Kim Dotcom's new company Mega to list on New Zealand stock exchange
Company founded by indicted entrepreneur Kim Dotcom says it is worth HK$1.39b and trading will begin soon - with the help of reverse takeover
Associated Press in Wellington
Mega, the internet file-storage company launched last year by the indicted entrepreneur Kim Dotcom, announced plans yesterday to list on New Zealand's stock market.
Documents filed with the stock exchange put Mega's value at NZ$210 million (HK$1.39 billion), although it will be investors who ultimately determine the company's worth once trading begins.
Mega plans to achieve the listing through a manoeuvre that is known as a reverse takeover, using a small company that is already listed on the exchange as a vehicle.
Chief executive Stephen Hall said that he hoped trading would begin in early June.
The flamboyant Dotcom was born Kim Schmitz in Germany before legally changing his name. He founded the Hong Kong-based file-sharing site Mega-upload, which became wildly popular.
He lived for a time in Wan Chai, but moved to New Zealand and was living in a rural mansion there when dozens of armed law enforcement officers stormed his home in a dramatic 2012 raid. They arrested him, shutting down his site, and freezing his bank accounts. He spent a month in jail before being released on bail.
US prosecutors accuse Dotcom of racketeering by facilitating the widespread illegal downloading of songs and movies, and they are trying to extradite him and his colleagues to face trial in the US. The extradition hearing has been delayed several times and is now scheduled for July.
Dotcom argues that he cannot be held responsible for those who chose to use his site for illegitimate purposes.
Dotcom stepped down as a director of his latest venture in August, although his wife Mona Dotcom continues to own 26.5 per cent of Mega through a trust, according to company records.
Mega offers services similar to Dropbox and Google Drive, but says one point of difference is the high level of security it offers through encryption.
In documents filed with the stock exchange, Mega said it had seven million users who had stored 860 million encrypted files, and it planned to release new encrypted chat, video-conferencing and e-mail services.
US prosecutors, who have declined to comment on the case, have previously pointed to promises Dotcom made in his bail application that he would not reactivate Megaupload or start a similar site before the extradition case was over.
Dotcom used Twitter yesterday to comment on the listing plans, writing: "Indicted. Raided. On Bail. All assets frozen without trial. But we don't cry ourselves to sleep. We built #Mega from 0 into a [NZ]$210m company."
Under the plan, listed company TRS Investments will buy Mega and become 99 per cent owned by Mega shareholders. TRS will then rename itself Mega.
TRS shares, which had been trading at a fraction of a cent, were up 900 per cent yesterday after the announcement to NZ$0.01. A major TRS shareholder is Paul Choiselat, who faces charges of market manipulation in Australia in relation to his previous work there as a director of two listed companies.
Hall said those charges predated Choiselat's involvement with TRS and Mega.
"It's not relevant to this business," he said.
Dotcom last week lost a ruling in New Zealand's Supreme Court as part of his legal battle to try to avoid US extradition. He was seeking full disclosure of the US evidence against him at the extradition hearing, but the court ruled a US summary of the case would suffice.