Jared Savage

Jared Savage is the New Zealand Herald's investigations editor.

Dotcom's debt repayment a publicity stunt says disgruntled creditor

Dotcom said last month he always planned to pay the debts of Megastuff, despite having no legal obligation to do so. Photo / NZ Herald
Dotcom said last month he always planned to pay the debts of Megastuff, despite having no legal obligation to do so. Photo / NZ Herald

Kim Dotcom has paid back about $400,000 of up to $900,000 he owes to creditors — but one sees the late payment as a public relations ploy.

It was revealed the internet tycoon's company Megastuff, set up to run his mansion, owed 80 creditors between $69 and $133,916 since his arrest in a raid on the mansion in January 2012.

At the launch of his Internet Party this week, Mr Dotcom said his accountants, Cleaver Partners, had received $600,000 to settle the outstanding debts.

Don Cleaver of Cleaver Partners yesterday said about $400,000 had been paid to about 70 creditors.

He said the total amount owed was between $850,000 and $900,000.

"We've got the money and we're paying them.

"It's been a long process. Some of the creditors are being a bit naughty and asking for too much and we're slowly getting through them and verifying the amounts."

He said at one point discussions were held with creditors about paying them in shares in Mr Dotcom's new company Mega.

"The idea was popular but considered too complicated tax-wise."

Paul Davis supplied uniforms to the staff at the Dotcom mansion and is one of the creditors who spoke publicly to the Herald last month. He was owed $1138 and said yesterday he was paid as promised.

"But I don't think it's his conscience. We had absolutely no movement on this for two years until the Herald story and the TV stations following up. It was pressure which was needed, so I think he's desperately trying to get some good PR."

Mr Dotcom said last month that he always planned to pay the debts of Megastuff, despite having no legal obligation to do so.

Documents lodged with the High Court at Auckland during 2012 show $634,000 of debt was declared by Mr Dotcom's lawyers, who tried to get access to money seized in the raid to pay the debts.

Opposition by police kept the money tied up, with the courts accepting in August 2012 that there was no "legal ability" to release Mr Dotcom's restrained money to pay debts of Megastuff.

Millions of dollars of assets were seized in raids and Mr Dotcom did not have a legal obligation to pay the debts of the limited liability company.

But creditors became more frustrated in recent months as Mr Dotcom started a high-profile marketing campaign for his Good Times album, took helicopter trips to the Rhythm and Vines music festival and a weekend at Huka Lodge and started the campaign for his Internet Party.

A lack of funds was also cited in the departure of Wayne Tempero, Mr Dotcom's longtime bodyguard, who was being paid half of what he was getting before the raid.

Mr Dotcom has since obtained an injunction to stop Mr Tempero giving a tell-all interview, and four security guards who worked for the tycoon are also believed to be about to file proceedings in the High Court to seek backpay.

The Internet Party yesterday claimed to have signed up more than 1,000 since starting its membership drive on Thursday.

Internet Party chief executive Vikram Kumar said membership details were being checked before submissions to the Electoral Commission.

The commission will then verify those members before the party is officially registered, a process expected to take about six week.

Last night Mr Dotcom pulled out of a scheduled appearance on TV3's The Nation to discuss his new party.

- NZ Herald

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