(Reuters) -Struggling music royalty fund Hipgnosis Songs said on Thursday legal proceedings have been served against the company, its founder Merck Mercuriadis and its investment adviser on allegations of “diversion of business opportunity”.
Hipgnosis Music Limited (HML), where Mercuriadis was previously a director and creditor, served proceedings alleging there was “a diversion of business opportunity” from HML to the London-listed fund and Hipgnosis Song Management (HSM), the investment adviser, which was also founded by Mercuriadis.
Mercuriadis, HSM and the London-listed fund deny the claims and intend to defend them, the fund said, adding that it was not insured as to the costs of dealing with this claim.
Reuters could not immediately reach Hipgnosis Music Limited for comment.
Mercuriadis, 60, a music industry veteran, has managed the likes of Elton John, Beyonce, Iron Maiden and Guns N’ Roses.
He founded Hipgnosis Songs in 2017 and floated it on the London stock exchange in a bid to offer investors pure-play songs and music rights.
Hipgnosis Songs owns songs such as “Shape of You” by Ed Sheeran and the rights to catalogues of several artists including Shakira, Neil Young and Red Hot Chili Peppers.
Hipgnosis Music Limited also alleged that Hipgnosis Songs assisted Mercuriadis, who is the CEO of HSM – investment adviser – with the alleged diversion.
HML was incorporated in 2015, with Mercuriadis and Afram Gergeo as directors.
Mercuriadis, as creditor, filed a petition in 2017 to the court to wind up HML, according to regulatory filings.
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Nivedita Bhattacharjee)
