National Party donor is biggest shareholder in Dotcom's Mega

Chinese National Party donor emerges as biggest shareholder in Dotcom’s Mega

By Paul McBeth

May 9 (BusinessDesk) - Embattled internet entrepreneur Kim Dotcom has reduced his stake in his data storage and encryption business, Mega, with the largest shareholder now listed Shen Zhao Wu, a donor to the National Party.

Dotcom’s stake, which is held by his wife, Mona, via MD Corporate Trustee Ltd, is now 17.7 percent, down from 26 percent previously, according to documents filed with the Companies Office. That makes Dotcom the third-biggest shareholder in the company behind Wolf Ortmann with 18 percent.

Mega’s biggest shareholder is now Shen Zhao Wu with 18.3 percent, a regular donor to the National Party through his Contue Jinwan Enterprise Group.

Contue donated $49,220.18 to National in January, according to Electoral Commission returns, and Shen and his wife, Susan Chou, were reported by the New Zealand Herald to have made a $200,000 donation in 2010.

Dotcom has been negotiating with the left-wing Mana Party to form a political alliance opposed to the re-election of the National Party, which has been hit in recent weeks by a series of political scandals involving close links to Chinese investors in New Zealand.

Dotcom is looking to list Mega on the NZX through a reverse takeover and is spending heavily to support a lavish lifestyle, court action fighting his extradition to the US on conspiracy and money-laundering charges relating to copyright breaches, and his political vehicle, the Internet Party.

The Mega shareholding reshuffle also saw two new shareholding companies emerge: TEY Trustee Ltd and New Vision Trustee Ltd, with a combined 15.8 percent, held through Jesse & Associates lawyer Jesse Nguy, a former president of the now-defunct New Zealand Chinese Business Chamber.

Auckland-based Dotcom staged a media launch for Mega in early 2013 to replace Megaupload, his previous venture which was shut down in a US-led operation that alleged the file-sharing firm and its owners had committed mass copyright infringement and money laundering of more than US$500 million. He and co-accused Finn Batato, Mathias Ortmann and Bram van der Kolk are fighting extradition to the US where they faces the charges.

Dotcom stepped back from a hands-on role at Mega last year, resigning as a director in August to focus on his extradition hearing, music streaming website and political aspirations via the Internet Party. He doesn’t hold any directorships in New Zealand, and his only direct shareholding is in RSV Holdings.

Mega is aiming to list on the NZX through a back-door listing via penny-dreadful shell company TRS Investments. The deal would see TRS buy 100 percent of Mega by issuing 700 million new shares to Mega shareholders at 30 cents apiece, after undertaking a 148 for 1 consolidation. Mega shareholders would own 99 percent of TRS, which would adopt Mega as its name.

Mega chief executive Stephen Hall has said the company has no immediate plans to raise capital, though it would offer a share purchase plan to let those investors diluted in the share consolidation build a meaningful stake.

TRS and Mega were hoping to complete the deal by the end of May, but last week pushed out the timeline to June 30. TRS expects to issue a notice of special meeting, where shareholders would vote on the transaction, next month.

When the deal was announced in March, Paul Choiselat, the controlling shareholder of TRS Investments with 73 percent, declined to say whether he would back the deal.

Choiselat is currently facing 25 charges relating to market manipulation and concealing his interests in listed companies while he was a director of Q Ltd and Jimbuck Entertainment. The charges were laid by the Australian Securities & Investment Commission in December.

(BusinessDesk)

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