Regions

Mega Ltd to list in New Zealand through inactive shell firm

March 25
9:03 AM 2014

Mega Ltd, the cloud storage firm founded by Kim Dotcom, is planning to list in New Zealand by holding a reverse takeover of TRS, a shell company. The company intends to raise NZ$210 million or $179.4 million for the listing, Reuters reported.

New Zealand-based TRS said it has inked a conditional deal to purchase Mega by issuing shares which will ultimately result to Mega shareholders owning 99% of the inactive investment firm. Under the agreement, 700 million new TRS shares will be issued at NZ30 cents each. When that has been carried out, a share consolidation will take place. There are now over 1.1 billion shares issued by TRS which traded at about one-fifth of one New Zealand cent. This values the company at NZ$2.2 million, the report said.

Dotcom, an Internet entrepreneur, and others who worked on the now-defunct Megaupload founded Mega Ltd last year. The startup says there are around 7 million registered users for its encrypted, cloud based data storage platform. Although Dotcom himself is not a shareholder or director of Mega based on official documents, his wife holds a 26% stake through a trust. According to the website's platform, Dotcom, who is also known as Kim Schmitz is its principal strategist, the report said.

US authorities want Dotcom extradited to the US where he is set to face allegations of copyright infringement, money laundering and racketeering. They claim that the Megaupload website, which was closed in 2012, robbed film studios and record firms of over $500 million even as it produced criminal proceeds amounting to $175 million because it allowed users to store and share movies, TV shows and other materials which are copyrighted, the report said.

Dotcom is fighting the extradition but he was dealt a setback last week when the highest court in the country denied a bid by the Internet entrepreneur to access all the evidence against him and his three colleagues for their extradition hearing in July, The Guardian reported. 

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