Record industry moves to freeze assets of Kazaa executives

SYDNEY - The record industry's copyright case against the Kazaa Internet pirates today took a new turn when lawyers moved to freeze the assets of Kazaa's top executives.

The Federal Court today heard requests from record industry lawyers to prevent the Kazaa parties from moving or disposing of private assets in the lead-up to the conclusion of a massive copyright imprinting case, which began last November.

Kazaa, the world's most popular Internet file-sharing software, allows users to swap digital music files over the Internet.

There are 100 million users worldwide sharing three billion music files a month.

Lawyers for the record labels -- including EMI, Universal, Sony BMG, Warner and Festival Mushroom -- claim Kazaa is the biggest music piracy system ever seen.

They are suing Sydney-based Sharman Networks, which develops and distributes the software, for copyright infringement.

But the case, presided over by Justice Margaret Stone, today took a new twist when it was revealed that Sharman chief executive officer Nicki Hemming had sold her Castle Cove home to Sharman's accountant John Meyers for $US2.1 million ($NZ2.92 million).

In addition, the court was told that Kevin Bermeister, director of Altnet and joint-venture partners with Sharman, had transferred a portion of the mortgage on his Vaucluse house to his wife in September 2004.

Counsel for the record companies, Tony Bannon, SC, described the transfers as a "remarkable coincidence".

In submissions to the court, lawyers for the record labels said the manoeuvring of Mr Bermeister and Ms Hemming were "strongly suggestive that they are engaged in asset stripping".

Lawyers representing Ms Hemming and Mr Bermeister gave undertakings to the court that the Kazaa parties would not move, dispose of or disperse their private assets.

The undertakings will remain in place until March 22 when Justice Murray Wilcox will hear closing statements to the copyright case.

- AAP