Nominet blew six figures vanity-publishing ex-CEO’s book

Nominet spent £135,000 to publish an upcoming book by a CEO who has since been kicked out, to promote a business it has since divested, it has emerged.

Thoughts from the Big Chair: A Leader’s Guide to Digital Transformation, by Russell Haworth, is due to be published in April, after Nominet paid the hefty sum to publisher Forbes.

Haworth quit the company almost two years ago, just hours before he could be forced out in a member mutiny, but the publishing deal evidently pre-dates that chaotic period for the .uk registry by about a year.

Nominet chair Andy Green, who was installed months later as part of a broad institutional reform package, told members in late December that he was surprised to discover Haworth was going ahead with publication.

It was designed to help promote the company’s “Cyber business” in the US, but since that loss-making business has since been abandoned, the assets sold off for a dollar, the book currently has “no value to Nominet”, Green told members.

Judging by the Amazon blurb, it appears the focus of the book is now “digital leadership”, and one assumes it’s more about building the former CEO’s personal brand at Nominet’s expense.

On his LinkedIn page, Haworth said last month he decided to write the book during the Covid-19 pandemic and that it’s “written for senior execs and board members of meduim sized businesses who are looking to navigate their transformation journey, and what they should consider”.

Haworth is currently the UK CEO of Sweden-based Byggfakta Group, which makes software for the construction industry.

There’s no chance of getting the money back because there’s been no breach of contract, Green told members. Haworth owns all rights and liabilities to the book, so Nominet is not on the hook to buy “significant quantities” of it, he said.

Green added that he would be reluctant to approve such a deal had he been at the helm and was not aware of it until recently.

McCarthy wins Nominet director election

Kieren McCarthy, the former reporter who has spent much of his career bashing .uk registry Nominet in the pages of The Register, has been elected to its board of directors following a sometimes fractious campaign.

He won despite placing second to lawyer Jim Davies in the first round of voting, which saw CentralNic lawyer Volker Greimann eliminated. The vast majority of Greimann’s votes transferred to McCarthy in the second round. The results can be found here (pdf).

Turnout was a miserable 15.1%, almost 10 percentage points lower than it was in last year’s non-executive director election.

McCarthy is executive director of the International Foundation For Online Responsibility, the non-profit set up by .xxx registry ICM to hack around ICANN’s rules and give the illusion of legitimacy in the 2003 “sponsored” gTLD application round.

As such, he’s paid indirectly by GoDaddy, ICM’s current owner, which can’t have hurt his prospects in the election but GoDaddy says it did not vote in the election. Under Nominet’s controversial voting system, larger registrars get more votes, capped at 3% of the total.

With McCarthy standing on a platform of increased transparency, some Nominet members had pointed out the irony that IFFOR hadn’t published any board minutes in several years. He also faced criticism for using Nominet’s logo, apparently without permission, in his election mailshots.

McCarthy replaces Anne Taylor, whose three-year term is up.

Nominet “gaslighting” members over fees, candidate claims

Nominet has been accused of “gaslighting” its members over the issue of whether its membership fees are lawful by one of its non-executive director candidates.

Jim Davies is one of four signatories of the latest missive from the WeightedVoting.uk campaign, which is trying to get Nominet to address both its voting system and the fees it charges members.

Following the news last week that lawyer Ian Mitchell KC, hired by the campaign, had concluded that Nominet’s Articles haven’t technically allowed it to charge membership fees for the last 25 years, the registry issued a statement saying its own legal advice disagreed.

“That advice identifies significant flaws in the [Mitchell] advice that has been published. We remain confident in the legality of Nominet’s long-standing voting and membership arrangements,” Nominet told us last week, while declining to provide that advice.

It seems the same statement was provided to Nominet members, though only WeightedVoting was provided the new opinion.

Now WeightedVoting has published Nominet’s opinion, written by Andrew Thornton KC, which concludes that the weighted voting system Nominet uses — in which bigger registrars get more votes — is “entirely lawful and enforceable”.

What Thornton’s opinion does not address is the membership fees problem, despite Nominet’s suggestion that it covers both issues.

Now Davies and his supporters have written to Nominet’s current non-executive directors, asking again for the company’s annual general meeting, still apparently due to go ahead on Thursday, to be delayed.

They call Nominet’s statement “manifestly false” and call for the NEDs to exercise their legal duties or face “personal liability”.

Davies is one of three candidates to fill a vacating NED seat at the AGM this week when the results of a recently concluded election are announced.

His rivals are former reporter Kieren McCarthy and CentralNic lawyer Volker Greimann.

