Dotcom dosh linked to immigrant under cloud

Kim Dotcom, left, and William Yan.

The new-found wealth of entrepreneur Kim Dotcom came in part from an immigrant who has had at least $15 million in assets seized in a money-laundering inquiry.

William Yan, also called Bill Liu, is facing no criminal charges while Dotcom has no connection to the investigation. The fortunes of Dotcom and Mr Yan merged in the cloud storage encryption company Mega about a year ago.

Dotcom confirmed yesterday that his family trust had sold shares to Mr Yan and seven other new shareholders. "I had no idea anything like this was going on. He's one of several investors.

"He invested a lot of money. He believes in the company."

Mr Yan's 18.8 per cent share of the business is now out of his control and in the care of the Official Assignee after being seized by police under a law aimed at freezing the proceeds of crime.

Police raided Mr Yan's luxury Metropolis Tower apartment last week. The shares were taken along with cash, shares, jewellery, fine wine and a Bentley motor car. The total value of assets currently restrained is estimated to be at least $15 million.

The raid is linked to an ongoing police investigation which has seen millions of dollars seized from others.

Dotcom said he had met Mr Yan several times at his mansion in Coatesville to talk business.

"We screened the guy before he invested. To me, he looked like a normal businessman. He told me he sold a public listed company he owned in China and made $200 million from that."

He said the seizure order was a surprise. "We're not happy about it."

Dotcom said he separated from management in Mega nine months ago to focus on the Internet Party, which has since merged with the Mana Party for this election.

He said he did not think the Yan case would affect the Internet-Mana alliance, which he funded with a $3 million donation.

Mega chief executive Graham Gaylard said it was still on target for an October 31 backdoor listing on the New Zealand stock exchange.

Mr Gaylard pointed to a police statement which said the action did not affect "any innocent parties who have business dealings with Mr Yan". Mega was one of those parties, he said. "We're squeaky clean," he said.

Mr Yan has a controversial history, having been granted citizenship by Labour Cabinet minister Shane Jones against official advice. Investigations later found no wrongdoing.

The raid on Mr Yan's property was sparked by an ongoing inquiry into the finances of a friend of his, Yingzi Zeng, who faces no charges.

Mr Yan's involvement in Mega was hidden behind companies and trusts.

Inquiries show Mr Yan first bought 8887 shares in Mega through MGL Investments Ltd whose sole director and shareholder, Zhihong Xu, is listed at the same residential address as Ms Zeng.'

All of the those shares were sold in May and Mr Yan purchased more on the same day through two trustee companies which list Auckland lawyer Jesse Nguy as the sole director and shareholder. TEY Trustee Ltd purchased 16,877 shares, or 12.9 per cent of Mega, and New Vision Trustee acquired 2182 shares, or 1.67 per cent.

In August, TEY Trustee purchased another 5554 shares bringing the company's total shareholding to 17.1 per cent and Mr Yan's stake to 18.8 per cent. Mr Nguy did not return calls.

A spokesman for Internet-Mana yesterday said there was no connection to Mr Yan and it had no concerns the police action would impact on the party.