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Respected Investor Mr. Hanwei Guo Takes Legal Action Against Tencent Music, Co-President Guomin Xie and Related PartiesLegal counsel to Mr. Hanwei Guo (the "Plaintiff"), a distinguished investor that previously invested the equivalent of tens of millions of dollars in Ocean Interactive Technology Co. (commonly referred to as "Ocean Music"), has filed a motion for discovery in the United States District Court for the Southern District Of New York (CIVIL DOCKET FOR CASE #: 1:18-mc-00561-JMF) in order to obtain information for use in a pending arbitration (the "Arbitration") in China to regain control of assets stolen by Tencent Music Entertainment Group's ("Tencent Music") Co-President Guomin Xie. Mr. Guo was the victim of fraud and coercion at the hands of Mr. Xie, who used misinformation, threats and intimidation to compel the Plaintiff to sell his equity stake under duress. Mr. Guo is currently taking action against Tencent Music, Mr. Xie and various other parties before the China International Economic and Trade Arbitration Commission ("CIETAC"). Today's request to obtain limited discovery from Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch Inc., Pierce, Fenner & Smith Incorporated, and Morgan Stanley & Co LLC (collectively the "Underwriters") is intended to help make available important information that supports a fair Arbitration process. With respect to damages, Mr. Guo is requesting that Arbitration respondents, including Mr. Xie, return various percentages of his equity stakes of Tencent Music and that they collectively compensate him for economic loss. A spokesperson for Mr. Guo added: "We believe a review of the circumstances and facts surrounding this matter clearly show that Mr. Xie, who is now Tencent Music's Co-President, used unlawful intimidation tactics and threats to defraud a respected, honorable investor. It is unfortunate that Mr. Xie and other respondents have not rigted this wrong prior to Tencent Music's December 12 initial public offering in the United States, where shareholders and regulators hold companies and their officers to high standards of conduct." A full copy of the filing, which includes a description of the fraud, can be accessed here. Tai-Heng Cheng of Quinn Emanuel Urquhart & Sullivan, LLP is representing Mr. Guo in the United States. Oscar Chen of Duan & Duan (Beijing) Law Firm, is representing Mr. Guo in the CIETAC arbitration. *** Additional Details In 2012, Mr. Guo - upon repeated invitation from Mr. Xie - invested approximately $26 million (RMB 180 million) in Ocean Music. Mr. Xie claimed that Ocean Music would make a profit the following year and "go public" in the United Stated within three years, representing the possibility of huge investment returns for Mr. Guo. Based on these promises, Mr. Guo provided capital to establish what ultimately became Tencent Music and other top music streaming companies in China and overseas. What followed Mr. Guo's investment involved trickery, embezzlement and intimidation from his purported fellow investors. From May 2012 to September 2013, despite not having provided any capital to the companies established with Mr. Guo's funds, Mr. Xie had complete control over all operations and management of the entities. This prevented Mr. Guo from having access to information about the real operations, debts and credit standing of Ocean Music. Though Ocean Music had recently received capital infusions totaling $100 million during this time period, Mr. Guo was told that the business was failing and it was suggested he minimize his losses by selling his shares - but for much less than their true value. Mr. Xie and his associates even went so far as to hire an individual to threaten Mr. Guo with government investigation if he refused to complete the sale that they had orchestrated. Faced with threats and without access to information that would have revealed Ocean Music's true value, Mr. Guo sold his shares under duress. Having stolen Ocean Music's equity, Mr. Xie proceeded to grow the company into a music streaming giant before ultimately merging Ocean Music with its chief rival to create the world's largest online music platform, Tencent Music. Far from being a Chinese-centric company, Tencent Music has assets around the world and is preparing for a reported $2 billion initial public offering supervised by the U.S. Securities and Exchange Commission. Mr. Guo has been approached by one of Mr. Xie's conspirators, who presented the documentary proof concerning the conspiracy of Mr. Xie to defraud and threaten Mr. Guo. Following an investigation and review of materials proving the fraud, Mr. Guo has decided to go forth with the arbitration before CIETAC against Tencent Music, Mr. Xie and various parties.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181206005770/en/ |
