THE MUSIC music magnate boss of Hipgnosis Songs Management (HSM) is facing allegations that he stole the idea for his company.

A lawsuit was filed against Merck Mercuriadis last year, accusing him of stealing the idea for Hipgnosis from two other music industry tycoons, Aeon Manahan and Afram Gergeo, according to the Sunday Times.

Afram Gergeo was sentenced to nine months of prison in his native Sweden in 2021 for his part in a scam that defrauded a Maltese pension scheme out of nearly €250,000 of savers' money.

Quantuma, the liquidators of the original Hipgnosis Music Limited say Mercuriadis transferred the business into a separate company of his own, losing investors' cash in the process.

The firm is suing Hipgnosis for millions of pounds in compensation in London's High Court. Mercuriadis has denied the claims, vowing to contest them.

Last week Mercuriadis stepped down as boss of HSM amid an increasingly hostile battle with Hipgnosis Songs Fund (HSF), the music royalties fund that acts as an investment adviser.

Mercuriadis will become chairman of the company while chief operating officer Ben Katovsky will become the new chief executive, HSM said on Friday.

HSM, which manages over 150 catalogues with songs by Shakira and Fleetwood Mac, said it has asked the board of HSF to approve the transition of Merck's role.

It comes as shares in London-listed HSF have fallen 22.5 per cent in the past year. Last month, the fund tabled a "special resolution" to investors in a bid to restore shareholder value. The fund will hold an 'extraordinary general meeting' on Wednesday.

(c) 2024 City A.M., source Newspaper