Kim Dotcom’s Megaupload Ltd., the file-sharing website shut by the U.S. government, can renegotiate a freeze on more than $40 million of Hong Kong assets, a court in the city ruled.
The Court of First Instance today reaffirmed an order holding HK$330 million ($42.6 million) of assets belonging to Megaupload, while agreeing the process leading up to the original January 2012 freeze was flawed, according to court papers. The U.S. government, with Hong Kong authorities acting on its behalf, didn’t adequately detail efforts to serve a summons on the company, Deputy High Court Judge Garry Tallentire said. The non-disclosure didn’t appear deliberate, the judge said.
Dotcom, a German national, has been
fighting extradition from New Zealand to the U.S. since his 2012 indictment in the state of Virginia on racketeering, money laundering, copyright infringement and wire fraud charges. The Hong Kong ruling means Dotcom will have to wait a little longer to find out whether he can tap the frozen assets to help fund his legal defense.
“We are very pleased with today’s decision, which vindicates Kim’s position that he has been unfairly treated by the U.S. authorities,” John Rhie, of Quinn Emanuel Urquhart & Sullivan, which represents Kim and Megaupload, said in an e-mailed statement.
The court has not set a date for the next hearing.
“The court has found sufficient grounds to re-grant the restraint order after hearing the parties’ submissions, notwithstanding the finding of non-disclosure,” the Hong Kong Department of Justice said in an e-mailed statement.
Dotcom, who enjoys support from advocates of free file sharing, vowed to start an Internet Party in the U.S. earlier this week after a similar effort in New Zealand failed to win any seats in parliament.
The case is The Secretary for Justice v Kim Dotcom, 116/2012. Hong Kong Court of First Instance.
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