Hong Kong High Court Orders Disclosure of Financial Records in MANTRA DAO Case
The High Court of Hong Kong has mandated that key individuals involved in the MANTRA DAO project disclose their financial records in response to allegations regarding asset misappropriation and unauthorized control. This ruling is part of an ongoing legal dispute between RioDeFi and MANTRA DAO concerning the ownership of the latter entity.
The case, initiated by RioDeFi Inc. and MANTRA DAO Inc., has attracted considerable attention within the cryptocurrency industry due to its potential ramifications for transparency and governance in the blockchain sector.
Ownership Dispute
The defendants include six individuals, namely John Patrick Mullin, William Donovan, John Corkin, Rodrigo Quan Miranda, and Jayant Ramanad, who assert that they are co-founders of MANTRA DAO. Conversely, the plaintiffs, consisting of RioDeFi’s directors and shareholders Ng Kian Ming, James Alan Anderson, and Stéphane Laurent, claim to be the original developers and creators of MANTRA DAO.
The plaintiffs allege that the defendants, who were initially affiliated with RioDeFi, misappropriated assets and business operations of MANTRA DAO, thus seizing control without proper authorization. The court’s order for financial disclosure is anticipated to provide essential insights into the financial activities of MANTRA DAO, which have been largely opaque since January 2021, when the defendants allegedly began to withhold financial reports.
The court has directed that detailed financial spreadsheets and relevant documents be submitted to the plaintiffs’ legal and financial advisors.
Defendants’ Arguments
The defendants argue that RioDeFi should not have ownership of the project, contending that MANTRA DAO operates as a decentralized autonomous organization (DAO). They maintain that the holders of MANTRA DAO’s governance token, OM, should be responsible for decision-making processes.
Moreover, the defendants assert that the governance structure outlined in MANTRA DAO’s white paper served as the foundation for investors’ purchases. Despite their arguments, Judge David Lok of the Court of First Instance ruled in favor of the plaintiffs. A portion of the ruling states: “Firstly, no matter what is the substantive entity owning or responsible for the operation of the Project, the 1st to 4th Defendants [John, William, Rodrigo, and Jayant], as the Councillors, should have a duty to keep proper account about the operation of the cryptocurrency trading business under the Project. Even if the Defendants’ case is to be upheld by the court, the Councillors would have a duty to account to the OM Token holders about the funds in the Project.”
MANTRA is a layer-1 blockchain designed for the issuance of tokenized real-world assets, with OM serving as its governance token. Despite the ongoing legal proceedings, the price of OM has only decreased by 0.9% over the past 24 hours.
