Grand Cayman, Cayman Islands, Feb. 13, 2024 – Technology Investment Consortium, LLC (TIC) wishes to provide an update surrounding its ongoing litigation against subsidiaries of People’s Republic of China-based Genimous Technology Co Ltd (‘Genimous’, symbol 000676.SZ), regarding the Winding Up Petition for the companies’ joint venture, Position Mobile Ltd SEZC (PM).
TIC alleges that winding up PM is proper because, among other infractions, China-based Genimous utilized its US subsidiary Spigot, under its then CEO Pete Wong, to misappropriate the intellectual property of PM and put it into its wholly-owned subsidiary in the Cayman Islands, Eightpoint Technologies. The publicly available judgment from November 1st, 2023 suggests TIC has produced ample evidence to the court of alleged wrongdoing by Genimous and that this dispute is far from over. One such indication is a concession made (albeit for the purposes of the application then before the Court, only) by Genimous that caused the Judge to record in his judgment: “The Respondents accept that the winding up hurdle and the standing hurdle have been satisfied” (para 160 of FSD2022-0079). Furthermore, Genimous acknowledged that all transactions between PM and other Genimous entities, such as Spigot and Eightpoint, since TIC filed the Winding Up Petition on April 5, 2022 are subject to being unwound and declared void after the petition is decided. In the first hearing regarding the appointment of Joint Provisional Liquidators for PM, Genimous’ attorney stated on behalf of the company, “Genimous is clearly aware of the likelihood of any transfer of assets being declared void now that a Petition has been presented.” In the event the Petition is granted, TIC estimates the transfer of assets and transactions subject to being declared void amount to tens of millions of US dollars.
Shortly after TIC produced independent expert reports detailing alleged, widespread intellectual property misappropriation, including evidence that the code of one of Eightpoint’s apps was 99.7% identical to that of one of PM’s apps, Pete Wong left Spigot’s employ. Mr. Wong then joined Yahoo as the company’s General Manager, Asia. Genimous-owned Eightpoint, the recipient of the alleged misappropriated IP, is one of Yahoo’s largest sources of Internet traffic. Yahoo’s prior knowledge of China-based Genimous’ and Eightpoint’s alleged misappropriation of PM’s IP is unknown. Mr. Wong did not respond to a request for comment regarding the alleged IP misappropriation.
Genimous has an estimated 8 billion CNY ($1.1 billion USD) market cap and has established large global partnerships with Yahoo, Microsoft (indirectly through Yahoo), Google & Meta (Genimous’ 2023 Semi-Annual Report). The Chairman of Genimous, Honga Lu, is also the chairman of Guoguang Electric Co Ltd (stock code: 002045) which manufactures smart speakers for the US market, as well as consumer electronics for companies such as Amazon. Genimous and Hongda Lu also have extensive ties to cryptocurrency and the company’s former General Manager was a big investor in Binance. TIC alleges that Hongda Lu, through Genimous, abused the company’s position as a material source of internet traffic to global partners to improperly benefit from the misappropriation of PM’s intellectual property. When asked to provide a statement, Mr. Lu did not respond.
Since filing the Winding Up Petition, Genimous’ largest shareholder, the eponymous Genimous Investment private equity fund, in which Hongda Lu is a material partner, has reduced its shareholding in Genimous Technology by 36% (27.78% in Genimous’ 2022 Q1 report down to 17.69% in Genimous’ 2023 Semi-Annual report). It’s unclear if either Genimous party has properly disclosed the existence of this Winding Up Petition to the Chinese public or the China Securities Regulatory Commission (CSRC), the government body responsible for the oversight and investigation of activities related to securities and futures in China. In 2011, Lu was appointed a member of the Public Offering Review Committee of the CSRC. It’s unclear what formal ties Lu continues to maintain with the securities watchdog of the People’s Republic of China.
On November 1, 2023, the Grand Court of the Cayman Island’s financial services division declared that in lieu of the immediate appointment of joint provisional liquidators to take control of PM, that instead the parties should seek to progress the winding up petition so that all of the evidence, including multiple independent expert reports detailing the extent of Genimous’ alleged IP misappropriation, can be weighed by the Cayman courts. TIC intends to continue to pursue any and all legal remedies to protect PM’s assets from misappropriation by China-owned Genimous, Spigot, and Eightpoint.
About Technology Investment Consortium, LLC
Technology Investment Consortium, LLC is a Cayman Islands based company, specializing in the investment and operation of high-speed ad-tech startups.