost $32 million.
MLGW used ratepayer and private funds to buy the fiber optics network.  Memphis Networx says the company fell with the dot-com bust.
The MLGW board recently voted to cut its losses and sell Networx to Communications Infrastructure Investments for $11.5 million.
City officials watching the sale closely because Memphis 911 communications run through the fiber optic network.
Council members said the audit will bring forth unanswered questions, including financial records and the list of investors.

"It's more looking at what happened to the money that was invested," said Memphis City Attorney Allan Wade.
Wade added that "the public needs to know where the money was spent."

City Council members say their audit will work in conjunction with a state investigation.  Last week, seven Memphis legislators asked the Tennessee Regulatory Authority to launch a formal investigation.

Private investors who owned the majority share of Networx will split $2 million from its sale.  MLGW gets back about $950,000.

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