Global Gaming Factory X, a Swedish company that operates Internet cafes but became far more noteworthy for attempting to acquire The Pirate Bay last year, is facing possible bankruptcy. In addition, the company is the subject of a police investigation in Sweden.
Two of GGF's creditors claim the company owes them the combined equivalent of $220,000 and want authorities to put the company into bankruptcy, according to reports in numerous Swedish newspapers. A bankruptcy isn't very exciting, but GGF's owner-operator, the mercurial Hans Pandeya, has a long track record of generating controversy--so things may perk up. Here's what I'm talking about.
Last year, GGF and Pandeya wowed tech media and file sharers by claiming he would buy The Pirate Bay, the world's most popular file-sharing tool. Once he hooked an audience, Pandeya pulled them through a series of wild claims, broken promises, and an investigation by Swedish exchange authorities. The acquisition never got done.
First, Pandeya said GGF possessed the $7.8 million it needed to buy The Pirate Bay. Records show, the company was nearly broke. Pandeya said he would turn the site into a legitimate service and issued press releases suggesting he had licensing deals with top music labels and movie studios. The content producers said these phantom deals never existed. Pandeya told the press he had the technology in place to launch the new service. The engineers he hired to do the work said he had yet to pay them some upfront money and the project hadn't started.
In one of the most preposterous episodes, Pandeya said he had enough personal wealth to guarantee the acquisition and then came images of Swedish tax collectors towing away his car and boat. Since then, Pandeya has popped up in headlines for his alleged attempts to acquire other Torrent sites, including Mininova.
But while the media and Pirate Bay fans grew weary of Pandeya's story, it appears Swedish authorities were just getting into it. Last summer, members of the Swedish National Economic Crimes Bureau flew to Norfolk, Va., and at the FBI's offices there interviewed Wayne Rosso, the former president of music-sharing service Grokster and former employee of GGF. Rosso quit GGF after only two weeks and said he departed when he lost confidence that Pandeya's claims about GGF's finances and licensing deals were true.
Soren Lindgren, a supervising investigator for the Economic Crimes Bureau, confirmed for CNET that he did interview Rosso and that there was an ongoing investigation into GGF but declined to say anything more.
In regards to the GGF's creditor claims, Pandeya wrote in an e-mail to CNET "The filing for an amount that is overdue by a few weeks is seemingly to apply pressure on the company...This has no effect on our plans."
As for the police investigation, Pandeya wrote: "The Pirate Bay is a controversial site and the founders have been sentenced to jail. I would imagine that law enforcement is following events related to file-sharing sites and no one is [happier] than I am if people are interviewed to ensure the environment is safe."
It is true that the founders of The Pirate Bay were sentenced to jail in Sweden for copyright violations and the judgment is under appeal. Pandeya's suggestion, however, that Swedish police flew to Norfolk to investigate The Pirate Bay founders isn't accurate, according to Rosso.
He said that while the Swedish police didn't explain exactly what they were after, all the questions asked by Lindgren and a female colleague were about claims made last year by Pandeya regarding GGF's economic well being and licensing agreements.
Almost from the time GGF first announced plans to buy The Pirate Bay, some observers wondered if this wasn't an attempt to boost GGF's stock. While some of Pandeya's public statements appear to have led to spikes in the value of GGF shares, Swedish authorities said it was unclear if anybody profited from the increases.
Meanwhile, Pandeya lives in the Boston area now and he says he's interested in building a digital-media company here in the states. His first move this year was to buy a U.S. company that trades for pennies. At the time of Pandeya's purchase, the business of the company was selling wall calendars.