Dotcom's Mega to join NZX
A major shareholder of TRS Investments, the company through which Kim Dotcom's online business Mega plans to list on the NZX, is fighting market manipulation charges in Australia.
The Australian Securities and Investments Commission (ASIC) laid 25 charges relating to market manipulation against Paul Gerard Choiselat in December. The case is due for a court date next month.
Choiselat is the controlling shareholder of TRS through his companies Beconwood Securities and Beconwood Superannuation, which together own 73 per cent.
The ASIC charges relate to his previous directorships of ASX-listed companies Q Ltd and Jumbuck Entertainment.
Twenty of the charges allege the disclosures of his interests in the companies were false as they excluded interests held though various offshore entities registered in the British Virgin Islands and managed from Hong Kong. A further five allege manipulation of the share prices in Q and Jumbuck.
This morning TRS announced plans to acquire Mega in a reverse takeover through the issue of 700 million new shares to Mega's owners.
Mega chief executive Stephen Hall said he hoped the transaction could be completed and Mega could be listed on the NZX by the end of May.
Mega had generated significant interest from potential investors and listing on the NZX would let investors participate in its "ongoing growth", he said.
The company had no immediate need for fresh capital and had no immediate plans to offer new shares to the public, he said.
"It is possible but there is nothing definite at the moment. It has significant cash reserves but it is a rapidly growing business so it does consume capital."
The listing will give Mega's existing shareholders, who comprise interests and associates of Dotcom, and a handful of backers, the opportunity to sell down their holdings.
Mega will be valued on paper at $210m under the terms of the transaction, but the real value of the firm will be determined by its share price once trading commences.
"As far as I am aware shareholders are predominantly here for the long-term ride and aren't looking to cash-out quickly," Hall said.
Hall said TRS' existing investors, some of whom had shareholdings that were too small to be marketable, might be given an opportunity to buy more shares in Mega through a share purchase plan.
Hall said he was not aware of any regulatory obstacles to the proposed backdoor listing "but you never know".
Shares in TRS, a listed shell company, rose half a cent to 0.6c on market after the announcement, valuing the company at $6.6m.
Mega was launched in January 2013, a year after the seizure and closure of Dotcom's MegaUpload service by United States authorities. It claims 7 million registered users, though Hall said only tens of thousands of them were paying customers.
Mega said more than 20,000 new users were signing up each day and the service was currently being used to host nearly a billion files.