Nominet may owe its members millions, top lawyer says

Nominet has been charging its thousands of members annual subscription fees unlawfully for the last quarter-century, it has been claimed.

Ian Mitchell KC, who you may recall was hired by a handful of members to opine that Nominet’s voting system may be illegal, has now delivered a follow-up opinion saying that any subscription fees it has collected since 1997 should not have been paid.

Nominet non-executive director election candidate Jim Davies, one of the members who obtained the opinions, is now calling for Nominet to postpone its Annual General Meeting and the election, scheduled to take place next week, while these legal issues are addressed.

Mitchell’s opinion states that Nominet’s Articles allowed it to set a membership fee for members prior to August 29, 1997, barely a year after the company was founded, but that subsequent fees had to be set with a bylaws change approved by 75% of the membership.

That never happened, he says, meaning:

there has been no basis within the terms of the articles for subscriptions to be set and collected from and after 31st August, 1997. It follows, therefore, that the subscriptions which were collected ought not to have been paid.

Nominet has about 2,500 members, each of whom pay a £400 application fee and a £100 per year subscription. Clearly, over 25 years, that could amount to many millions of pounds.

But Mitchell also suspects Nominet could be protected by the UK’s statute of limitations, reducing its exposure to just the last six years and around £1.5 million.

Mitchell’s opinion was paid for by member Dulwich Storage, owned by former director Angus Hanton, as part of the Davies-led WeightedVoting.uk campaign, which is calling for Nominet to scrap its system that gives its members more votes depending on how many .uk domains they have registered.

Davies says he informed Nominet’s board about Mitchell’s latest opinion last week but has not received a response. So he’s now also written to Civica, the election services company that oversees Nominet ballots, to “to step in and adjourn the AGM”.

Postponing the AGM would also postpone the NED election in which Davies, former reporter Kieren McCarthy and CentralNic lawyer Volker Greimann are vying for an opening seat on the board. Voting closes in a couple of days.

While Mitchell called the subscriptions situation a “recipe for litigation”, Davies says he has no intention of suing Nominet. He says he wants, in Mitchell’s words, for “members [to] come together to see if it is possible to find a consensual way out of the mess which has undoubtedly been created”.

It’s not entirely clear what a solution would look like.

Scrapping the voting system in favor of one-member-one-vote would likely disadvantage candidates relying on winning with the backing of a small number of large registrars, which Davies believes is Greimann’s strategy.

Davies’ headline policy has been to slash .uk registration fees back to £2.50, while McCarthy and Greimann have platforms focused on transparency and member engagement.

Nominet has said that it believes its weighted voting system is lawful. The company has been contacted for comment on the latest legal drama.

Nominet gets new CFO

Nominet has recruited Vodafone’s head of finance to be its new CFO.

The company announced today that Carolyn Bedford will join on December 1, and will also take an executive director seat on the board.

She replaces Ben Hill, who was one of several directors removed from the board in a member coup in March 2021.

Last-minute bombshell in Nominet election — it may be ILLEGAL

Nominet’s current non-executive director election may be illegal, according to a legal opinion commissioned by one of the candidates.

Candidate Jim Davies, along with fellow former director Angus Hanton, say barrister Iain Mitchell KC has said that elements of Nominet’s voting practices are “clearly unlawful”, and they’ve asked Nominet to scrap them.

If Nominet accepts the opinion, it could mean the election — which is going on right now — could become a one-member-one-vote affair rather than the current system where you get more votes based on how many .uk domains you manage.

Davies and the other signatories to a letter sent to Nominet believe the company’s extremely complex “weighted voting” system is illegal under the UK’s Companies Act. They write:

This is a very serious issue for Nominet, particularly as there is an AGM and Board Election happening soon. Based on counsel’s opinion, we believe the only lawful way to conduct that meeting (and future meetings) would be one member, one vote.

Should Nominet agree and change the system, it would mean that big registrars such as GoDaddy and Tucows would get the same number of votes — one — as individual Nominet members.

This would most likely advantage IP lawyer Davies and fellow candidate Kieren McCarthy, who is a reporter rather than a registrar, at the expense of third candidate Volker Greimann, who works for Key-Systems, the large registrar owned by CentralNic.

Davies, in echoes of the PublicBenefit.uk campaign that led to a boardroom bloodbath last year, has set up a web site at WeightedVoting.uk to encourage fellow members to read the opinion and sign the letter.

While confidence in the company has arguably improved under its new leadership, member hackles were raised recently with the admission that Nominet had spunked millions of dollars on a failed attempt to enter the security market.

