A lawsuit filed this week by three former Chinese prisoners has accused Yahoo and two of the companies’ former lawyers of mishandling millions of dollars’ worth of humanitarian aid funds. The lawsuit alleges Yahoo and its lawyers willingly turned a blind eye when fund manager Harry Wu allegedly misused around $13m stored in a trust fund intended to aid Chinese political prisoners. It was claimed Mr Wu, who died last year, misappropriated the funds to pay for real estate, inflated staff salaries and his own legal expenses.

Fund backgrounds

The $17m fund in question was established as part of a 2007 settlement between Yahoo and two other Chinese nationals who were imprisoned for speaking out against the Chinese government online. Yahoo had been sued by the pair, both journalists, after the company granted Chinese officials access to each other their email records. As a result, both journalists received 10-year prison sentences for crimes against the state – one for forwarding an email in which he was ordered not to cover anniversary celebrations for the Tiananmen Square massacre to a foreign journalist, the other for writing pro-democracy articles online.

No comment from Yahoo

‘In standing idly by while it knew the Yahoo Human Rights Trust was being squandered, Yahoo abandoned its responsibilities to trust beneficiaries, who have risked their lives by speaking out for political reform in China,’ claimed Cohen Milstein Sellers & Toll attorney Times Wang, who is representing the plaintiffs. The lawsuit, filed in the US District Court for the District of Columbia on Tuesday, claimed only four per cent of the Yahoo trust has ever been spent on humanitarian assistance for Chinese political prisoners. Yahoo has not yet issued a public comment on the litigation. Sources: The New York Times; Corporate Counsel; Gizmodo