U.S. lawsuit involving RCS & RDS S.A: American digital cable developers defrauded by Hungarian partner, who sold disputable company to DIGI group

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Attorneys from the Stein Mitchell Cipollone Beato & Missner LLP in Washington, D.C., USA, who represent Plaintiffs in a U.S. federal lawsuit that now implicates Romanian cable-operator RCS & RDS, S.A., among others, sent a comment regarding this case to our editorial office.

More precisely, the US attorneys say that American digital cable developers had been defrauded by their business partner, Laszlo Borsy, who sold the company i-TV, where the American entrepreneurs were involved, to DIGI Group, without having the right to do that. The American clients also said that DIGI closed the transaction although it had notice of the Court’s judgment.

The attorneys say that, although their clients’ lawsuit covers a completely different episode, they hope to shine a light on corrupt business practices like the ones that defrauded them out of their money, their business, and their technology.

Plaintiffs’ filing against RCS&RDS SA, DIGI Communications NV, RCS Management SA, DIGI T.S. Kft., and i-TV Zrt. is an effort to vindicate their legal rights while at the same time striking back at the ongoing lack of transparency and corruption in Romanian business. Plaintiffs, who are developers of a cutting-edge digital cable technology, were defrauded by their business partner, Laszlo Borsy. Our clients filed suit in federal district court in Virginia, USA, and obtained a judgment for money damages as well as an order enjoining Borsy from selling or transferring the business and its assets, and a declaration that they own a majority interest in a company that today is called i-TV, a Hungarian cable company that is a part of the DIGI empire.

Borsy flouted the Court’s order, fled the U.S., and sold i-TV to the DIGI empire. DIGI had notice of the Court’s judgment and order from Plaintiffs before closing the deal, but the company ignored them and proceeded with the unlawful transaction.

Last year, Plaintiffs read a report called the “Internet Ownership Project” on eastern European corrupt business practices, which revealed DIGI’s vast and complex ownership network. Then, last month, Plaintiffs learned that DIGI was poised to launch an IPO, leveraging technology and assets that rightfully belong to Plaintiffs.

Plaintiffs’ goals are straightforward. They decided to file the motion to enforce the judgment last week as a renewed effort to vindicate their rights as majority owners of a company, i-TV, that now wrongfully is owned and exploited by DIGI. But Plaintiffs also want to send a message that foreign companies in Eastern Europe cannot simply turn a blind eye to legal obligations in the U.S. They hope to shine a light on corrupt business practices like the ones that defrauded them out of their money, business, and technology,” the representatives of Stein Mitchell Cipollone Beato & Missner LLP told us.

RCS & RDS was being prosecuted, the company representatives announced in the amendment to the stock exchange listing prospectus last week.

The National Anticorruption Directorate (DNA) prosecutors decided last Friday to start the prosecution and to place under judicial control the former Professional Football League (LPF) chief Dumitru Dragomir.

Dragomir is investigated for bribe taking and complicity to money laundering. Other persons are prosecuted in the same file, former RCS-RDS managers. Read more here.

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