Yahoo!'s operation of Human Rights Fund questioned
Feb
8
Written by:
08/02/2012 17:49
Administrator of the Fund accused of misappropriating its assets for his personal use
Milberg LLP and human rights activist Morton Sklar have filed a lawsuit demanding that Yahoo! Inc. (“Yahoo!”) provide records regarding its establishment and operation of the Yahoo! Human Rights Fund (the “Fund”) in the Delaware Chancery Court on behalf of a Yahoo! shareholder and Chinese activist.
The Fund was established to settle the claims of Chinese dissidents whose internet user identifications were improperly disclosed by Yahoo! to China’s government.
Jing Zhao, a Chinese activist and Yahoo! shareholder, had filed a complaint demanding the inspection of certain corporate books and records of Yahoo pursuant to Section 220 of the Delaware General Corporation Law. The complaint demands that Yahoo! produce for inspection documents concerning Yahoo!’s potential mismanagement and breaches of fiduciary duties in connection with the Fund.
Yahoo! was sued in 2007 for human rights violations when it disclosed the identities of dissidents in the People’s Republic of China resulting in the arrest and long-term detention of hundreds of Chinese internet users.
As part of the settlement with these Chinese dissidents, Yahoo! agreed to establish the Fund to provide humanitarian and legal support to political dissidents who have been imprisoned for expressing their views online, as well as assistance for their families.
However, statements by Chinese dissidents and other information have uncovered that the individual selected by Yahoo! to administer the Fund misappropriated assets of the Fund for his personal use. As a result, Yahoo!’s and its shareholders’ assets were put at risk and the purpose of the Fund was undermined.
The complaint seeks production of documents that will allow shareholders to take appropriate action in the event the members of Yahoo!’s Board of Directors did not properly discharge their fiduciary duties.
(via BusinessWire)
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