Council asks state to reject Networx sale - WMC Action News 5 - Memphis, Tennessee

Reported by Syan Rhodes

Council asks state to reject Networx sale

The controversial sale of MLGW's failed fiber-optics company could be put on the back burner.

MLGW sold the failed fiber optics company in July, but the deal still needs state approval.

On Tuesday, city council members vowed to do whatever they could to make sure that doesn't happen until they get answers about what happened to the ratepayers $29 million investment.

Networx may be gone, but bad feelings about the failed venture linger. Memphis City Council members, seeking answers about what went wrong, hired an auditor and came up with a list of 21 questions for MLGW and Networx about the company's customers, creditors, and employees.

In a report released Tuesday, Networx refused to answer several of those questions, citing financial confidentiality.

"This is a slap in the face, none of your business situation, and it is our business," said Councilwoman Barbara Swearengen Ware.

Not getting the answers they wanted from Networx, council members turned their questions to MLGW Chief Financial Officer John McCullough, who also sits on the Networx board.

"With you being CFO, it seems that all the baggage is on you at this particular time," said Councilman Joe Brown.

"Well, I'm not trying to get a load off me, I take ownership," McCullough said.

Brown added, "For the record, are you saying you take responsibility for the loss of $29 million and that your superiors who were above you should not take responsibility. Are you saying this Mr. McCullough?"

McCullough responded, "No sir."

McCullough's answers didn't satisfy councilmembers, who approved a resolution asking the state to reject MLGW's sale of Networx.

Click here to email Syan Rhodes.

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