Update, 3:10 p.m. PDT: To include new statements from Global Gaming CEO that he was being facetious about the company going out of business. Update, 1:45 p.m. PDT: To include new statements from Global Gaming CEO that company may go out of business.
The Pirate Bay has always attracted a lot of controversy, but now scrutiny and criticism has been directed at the company bidding to take over the famed BitTorrent tracker.
The Stockholm-based company that whipped the media into a frenzy in June by announcing it would acquire The Pirate Bay, is being eyed with suspicion after numerous questions were raised about its ability to complete the transaction. The personal financial dealings of the company's CEO have also caused concern among many of those involved.
Global Gaming Factory X is the Swedish software company that has said since June it plans to acquire The Pirate Bay for $8 million and turn it into a "legitimate site." On Friday, trading in Global Gaming's stock was halted by Aktietorget, a Swedish stock market, while it investigates whether Global Gaming possesses enough money to complete the purchase.
Separately, Swedish newspaper SvD said authorities are investigating possible insider trading involving Global Gaming's stock.
The uncertainty hovering over The Pirate Bay's would-be acquirer appears to make it unlikely that a new version of the site will launch anytime soon.
Pandeya denied that anything will get in the way of The Pirate Bay acquisition.
"It is too late to damage the acquisition," Pandeya wrote in an e-mail. "Aktietorget stock exchange has been in touch with the investment bank that is managing the investors and they have confirmed the $60 million Swedish crowns (which was latest claim of being a hoax). We honored the investors requests that we would not disclose their personal details until after the acquisition, and we will discuss with the investment bank how the information can be revealed."
A couple hours after sending CNET that statement, Pandeya sent another long and rambling e-mail. This time he sounded less sure that the Pirate Bay acquisition would go through and also suggested that claims made by his former CTO Johan Sellstrom, and a manager at one of Sweden's pension funds were part of a conspiracy against him. Some of them (or maybe all, it wasn't clear in his e-mail) he says are part of a plot to make a competing bid to buy The Pirate Bay. He also said that as a result, Global Gaming may go bust. (More on this at the bottom of the story.)
A statement released by Aktietorget regulators said they have spoken with someone claiming to represent the investors, but officials have asked for more proof. Apparently, they are waiting for Pandeya to provide that.
Last month, Rosso, the former president of Grokster hired by Pandeya to secure licensing deals with content owners, pulled out of the operation after only working with Pandeya for three weeks. He said then that he departed because of questions he had about Global Gaming's financing and Pandeya's character.
Since then, Pandeya has claimed to have all the money needed to complete the deal and on Wednesday made news when he revealed details about his plan to turn The Pirate Bay from the world's biggest tracker of unauthorized movie and music files into a legal service.
But Pandeya has always declined to provide the media with important details, such as the name of his backers. He has been just as secretive with business partners, including the managers of Peerialism, the company that was supposed to provide the P2P technology on which a new Pirate Bay would run.
On Thursday, Peerialism CEO Johan Ljungberg told CNET that Pandeya has allegedly refused to share with him the names of the backers, a business plan, or even technical specs. He also said that Pandeya had allegedly not come up with the money to pay Peerialism for work Pandeya contracted the company to do two months ago.
Sellstrom on Friday said he has filed a claim with a Swedish government agency to help him collect nearly $900,000 he says Pandeya owes him. According to several Swedish newspapers, Pandeya was citing Sellstrom, a popular and respected figure from the tech community there, as proof his deal was sound.
Pandeya is also behind in paying his taxes and allegedly owes the government more than $100,000, according to a report in SvD. Rosso has said that Pandeya owes him money as well.
Sellstrom said that it was Ljungberg's comments to CNET about his staff not getting paid and that work has not begun on preparing a new Pirate Bay that has shocked those in Sweden's technology circles.
"What that means is that there isn't a credible alternative to launching the site for a week from now," Sellstrom said. "If they haven't even started building the site, that says something about credibility."
Sellstrom, who was also a board member at Global Gaming, said he quit the company soon after Pandeya announced his plans to buy The Pirate Bay. He said at the time of his departure, he saw nothing to lead him to believe that Pandeya possessed the money to pull off a deal. But the reason for his leaving was that he disagreed on the direction Pandeya wanted to take The Pirate Bay.
Sellstrom said he and Pandeya went to college together and have been involved in running several companies since then. In 2006, one of the companies the two men worked on together was interested in buying a Danish firm, he said, but their company was short of cash. To complete the deal, each board member agreed to pony up $360,000, he said.
According to Sellstrom, Pandeya couldn't come up with his share so he borrowed it from his old college friend. Sellstrom said he loaned the money on the condition that it be paid back in three months. Sellstrom said he hasn't seen a cent since.
Pandeya also allegedly borrowed money from a company that he and Sellstrom owned a stake in. When it came time to dividing up the profits in the company, Sellstrom said it was discovered that Pandeya hadn't repaid the loan to the company.
"The reason why I haven't claimed the money earlier is he has kept telling me he had financial troubles," Sellstrom said. "Then he told me 'I'll pay you next week.' He owns property and he told me 'I sold this property and you're going to get this much next week.' Nothing ever came."
Pirate Bay backups, lots of them
Meanwhile, fans of The Pirate Bay have been moving to create backup versions of the site.
Earlier this week, TorrentFreak, a popular blog that covers file-sharing news, reported that someone had copied the entire Pirate Bay index and made it available for download. According to some reports, the file has been downloaded more than 2,000 times.
"I suppose I want us to have assurances," the person who uploaded the file told TorrentFreak. "If the Pirate Bay deal disappoints us, we can just put it up again."
Some in the film and music industries said Pirate Bay clones have been around for years and said copycats may not be game changers.
"This is not unexpected," said a spokeswoman from the Motion Picture Association of America. "We'll continue to evaluate and take appropriate actions against sites offering unauthorized copies of our member companies' works."
Update on Pandeya's statements
In an e-mail to CNET, Pandeya lashed out at his accusers and claimed that almost everybody that has said he owes them money is part of a conspiracy to defame him and grab The Pirate Bay for themselves.
He suggested that neither he nor Global Gaming owed Sellstrom money and said he will take the company's former board member to court. He also said that his claims against the company could do irreparable harm to the company.
"He is filing for the bankruptcy of GGF, as he claims that GGF owes him millions," Pandeya wrote. "So, GGF is now going to go bust!! But before this will happen, the law enforcement will take a closer look."
Hours after sending this e-mail, however, Pandeya said he was being facetious about Global Gaming going out of business.
It should be noted that there are no reports of any government investigations into anything or anyone beyond Global Gaming. Sellstrom was not available to comment to Pandeya's recent allegations.
As for the tax issue, Pandeya said he's been so busy overseeing the acquisition of the Pirate Bay he simply overlooked the payment.
"I gave instruction for payment but due to matters related to the TPB acquisition it wasn't processed," he said. "So I have to get the late payment out of the system."
One of the new twists in this saga is that Pandeya said someone at Sjatte AP Fonden, one of biggest pension funds in Sweden, told Pirate Bay founder Peter Sunde Kolmisoppi that Pandeya was not to be trusted. Pandeya said he has filed a police complaint against the Sjatte official.
"I am looking forward to the police investigation," Pandeya said.