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Kim Dotcom’s battle for his MegaUpload assets moves to Hong Kong

By | Published on Thursday 30 October 2014

Kim Dotcom

Kim Dotcom’s hit back on all things MegaUpload shifted over to Hong Kong earlier this week, where legal reps for the founder of the always controversial former file-transfer service are busy trying to recover frozen assets.

When the US authorities shut down MegaUpload back in 2012, accusing the firm of money laundering and rampant copyright infringement, there was actually concurrent activity on four continents. Servers were targeted in the US and Europe, key execs were arrested in New Zealand, and the firm’s offices in Hong Kong were raided.

Some $42 million of MegaUpload’s assets were frozen during the raid. And, perhaps unsurprisingly, Dotcom wants them back. And with America’s criminal action against him and his former company moving along like an iceberg in a particularly frosty winter (mainly due to extradition issues), he reckons he shouldn’t have to wait for that case against him to go through the motions before getting his HK loot back.

The Mega man’s lawyers filed legal papers on the matter back in April, and the case reached court this week. As with a lot of Dotcom’s arguments in the New Zealand courts, the case centres on the legal processes the local authorities went through when seizing his assets at the request of the Americans.

In Hong Kong, the argument is that the Chinese region’s Secretary For Justice did not provide a “full and frank disclosure” of the facts to the court when seeking the warrant to seize MegaUpload assets back in 2012. And because the warrant was issued without MegaUpload in attendance – the element of surprise being required – the Secretary For Justice had a duty to be extra vigilant in providing the judge with all the facts, Dotcom’s lawyers say.

And yet – said Dotcom’s legal man about the 2012 hearing, according to Torrentfreak: “In about six or seven minutes, the applicant dealt with the position of nine defendants and managed to freeze a massive amount of money. There was not one word about Megaupload, not a jot, not a tittle”.

A key fact missing from the 2012 court hearing was that MegaUpload the company had no US base, meaning criminal proceedings could not be formally filed against the business under American law. The US authorities have previously said that’s an irrelevant technicality, but Team Dotcom insist it’s a crucial point.

It remains to be seen how the Hong Kong court responds to the Mega team’s arguments. In New Zealand, the US music and movie industries have moved – with some success – to stop Dotcom reclaiming his frozen assets, on the grounds that if the content owners are victorious in their civil copyright action against the defunct file-transfer business, they’ll be claiming that dosh in damages.

Though if it can be shown Hong Kong authorities didn’t follow due procedure in seizing MegaUpload assets in the first place, that claim might be deemed irrelevant.

And if Dotcom got his Hong Kong fortune back, that would go a long way to paying his mounting legal fees. Even more so if he then successfully sued the Hong Kong authorities for breaking protocol and damaging his business in the process.

So, more fun times ahead.