Tudou CEO's court case may impact IPO

Source:Global Times Published: 2010-11-17 8:27:00

Screenshot of Tudou.com's front page. Photo: IC

By Liu Shengnan

Concern has been raised over the possibility that Shanghai-based video website Tudou's forthcoming IPO and listing on the Nasdaq could be harmed by a court case brought against the company's CEO by his ex-wife.

The case against Wang Wei has been brought by his ex-wife, Yang Lei, who is seeking preservation in litigation of Wang's property following their divorce earlier this year. Shanghai Xuhui District People's Court accepted the case on Monday.

As CEO and founder of the website, Wang owns 13.4 percent of Tudou. His shareholding faces being put under a transfer-restriction for the duration of the trial, and the court could require him to give some of his share holding to Yang as part of a settlement.

A public relations representative from Tudou told the Global Times that no one from the company was available to comment Tuesday.

"A big worry among potential investors will be that Wang's ex-wife will be given part of his holding, and if so, what influ-ence she will then exert on the company," a Shanghai-based venture capitalist who asked not to be identified told the Global Times Tuesday.

Tudou submitted its IPO application to the US Securities and Exchange Commission on November 9, through which it is looking to raise $120 million.

"Under the preservation in litigation, until the court reaches a judgment, the defendant's shares in the company can not be transferred or sold," a lawyer surnamed Hu from Shanghai Wan Fang Law Firm told the Global Times Tuesday. "More importantly, there will be serious damage to buyers' confidence during IPO publicity if the CEO of the company is in the midst of a court case."

Tuesday, Tudou's rival video website Youku filed for an IPO with the US Securities and Exchange Commission, through which it aims to raise $150 million and list on the New York Stock Exchange.

Posted in: Business, Metro Shanghai

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