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South China Morning Post – by Lana Lam
Internet entrepreneur Kim Dotcom won the right to get his hands on HK$330 million in assets frozen in 2012 by the Hong Kong authorities – but the victory was short-lived as a High Court judge immediately reimposed an order to keep the assets under lock and key.
Negotiations will now take place between Megaupload founder Dotcom’s legal team and the Department of Justice in Hong Kong on the terms of conditions of the new order. The assets freeze was imposed by Hong Kong authorities on behalf of the administration of US President Barack Obama.
The initial order in 2012 was made “ex parte” which meant Dotcom was not given the chance to argue against it. Today’s ruling allows his legal team to do so.
Dotcom – who was a resident of Hong Kong from 2003, and lived in a penthouse suite at the Grand Hyatt in Wan Chai – is currently on bail in New Zealand ahead of an extradition hearing next year.
US prosecutors claim Dotcom’s Megaupload website and its founders engaged in mass copyright fraud for more than five years, earning upwards of US$175 million.
They want Dotcom and his associates to face trial in the United States on charges of internet piracy, copyright breaches and money laundering.
In the High Court this morning, Deputy High Court Judge Mr Garry Tallentire set aside the court order that was granted in January 2012 that led to the seizure of millions of dollars in assets belonging to the now-defunct Megaupload website, an online platform where users shared music, movies and photos among other things.
Megaupload was a Hong Kong-registered company.
But at his discretion, Tallentire decided to immediately re-grant the 2012 order.
Lawyers for Dotcom had earlier argued that the 2012 order should be lifted because of “material non-disclosure” in that the Department of Justice in Hong Kong had failed to provide “full and frank disclosure” of the facts when it applied to freeze the assets of Megaupload Limited, a Hong Kong-registered firm.
Tallentire also awarded costs to Dotcom’s legal team, which means the US government will pay Dotcom’s legal fees incurred while trying to unfreeze the assets.
In January 2012, more than 100 customs officers raided homes and offices in Hong Kong linked to Megaupload and seized computers and servers as well as HK$300 million in bank savings and investments.
Kim Dotcom and his now ex-wife Mona pose before a view of Victoria Harbour. Photo: Kim.com
New Zealand authorities also staged a dramatic raid to arrest Dotcom at his holiday home that year, just as Dotcom was about to extend his rental contract with the Wan Chai Grand Hyatt where he lived with his then-wife, Filipino ex-model Mona Verga, and their young children.
“Mona and I have great memories in Hong Kong,” Dotcom told the South China Morning Post in an interview last year. “She gave birth to two of our kids in Hong Kong and it was heartbreaking to lose our home. It’s so sad because we renovated our home and were going to extend our agreement with the Grand Hyatt for another three years, but then the unthinkable happened.
“Because all our assets were seized we could not pay the rent. All of our items had to be put in storage and our home was gone.
“I miss the good Hong Kong life,” he had said, complimenting the city’s ease of doing business. “Hong Kong has an electrified soul; the colours, the lights, the noise, the good people.”