Mail.Ru buys rest of Russia's VKontakte, ending shareholder dispute
- 16 September, 2014 22:56
Internet conglomerate Mail.Ru has at last acquired total control of Russian social network VKontakte after a lingering shareholder dispute involving allegations of embezzlement and the involvement of the Russian secret service.
Mail.Ru paid investment group United Capital Partners (UCP) $1.47 billion for the 48 percent of VK.com it didn't yet own, it said Tuesday.
The deal to acquire VK.com from ends all outstanding disputes between UCP, Mail.Ru and VKontakte co-founder Pavel Durov, Mail.Ru said.
UCP had accused Durov, at the time a director of VK.Com and CEO of its Russian operating subsidiary, of using VK's resources to found and develop Telegram, an instant messaging alternative to WhatsApp. UCP sued Durov in April to "protect its economic rights and those of its fellow shareholders following the launch of the Telegram application," it said at the time. According to UCP, Durov also embezzled corporate funds, breached his fiduciary duties to shareholders and diverted corporate opportunities to himself.
Durov had filed a counterclaim disputing the allegations, a Mail.Ru spokeswoman said in an email.
During this legal turmoil, Durov fled Russia because he claimed he was pressured by the Russian secret service, FSB, and Russia's prosecution office to provide information about VK users in Ukraine and Russia. UCP disputed that claim, calling it "pure fantasy" and suggested it was more likely that he was avoiding litigation by leaving the country.
However, all those disputes are now at an end as a result of the acquisition.
With 100 percent control of VK.com, Mail.Ru will now focus on the product and its further development, said Dmitry Grishin, co-founder and CEO of Mail.Ru.
"We respect the successful results driven by VK's team and do not plan any significant changes in the team or the product itself. Moreover, we are ready to give the current team an opportunity to realize their plans and initiatives," he said in a statement.
Mail.Ru will add the social network to its portfolio of Internet communications and entertainment services. The company already owns two other large Russian social networks, and also operates instant messaging service ICQ, an email service and an online games portal, among other services.
Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to firstname.lastname@example.org