Russian Pirate Gets London Listing

The Russian Facebook investor that floated one-fifth of its stock on the London exchange Nov. 5 faces claims that its websites rely on pirated content to attract much of their audiences.

Mail.ru, which listed at $27.7 per share, valuing the company at about $5.71 billion, has admitted it faces allegations that have already created legal problems and could generate further lawsuits. Mail.ru is the largest Russian-language e-mail portal.

Mail.ru, a subsidiary of Mail.ru Group, and Vkontakte.ru, which is 25 percent owned by Mail.ru, has been targeted by multiple lawsuits, including one from a division of EMI Music Publishing.

EMI alleges Mail.ru is giving away its copyrighted content without licensing agreements.

“We are currently defending several lawsuits brought against one of our subsidiaries that seek to recover damages allegedly caused by the unauthorised posting of audio and video content on our websites,” Mail.ru admitted in its IPO prospectus.

“Although the damages claimed in the actions against us are not material … publicity resulting from the actions could lead to similar claims by other copyright owners alleging higher damages, and if we were held liable, the risk of similar claims would further increase.”

Mail.ru acknowledged that piracy lawsuits were a risk but said that the same kind of legal challenge was faced by YouTube, Google’s video sharing site, which earlier this year successfully defended itself against a $1 billion infringement lawsuit brought by Viacom.

About half of the demand for Mail.ru, which is now Europe’s largest listed internet business, came from U.S. tech investors.