14 DAY TRIAL // Yahoo is being sued for failing to properly oversee a $17 million fund it created to help Chinese writers, democracy advocates and human rights lawyers who were being persecuted for standing up against the country's government.
The lawsuit was filed by a local group of political activists who claim senior executives with the company have turned a blind eye as Harry Wu, the fund's manager, illegally spent millions of real estate, hiked staff salaries and created a museum to document the history of Chinese labor camps, the New York Times reports.
Wu, a Chinese dissident who died a year ago, spent less than 4% of the money for the actual purpose, the lawsuit claims.
The activists aren't looking for much, but they demand that Yahoo replenish the trust, which has been depleted for the most part. Yahoo refused to comment on the situation, but that's pretty normal given how most companies refuse to offer comments in regards to ongoing litigations.
This is a rather bad time for Yahoo to be hit with yet another lawsuit, as the final stages of its merger with Verizon Communications have been reached. The deal was supposed to close much earlier, but revelations regarding two massive data breaches that took place several years ago delayed the process and cut off some of the price put on the company.
Dark roots
The roots of this current lawsuit go back a few years to a rather dark moment in Yahoo's history. In 2007, the company acknowledged that it gave the Chinese authorities access to information that helped them identify subscribers in China whose emails had angered the government. Two activists were given decade-long prison sentences.
To settle litigations at the time, the relatives of each of the two dissidents were given millions. Furthermore, Yahoo decided to create this $17 million humanitarian fund to help Chinese activists and their families. It seems now that little was done to this extent as official filings of the foundation indicate only $700,000 were distributed.