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Cyber fugitive Kim Dotcom’s Mega in deal for NZ listing

WELLINGTON — Kim Dotcom, one of the world’s most-wanted cyber fugitives who is facing extradition to the United States from New Zealand, yesterday gloated over a deal that would see a firm he founded while on bail listing on the nation’s stock exchange and valued at NZ$210 million (S$228 million).

WELLINGTON — Kim Dotcom, one of the world’s most-wanted cyber fugitives who is facing extradition to the United States from New Zealand, yesterday gloated over a deal that would see a firm he founded while on bail listing on the nation’s stock exchange and valued at NZ$210 million (S$228 million).

The online storage company, Mega, will buy out listed shell firm TRS Investments via a reverse takeover, the companies said yesterday.

The Internet mogul, who was born Kim Schmitz in Germany before legally changing his name, is facing online piracy charges over the now-closed file-sharing site Megaupload.

He was living in a rural mansion in New Zealand in 2012 when law enforcement officers stormed his home in a raid requested by the US Federal Bureau of Investigation, arresting him, shutting down his site and freezing his bank accounts. He spent a month in jail and is now free on bail as he fights extradition, although his movements are restricted.

Dotcom yesterday took to Twitter 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 $210m company.’’

A reverse takeover is favoured by some companies as a way to save time and money from the traditional initial public offering, and can involve less regulatory scrutiny. In a guidance note, the New Zealand stock market said reverse, or back-door, listings are allowed but that it tries to ensure that adequate disclosure standards are maintained.

TRS will buy all the shares in Mega in return for 700 million new TRS shares. Once this transaction is complete, existing Mega shareholders would own 99 per cent of TRS, which would then change its name to Mega.

TRS shares, which had been trading at a fraction of a cent, closed up 900 per cent to NZ$0.01 yesterday after the announcement.

Mega CEO Stephen Hall said the firm chose the back-door route as it was cost effective and efficient, adding that there was no concern that it would get embroiled in Dotcom’s extradition battle. Launched last year, Mega claims about seven million registered users who have stored 860 million encrypted files. Agencies

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