The tech company vows to fight the claims -- that it coerced an investor into selling equity -- "vigorously."
Chinese investor Hanwei Guo has taken legal action against Tencent Music Entertainment co-president Guomin Xie, alleging the executive of coercing him into selling his equity stake in Ocean Music, which eventually became part of TME.
Last week, Guo filed a motion of discovery in U.S. District Court in order to gain information for use in a pending arbitration in China to regain control of assets he believes were stolen "under duress." In China, Guo is suing Tencent Music, Xie and various other parties. In the larger arbitration dispute, Guo wants Xie to return various percentages of his equity stakes of Tencent Music, which is poised to go public on the New York Stock Exchange on Dec. 12.
In the U.S., Guo is seeking information from Deutsche Bank, J.P. Morgan Securities, BofA Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Morgan Stanley.
"We believe a review of the circumstances and facts surrounding this matter clearly show that Mr. Xie, who is now Tencent Music’s Co-President, used unlawful intimidation tactics and threats to defraud a respected, honorable investor," a spokesperson of Guo said. "It is unfortunate that Mr. Xie and other respondents have not righted this wrong prior to Tencent Music’s December 12 initial public offering in the United States, where shareholders and regulators hold companies and their officers to high standards of conduct.”
In a filing with the SEC, Tencent Music responded, "both we and Mr. Xie intend to contest the Claimant's claims vigorously."