Global Gaming Factory X, the software maker and Internet cafe operator that allegedly plans to acquire The Pirate Bay, said three weeks ago that it was close to inking a deal with one of the four major record companies. During the past five days, however, numerous music industry insiders have told CNET News that there's no truth to that claim.
At a press conference Thursday in Stockholm, Global Gaming announced that stockholders--which amounted to one plus company CEO Hans Pandeya--met and agreed to go ahead with the acquisition of the BitTorrent search engine. Much has been written about the decision, but a sale of The Pirate Bay is nowhere near to being done.
That's due in part to the ongoing investigation into possibly inaccurate statements made by Stockholm-based Global Gaming and Pandeya. AktieTorget, a Swedish stock market, has halted trading in Global Gaming's shares and officials told CNET that they won't resume until they get the answers they want.
For file-sharing fans who love The Pirate Bay and the entertainment industry, the Sweden deal matters because it might give some indication of what will become of the site. Pandeya said he will start charging users for access to authorized film and music files.
Here's are some of the statements made by Global Gaming that investigators are reviewing:
- In July, Global Gaming issued a press release that the funding to acquire The Pirate Bay was in place. Pandeya says now that a group of 30 investors that were originally part of the plan have backed out because of all the media scrutiny and the alleged smear campaign leveled at him and the company. Still, he hasn't turned over to AktieTorget the names of those alleged former investors.
- Three weeks ago, Global Gaming announced it had received a bid to buy The Pirate Bay once the BitTorrent search engine was acquired, but investigators at the stock exchange where Global Gaming's shares trade said the company has yet to provide proof that it received such a bid. The same situations exists with a US$10 million bid that Global Gaming allegedly received from John Fanning, co-founder of Napster, via former Wayne Rosso the former president of Grokster. Rosso was hired by Global Gaming but left after only three weeks.
- On August 5, Global Gaming said it was close to reaching an agreement that would allow it access to one of the four major record labels, which include Universal Music Group, Sony Music Entertainment, Warner Music Group, and EMI. The sources I spoke with said some of the labels have had "early stage" discussions but not one of the recording companies has moved into what could be described as advanced talks.
"We almost have a contract ready with one of them," Pandeya told The Local, an English language newspaper based in Sweden.
Most of the statements came after Rosso departed, citing concerns over Pandeya's character. So, just as the press began to eye Global Gaming with skepticism, Pandeya suddenly came up with funding, a potential record deal, and potential buyers.
The relevance of the statements is that they might have influenced the market. Sweden's Economic Crimes Bureau has confirmed that it is investigating an unusual and unexplained rise in Global Gaming's stock a week before the company announced it would buy The Pirate Bay.
Where is all this going?
You got me. I have to believe that if this were happening in the United States, some state attorney general would have gone after Pandeya by now. The Swedes seem willing to let this play out in the press. That's fine, everybody seems to be having a good time.
At Thursday press conference to announce Global Gaming had voted to go ahead with the deal, one of the reporters asked Pandeya if the new group of anonymous investors included any real people.
This article was first published as a blog post on ZDNet.
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