Tencent Music Entertainment is facing yet another hurdle as its planned IPO date approaches. Investor Hanwei Guo is suing Guomin Xie, the company’s co-president, claiming that the exec allegedly coerced him into selling his equity stake in Ocean Music, which later became Tencent Music Entertainment. Guo is suing Xie, Tencent, and other parties in China. He filed a motion of discovery in U.S. District Court to gain information for a pending arbitration case, where Guo is seeking the return of percentages of his equity stakes in Tencent Music.
“We believe a review of the circumstances and facts surrounding this matter clearly show that Mr. Xie, who is now Tencent Music’s Co-President, used unlawful intimidation tactics and threats to defraud a respected, honorable investor,” a spokesperson of Guo said. “It is unfortunate that Mr. Xie and other respondents have not righted this wrong prior to Tencent Music’s December 12 initial public offering in the United States, where shareholders and regulators hold companies and their officers to high standards of conduct.”
Tencent responded to the suit in an SEC filing, stating that “both we and Mr. Xie intend to contest the Claimant’s claims vigorously.” Tencent is scheduled to go public on the New York Stock Exchange on December 12, following market-related delays.