On April 28 (US time), Tudou.Com submitted for a second time its listing application to the US Securities and Exchange Commission (SEC). As the revised prospectus shows, the divorce proceeding of Wang Wei, the founder and CEO of Tudou.com, may pos e unexpected obstacles to the long-expected listing scheme, and its expedition for listing is further clouded by the surging number of infringement cases it is swamped with.
In November last year, Tudou.com submitted a prospectus to the SEC before its rival Youku.com. Despite the promising start, Wang Wei was later trapped in a property dispute with his estranged wife, Yang Lei, which caused the listing plan to be set aside. Yang Lei demanded half of the shares owned by Wang Wei (76% of Tudou's shares, the main listing subject of Tudou.com). The court has restrained Wang Wei from transferring 38% of the shares, without identifying a specific deadline for the restraining order. According to China's legal procedure, the maximum preservation time can not exceed two years.
In addition to the property dispute, in the document submitted to SEC, Tudou revealed that in December 2010, Tudou received a joint letter from the 20th Century Fox, Paramount, Warner Bros, Viacom, Universal and other US film production companies, accusing Tudou of infringement. The joint letter may be another key reason for Tudou's deferred listing.
Copyright issues cast a long shadow on video websites. For Internet video carriers, the millions of hits on movies and TV dramas can be easily transformed into a huge sum of capital. To minimize the risks, Tudou and Youku have deleted a large number of unauthorized videos, especially TV dramas produced by the US and UK, as well as the domestic smash hits.
According to the copyright infringement cases disclosed by Tudou.com, by March 31, 2011, 362 infringement cases were filed against Tudou, out of which 318 were settled and another 44 were pending. Tudou lost over half of the lawsuits (160) and was ordered to pay compensations ranging from 3,000 Yuan to 50,000 Yuan.
