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Company promises investors 2x payback if there’s an FCPA investigation

An investment vehicle for a technology acquisition company made a disclosure to its investors Monday: If we’re investigated for bribery, you can redeem shares for 200 percent of what you bought them for. 

Draper Oakwood Technology Acquisition, Inc. (DOTA) filed a PREM14A with the SEC on September 17 for special purpose acquisition vehicles that will merge with other private companies in the luxury goods space, such as Singapore-based online retailer Reebonz.

In the filing, DOTA specifies that two classes of shares have special protections against global bribery or corruption investigations, including the FCPA and UKBA. 

If a bribery or corruption investigation is started by any government or regulatory entity, holders of C and D share classes are eligible for a buy back at 200 percent of the initial purchase price. 

The buy back price will include additional declared but unpaid dividends, proportionally adjusted for any recapitalizations, share combinations, dividends, and splits.

Here’s what DOTA said in the filing:

The holders of the Series C and Series D Preference Shares have the option to demand redemption upon the commencement of an investigation (i) of a corruption or bribery event by any regulatory, governmental body or agency into any entity within the group or the founder; or (ii) into any representation, warranty, covenant, undertaking or other term relating to compliance with the Foreign Corrupt Practices Act of 1977 or the UK Bribery Act given by or in respect of any entity within the group or the founder at a redemption price of 200% of the original issuance price plus all declared but unpaid dividends, proportionally adjusted for any recapitalizations, share combinations, share dividends, share splits.

DOTA was co-founded by venture capitalist and billionaire Tim Draper

View the full Draper Oakwood PREM14A here (pdf).


Harry Cassin is the managing editor of the FCPA Blog.

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