Technology investor Jump Capital has walked away from a deal under which it would have injected $8 million into Wilson Neill subsidiary Radionet.
Jump's move comes after Paul Hyslop, a former director of Wilson Neill, was implicated in an insider trading scandal involving Fletcher Paper shares.
Mr Hyslop has alsobeen criticised for being a heavy trader of Wilson Neill shares during the negotiations with Jump.
Jump executive Bryan Mogridge would not be drawn on whether Mr Hyslop's dealings had coloured its decision, saying only that conditions had altered.
"We just decided not to do do the deal," he said. "It was an amicable parting."
Mr Hyslop was a key negotiator during the eight months Jump was looking at Radionet, a high-speed wireless communications business.
Those negotiations culminated in Jump - whose backers include Sir Michael Fay and David Richwhite - signing a heads of agreement with Wilson Neill to take a 30 per cent stake in Radionet, and manage the company.
Wilson Neill general manager Phil Vosper said the group had alternative funding from private investors who he declined to name.
Parties who had intended to participate in the Radionet business plan alongside Jump had confirmed their support, he said.
Included in that group was Ericsson Communications.
"Radionet continues to progress with its national roll out program," said Mr Vosper.
Furthermore, Wilson Neill had signed a heads of agreement to buy a business which would fit well with Radionet.
Mr Vosper would not comment on Mr Hyslop.
"I think it is inappropriate for me to comment on why they withdrew," he said. "There are a number of factors that probably combined, I suspect."
Mr Vosper also said he had responded to a letter sent to the company by Wilson Neill shareholder Ian Andrews, complaining about Mr Hyslop's dealings in the company's shares.
"We don't have any problem with anybody scrutinising Mr Hyslop's transactions," Mr Vosper said.
The details of Mr Hyslop's transactions had been passed on to the Securities Commission.
"Our shareholders are very supportive and very loyal," Mr Vosper said. "I get rung by a number of them every day and without exception they are very supportive and confident of the company's ability to go forward."
