The High Court of Hong Kong has ordered key figures involved in the MANTRA DAO project to disclose financial records in response to allegations of asset misappropriation and unauthorized control.
The decision came in the ongoing legal battle between RioDeFi and MANTRA DAO over who owns the latter entity.
The case, brought forth by RioDeFi Inc. and MANTRA DAO Inc., has garnered significant attention from the crypto industry due to its potential implications for transparency and governance within the blockchain space.
Ownership battle
Among the six defendants are John Patrick Mullin, William Donovan John Corkin, Rodrigo Quan Miranda, and Jayant Ramanad, who claim to be MANTRA DAO’s co-founders.
Meanwhile, the plaintiffs are RioDeFi’s directors and shareholders Ng Kian Ming, James Alan Anderson, and Stéphane Laurent, who claim to be the initial developers and creators of MANTRA DAO.
The plaintiffs assert that the defendants, originally associated with RioDeFi, misappropriated MANTRA DAO’s assets and business, thereby seizing control without proper authorization.
The financial disclosure ordered by the court is expected to reveal critical insights into MANTRA DAO’s financial operations, which have remained largely opaque since January 2021, when the defendants allegedly began withholding financial reports.
The court has instructed that detailed financial spreadsheets and supporting documents be handed over to the plaintiffs’ legal and financial advisors.
Defendants’ claims
Meanwhile, the defendants claim that RioDeFi should not own the project, as MANTRA DAO is a decentralized autonomous organization (DAO). In this case, holders of MANTRA DAO’s governance token OM should be in charge of the decision-making process.
Additionally, the defendants also claim that the governance model described in MANTRA DAO’s white paper formed the basis for the investors’ purchase.
Despite the argumentation by the defendants, David Lok, Judge of the Court of First Instance, decided favorably for the plaintiffs. A part of the decision reads:
“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 emission of tokenized real-world assets, and OM is its governance token. Despite the legal battle, the OM price was only down 0.9% in the past 24 hours.
