Yahoo accused of mismanaging fund

A lawsuit accused Yahoo of breaking a financial promise it made to Chinese dissidents almost a decade ago as penance for helping the Chinese government find and jail other activists.

The complaint, filed Tuesday in a Washington DC federal court by a group of Chinese dissidents, contends that Yahoo mismanaged a $17 million fund set up to provide financial aid to activists.

Yahoo created the human rights fund in 2007, days after US legislators roasted the com- pany for providing authorities with information that led to the imprisonment of two Chinese dissidents, Wang Xiaoning and Shi Tao.

The complaint alleges that Yahoo allowed Harry Wu, a now-deceased dissident from China, to spend about $13 million of the fund enriching himself and pursuing other projects tied to his interests.

Only $700,000 has been doled out to Chinese dissidents who had been imprisoned for expressing their opinions on- line, the reason Yahoo bankrolled the fund, according to the lawsuit. Yahoo declined to comment. The plaintiffs want Yahoo to replenish the fund and to pay unspecified damages. The suit arrives at a delicate time for Yahoo, which is preparing to sell its online operations to Verizon Communications for $4.5 billion.

The unflattering portrait drawn in the lawsuit represents yet another blotch on Yahoo’s record in China. Yahoo’s role in fingering Wang and Shi subjected the Sunnyvale, California, company to withering criticism that culminated in Yahoo co-founder Jerry Yang being grilled during a Congressional hearing.

Wu died last year. /