Sharman Network's Hemming To Testify Feb. 3

Legal representatives for 30 Australian and international record companies will get the chance on Feb. 3 to grill Sharman Networks CEO Nikki Hemming on her personal assets, as well as those of the company. Sharman operates the Kazaa peer-to-peer file sharing operation.

Hemming on Thursday (Jan. 5) lost her appeal against testifying in the Australian Federal Court. It is the first time in the 18-month court battle that she will take the stand.

On Jan. 30, Hemming and other Sharman associates will also face a hearing to determine if they are guilty of contempt of court.

Justice Conti yesterday found that record companies were entitled to learn more about Sharman's offshore trust structures.

On Feb. 4, 2005, Hemming sold her house in Sydney for A$2.1 million ($1.49 million) to a Sharman accountant and transferred A$1.1 million ($820,000) to Trustees International Ltd in Vanuatu, a Pacific tax shelter. She and her husband Robert Kilmer-Barber continued to live in the house.

During the ongoing legal battle, the 30 labels successfully sued Sharman for allowing users of its Kazaa file sharing software to infringe their copyright.

The labels claimed the loan arrangement was a sham, and demanded details of the relationship between Sharman and TIL.

Hemming had argued that she and Sharman had disclosed enough about their assets and the company's structure.

Last September, a judge gave Sharman three months to introduce filters to stop copyright infringement. Sharman's response was to stop access to new Australian subscribers and warn existing ones not to violate copyright. The IFPI criticized that move as an attempt to side-step the court orders.