Media start-up Iostar has gone into liquidation, after it was unable to raise funds to finance its acquisition plans.

The news comes just weeks after the company's newly appointed chief executive, Dawn Airey, quit after just one week in the job, citing a "significant breach" of her contract by the firm.

The company said in a statement that it had considered a number of options to continue the business, but added it had "not proved possible to implement such plans in the time available to the board having regard to the current financial position of the company."

"Accordingly, the directors have seen no alternative but to take immediate action to place the company into liquidation and have instructed David Rubin & Partners to commence these proceedings. Iostar's creditors have been informed of this decision," the statement said.

Creditors are believed to include board members who put their own money into the company, including Airey and actor Stephen Fry, who is fronting three documentaries for the company in association with his own production company, Sprout.

Tim Carron Brown, the company's chief fundraiser, was suspended from the board last month after it was revealed that little of the £32.5 million funding needed for acquisitions of smaller companies was actually available.

The company launched last autumn with plans of being a "multimedia giant" combining TV, film and theatre production, talent management, branding consultancy and a model agency. It was believed to be looking to buy agency Models 1, West Park Pictures, marketing company Branded and Sprout.