Swedish authorities investigate claims Pirate Bay deal was only a bluff intended to boost the price of its stock.
Global Gaming Factory is supposed to finalize its acquisition of Swedish BitTorrent tracker site the Pirate Bay at a shareholders meeting this Thursday, but new reports of suspected insider trading make the deal look even murkier than ever before.
According to the Local, Swedish cops have launched a criminal probe investigating claims that the GGF’s plan for acquiring the Pirate Bay was merely a ruse intended to boost the price of it stock.
“I have received a complaint about Global Gaming Factory but I can’t say more than that because the preliminary investigation is classified,” said Anne-Marie Helande of the Swedish Economic Crime Authority and lead investigator.
The irregularities are centered around the fact that nearly one week prior to the announcement that it was going to buy the Pirate bay its stock price made such a dramatic rise that it was briefly suspended by Aktietorget, the stock market where it’s traded.
Its stock was then suspended for a second time last Friday, where it remains today, until it can “show that the whole funding is at hand [to purchase the Pirate Bay] in accordance with what the company reported.”
Aktietorget CEO Peter Gönczi alluded to this growing list of concerns today when he said that “aside from the money there are obviously a series of other questions that need to be straightened out.”
The first concerns arose back in July when Wayne Rosso, the former CEO of Grokster who had been brought in to negotiate deals with the entertainment industry, left GGF over “very strong doubts that the funding is in place.”
Then last Thursday the CEO of Peerialism, the company that is supposed to partner with GGF to help it “strengthen its strategic position in the international digital distribution market,” said that it hasn’t seen a dime of the money GGF promised it.
It was then noted that former GGF board member Johan Sellström reported Pandeya to Swedish cops over more than 6 million kronor ($853,752 USD) in unpaid debts.
Pandeya is also alleged to owe some 780,000 kronor (110,987 USD) in back taxes.
If all this wasn’t enough already today GGF’s Chairman of the Board Magnus Bergman submitted his resignation.
For what it’s worth, GGF CEO Hans Pandeya maintains that all is well and that the deal will go through as planned this Thursday.
“Nothing can stop it,” he says.
Maybe so, but things sure aren’t looking so good in the long run. Even if it does somehow manage to pull together enough cash to satisfy its financial obligations there’s the bigger concern of creating a viable online media store that will lure in enough users to turn a profit.
And oh yeah, there’s the little matter of getting permission from the record industry and movie studio cartels to allow it to offer content on-demand and at reasonable prices. Getting them to agree to both is the ONLY WAY it can succeed when its competing against the large selection and availability of free content at its brethren sites like Mininova and Demonoid.
I guess we’ll find out what happens soon enough.