Police Freeze Mega Shares in Money Laundering Investigation
27 Aug 2014
While facing an extradition to America for his role in the so-called “Megaupload Conspiracy”, Kim Dotcom launched a new cloud storage venture, Mega.
Now, this new service is being indirectly linked to a crime ring by local authorities.
Today Mega announced that one of its major shareholders William Yan, also known as Bill Liu, is suspected of having connections to a large crime ring. Pending further investigation the police has put the 18.8% share held through Yan’s companies under restraining order.
Yan has not been formally charged and through his lawyer denied any wrong-doing. Mega itself is not believed to be connected to the alleged crimes.
“The Police have commented that their action does not affect any innocent third parties (such as Mega) who have had business dealings with Mr Yan,” Mega CEO Graham Gaylard says commenting on the news.
“Mega has been extremely diligent to ensure that all its operations are fully compliant with all legal and regulatory requirements. Mega does not undertake any illegal activities and does not wish to be associated with any such activity,” Gaylard adds.
Kim Dotcom says that William Yan was properly screened before he became a shareholder. The New Zealand entrepreneur, who himself is accused of money laundering by the United States, said that no alarm bells went off at the time.
“He is an investor who put money into Mega because he believed in it. I had no idea he had any problems or issues,” Dotcom told the Herald.
The news comes at an unfortunate time for Mega, which intends to go public on the New Zealand stock exchange through a backdoor listing. As a result of the restraining order the trading in shares of the backdoor listing vehicle TRS has been temporarily halted.
Despite the problems of its shareholder, Mega’s CEO doesn’t believe the company will be affected. Gaylard stresses that all funds received by Mega were paid by Yan’s lawyers through banks that operate under stringent anti money laundering policies.
“Mega has never had any reason to suspect that such funds resulted from any illegal activity, and the Restraining Order will not affect the operations of Mega,” Gaylard says.
“For us it is business as usual.”