Cliff Stanford: The maverick Internet pioneer

No one can ever say that Essex boy Cliff Stanford hasn't been prepared to take a risk.

That particular trait may have proved troublesome as he pleads guilty to unlawfully intercepting emails belonging to John Porter, son of disgraced former politician Dame Shirley of Westminster 'homes for votes' fame. But it's also given the divorced father of one a unique career that brought the Internet to UK homes and made him a multimillionaire with a taste for unconventional investment.

Although most famous for setting up Demon Internet, the first ISP in Europe, in 1992 and netting £30m after selling it on to Scottish Telecom (later re-branded Thus) only six years later, Clifford Martin Stanford's beginnings were inauspicious.

He was born on 12 October 1954 in Southend-on-Sea, but his civil servant father left home when Stanford was just 11, leaving his mother to support him and his sister. He quit the local grammar school at 16 to become an accountant, a logical step given the book-keeping experience he'd gained from an early age looking after the family finances.

By 25, Stanford was showing more entrepreneurial flair than a career in accountancy normally implies. In 1979, he quit his tax-related job to set up his own software company, ImPETus, which developed applications for Commodore PET machines. As the technology changed, he moved on to establish Demon Systems, which sold modems and network equipment.

Like many early adopters of online technology in the UK, Stanford joined Cix, the country's first commercial online conferencing system. In 1991, he started a conference there called Tenner A Month, to see whether enough people were interested in contributing the eponymous sum to pay for shared access to the Internet. At the time, going online was mainly the preserve of academia and big business, with leased line connections costing upwards of £20,000 per year — the idea was radical.

Cix was a good place to recruit solvent enthusiasts, and by June 1992 about 200 people had signed up to the fledging Demon Internet service. Stanford provided the capital to get it going even though the initial subscriber base only provided half the revenue necessary to make a profit.

The offering was based around a single Apricot 486 machine with eight modems connected to an Internet feed from Pipex, with a local access network based around putting PCs in volunteers' homes. By the time it was sold to Scottish Telecom in 1998 for £66m, the organisation had grown to 172,000, a hundred times Cix' subscriber base.

That sale was one of the first of the Internet boom of the late 1990s, and made Stanford an early dot-com millionaire. The company valuation was controversial due to its losses of £3 million a year on revenues of £18 million, but over the next couple of years it became seen as a relatively mild example of the Internet's peculiar financial effects.

Stanford kept his interest in Internet access by setting up an investment vehicle, the Redbus Group, which in turn invested in hosting company Redbus Interhouse. He also became involved in films, the music business, glassmaking and a wide range of other investment opportunities unconnected with Internet technology. A £150,000 Rolls Royce Silver Spur, a Piper Saratoga bi-plane, a private jet and a house in Spain were also involved.

He most recently told the court that his assets now totalled some £300,000.

Examples of start-ups that the company propagated were a landmine clearing organisation (Redbus Landmines Disposal Systems) and a company selling platformed boats for divers (Redbus Workboats).

But it was during his Redbus era that Stanford's trouble seemed to start. Very soon after starting the company...

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...he gained new-found notoriety in the wake of a tabloid kiss-and-tell scandal. A News of the World spread carried claims of a champagne fuelled romp with two table dancers at the Claridge's Hotel (from which he was subsequently banned) and on his jet, although he denied the story.

Then, in 1999, his Spanish au pair, Rocio Wanninkhof, was abducted and killed while visiting a fair at her home-town. Although he offered a reward at the time and again in 2003 to anyone who could provide information, no one has ever been convicted for her murder.

By June 2002, however, Stanford hit the headlines again when he sensationally resigned his position as non-executive deputy chairman of a Redbus Interhouse, along with two other directors. The move had followed a row with the chairman, John Porter, a long-term friend and one of the first investors in Demon Internet.

Their dispute centred on the fact that Stanford, true to form, wanted to expand the colocation and Internet hosting company's operations, while Porter was keen to introduce cost-cutting measures in line with the difficult economic environment following the dot com bust. Stanford had already launched several attempts to take control of Rebus Interhouse by ousting its board, but had proved unsuccessful.

But things were about to get even more difficult. By August 2003, Redbus Interhouse sued him for allegedly using £85,000 of company funds to renovate his villa in Malaga a couple of years earlier.

By September 2003, Stanford had sold his stake in the organisation after seeing the value of his shareholding plummet from £150m five years before to about £3m at that point, in what must have been a blow to a man who was avowedly motivated by money.

To make matters worse that month he was arrested, along with private investigator and former Redbus employee George Liddell, by the National Hi-Tech Crime Unit. Stanford was charged with conspiracy to blackmail and of intercepting communications under the Regulation of Investigatory Powers Act 2000, but denied the allegations.

These centred on claims that during his bitter boardroom battle with John Porter, Stanford had hired Liddell to install a mirror wall in Redbus Interactive's email system, which made a copy of each email that John Porter received and sent it to a separate account that Stanford accessed.

Among the emails was correspondence between Porter and his mother, Tesco heiress Dame Shirley, which revealed that she was loaning him money and taking decisions on what to do with multiple millions of pounds in her possession. This was despite the fact that she had claimed she was unable to pay a surcharge of £40m for political corruption levied by the House of Lords because her global assets amounted to only £300,000.

In the end, she was forced to pay £12.3 million in full and final settlement of the scandal.

But, although Dame Shirley may have got her just desserts, the upshot of all this manoeuvring is that Stanford has now been fined £20,000 and received a six-month suspended sentence. The risk taker may have taken one risk too many.