Cyber fugitive Dotcom mocks authorities with $179m listing

Kim Dotcom, one of the world's most wanted cyber fugitives, has gloated over a deal that will see a cloud storage firm he founded while on bail listing on the New Zealand stock exchange and valued on paper at NZ$210 million ($179 million).

The flashy internet mogul, who also goes by the name Kim Schmitz, is fighting a bid by US authorities to extradite him from his lavish estate in New Zealand to face online piracy charges over the now closed file sharing site Megaupload.

The New Zealand government in early 2012 arrested Mr Dotcom at his mansion near Auckland in a SWAT-style raid requested by the Federal Bureau of Investigation. Mr Dotcom is free on bail as he fights extradition although his movements are restricted.

After a reverse takeover deal was announced between cloud storage company Mega Ltd and TRS, an inactive local investment firm, Mr Dotcom tweeted: "Indicted. Raided. On Bail. All assets frozen without trial. But we don't cry ourselves to sleep. We built #Mega from 0 into a $210m company."

TRS said in a statement to the New Zealand stock exchange it had a conditional agreement to buy Mega Ltd through a share issue to Mega’s shareholders, which will result in them holding 99 per cent of TRS.

The plan, expected to be completed by the end of May, would see the issue of 700 million new TRS shares at 30 NZ cents each, after which TRS’s current 1.1 billion shares would be reduced to about 7 million.

Mega Ltd, launched in 2013 by Mr Dotcom and several other people involved in Megaupload, offers encrypted, cloud-based data storage. It claims about 7 million registered users.

New Zealand company records show Mega Ltd’s shareholders include Mr Dotcom’s wife, through a trust, with a 26 percent stake. Mr Dotcom is not listed as a shareholder nor a director, but on the Mega website he is called principal strategist.

Mr Dotcom, a large, ebullient German national with New Zealand residency, could not be reached for comment.

He and three colleagues from Megaupload were arrested in 2012 on US charges of online piracy, money laundering and racketeering.

The four men have been battling New Zealand and US federal authorities through the courts since over access to funds, admissibility and disclosure of evidence, and the legality of search warrants. An extradition hearing is tentatively scheduled for July.

US authorities allege Megaupload cost film studios and record companies more than $500 million and generated more than $175 million by encouraging paying users to store and share copyrighted material, such as movies and TV shows.

Mr Dotcom says Megaupload was merely an online warehouse and should not be held accountable if stored content was obtained illegally.

Reuters