Jagex, the publisher behind MMORPG RuneScape, is finding itself embroiled in a controversy over its sale to private equity investor the Carlyle Group.
Last Friday, Jagex and Carlyle announced that the company had been sold. While exact numbers on the deal were not released, it was reportedly more than when Jagex was purchased by MacArthur Fortune Holding, Inc. last May. In a statement to The Telegraph, Jagex said, "We’re delighted to welcome the new board directors to Jagex and proud to have their expertise, counsel, and support on our side as we look forward to a hugely exciting year for Jagex, the RuneScape games, and beyond. We’ll be talking more about the appointments in the days to come."
However, the day before the announcement, a company called Plutos Sama Holdings filed for an injunction against the sale. They contend that they had purchased a 55% stake in Jagex after the company was put up for auction, paying $530 million USD in partnership with MacArthur Fortune Holding's Platinum Fortune. PSH alleges that it later found out the seller, Shanghai Hongtou Network (which had purchased the company in 2016) was involved in a lending scheme using misappropriated funds. For this reason, PSH asserts it sold its interest in Platinum Fortune to MacArthur, which led to the news of MacArthur acquiring Jagex in May 2020.
Complicating the matter further, a UK court issued a stop order preventing the transfer of Jagex shares by Platinum Fortune (and by extension MacArthur) due to an earlier suit filed by China Minsheng Trust Company, Ltd., alleging they had a stake in Shanghai Hongtou parent Shanghai Fukong in 2017 due to an unpaid loan. Jagex's sale to MacArthur should have been prevented at that time, according to PSH's suit.
PSH has accused Shanghai Hongtou violating the RICO Act, interfering with a contract, and interfering with prospective economic advantage. It has asked courts in both California (where PSH is headquartered) and Cambridge to prohibit further transfer of Jagex shares. It is also seeking a declaration of its ownership interesting Shanghai Hongtou and Jagex, along with monetary damages. In a brief statement to Gamesindustry.biz, Jagex said, "The allegations are meritless in all respects, and we will deal with the situation accordingly."