Voting in the NED elections began on Monday and runs until the end of the month. The results will be announced October 5, the day before Nominet’s AGM.

UPDATE: A Nominet spokesperson reached out with the following statement:

We acknowledge the receipt of a legal opinion commissioned by one of our members. We believe that our long-standing election process and voting rights are lawful and are being applied in accordance with our founding documents. We believe they have served and continue to serve both Nominet and its members well. Therefore, the election and voting will continue as planned. We will consult with our legal advisers prior to responding to our member.

It’s hustings season at Nominet

Hustings are very much in vogue in the UK right now. Two Conservative politicians have been clouding our airwaves, bickering over who should lead the country, for weeks, and now two candidates to join the board of .uk registry Nominet are following suit.

The London Domain Name Summit, a two-day, free-to-attend domainer conference in London next week, will host a debate between local lads Jim Davies and Kieren McCarthy, two of the three candidates for an opening non-executive director spot on Nominet’s board.

CentralNic lawyer Volker Greimann, the third candidate, who is based in Germany, will not be in attendance.

The debate between reporter McCarthy and IP lawyer Davies will take place next Tuesday at 1600 local time (1500 UTC) and will apparently be live-streamed for people not able to attend in person.

McCarthy, who according to Twitter chatter is a paid-up exhibitor, also gets a solo speaking spot on Monday at 1830 local time. Nominet, not an exhibitor, is hosting an event the same day.

All three candidates are standing for election at a time when Nominet has recently come under new leadership after several years of scandal that cumulated last year in a member coup.

The latest controversy emerged last month when it came out that Nominet blew about $23.5 million on an abortive attempt to get into the security market in the US, something the candidates all hope to address.

According to Nominet, all three candidates have their candidacy statements published in the members area of the web site. Davies and McCarthy have also published commentary on their respective blogs.

Voting opens September 12.

Nominet sold security unit for a dollar after blowing $23.5 million

Nominet has found itself out of pocket to the tune of $23.5 million after selling its CyGlass network security business for a dollar.

Chair Andrew Green told members last week that the .uk registry sold CyGlass to a group of its employees for the nominal sum after deciding to divest itself of non-core businesses. He said in an email:

As our involvement in CyGlass is now at an end, I am in a position to share the approximate cost of the unsuccessful investment in CyGlass with members. In addition to the $6.3m cost of purchase, Nominet invested around $16.0m in supporting the ongoing running cost of the business. Costs associated with closure will be c$1.2m – approximately equivalent to continuing to support the business for a further two months. That totals c$23.5m. Converting back to GBP over a relatively long period is complex, but the total cost over 2+ years is approximately £18m.

At the time it was sold, it was costing Nominet $600,000 a month to keep CyGlass running, he said.

The strategy of diversification from the core registry business was made under previous management and ultimately was partly the cause of last year’s boardroom bloodbath that eventually led to Green’s appointment on a back-to-basics platform.

Green told members that CyGlass “struggled as a result of changing work patterns following the Covid pandemic”, adding:

While there has been continuing interest in the offering from customers, the pipeline of opportunities has been slow in converting to new long-term customers. As a result Annual Recurring Revenue – a key driver of investor interest – has been growing imperceptibly

Now independent, CyGlass recently told the security trade press it is seeking partnerships to drive growth.

Nominet opens directorship nominations

.uk registry Nominet has opened the nomination period for one of its elected non-executive directors.

The are four elected NEDs on the company’s board, and Anne Taylor’s three-year term is up this year.

Only members may nominate, but you don’t need to be a member to be nominated.

Nominations are open until June 17, elections take place in September, and the winner takes his or her seat in October.

The pay is £37,000 per year, for up to 30 days’ work.

More details can be found here.

Meds regulator won’t say why it gets domains suspended

The UK Medicines and Healthcare products Regulatory Agency has declined to reveal which .uk domain names it has had suspended and the reasons for having them suspended.

In response to a freedom of information request published last week, the agency said it had 32 domains suspended in the last 12 months — it appears that refers to the 12 months to November 2021 — but declined to list them.

It said most of the domains were being used to breach the Human Medicines Regulations 2012, which regulates the sale of medicines, but declined to give specifics, citing a FOI carve-out related to ongoing investigations.

The MHRA said that it does not have a formal suspensions policy.

The agency is one of several that regularly asks .uk registry Nominet to take down domains believed to be involved in criminal behavior. The Police Intellectual Property Crimes Unit submits by far the largest number of such requests.