Megaupload co-founder's bail appeal rejected by court

Megaupload founder Kim Dotcom's bail application appeal has been rejected in New Zealand.

The High Court in Auckland said it agreed with an earlier ruling that Mr Dotcom - a German national - might try to flee the country.

The file-sharing site creator is accused of profiting from the copying and distribution of pirated content.

Mr Dotcom's lawyers said that he denied the charge and would fight an extradition application by the US.

Prosecutors had said Mr Dotcom - also known as Kim Schmitz - posed an extreme flight risk, noting that he had passports and bank accounts in three names and a history of fleeing criminal charges. They said measures, such as electronic monitoring, were likely to prove ineffective.

'Go to hell'

Lawyers representing the US authorities also said that a man with a history of making fake travel documents had unsuccessfully asked to visit Mr Dotcom following his arrest.

Mr Dotcom's said he had no intention of running away. He said he wanted to be with his pregnant wife and fight to get his assets unfrozen. He also denied all knowledge of the rejected visitor.

"If people were to approach me and to offer such a service, I would tell them to go to hell," Mr Dotcom said.

He added that he had also been contacted by a man claiming to be a prosecutor, who had said he could organise a favourable bail hearing in return for a payment.

He also complained that he had been sent letters from female prison inmates asking to become his pen pals.

Mr Dotcom's next court appearance is scheduled for 22 February, when his extradition hearing is planned.

Data deletion

Megaupload has been offline since 19 January, when the US government forced its shutdown and executed search warrants on two companies that provided it with file hosting services - Cogent Communications and Carpathia Hosting.

Megaupload lawyer Ira Rothkenthat the hosting firms had agreed to preserve consumers' data until at least mid-February.

The US-based digital rights group Electronic Frontier Foundation has since written a letter hinting it might begin its own legal action if the service providers consequently tried to wipe the data, now that they were no longer being paid by Megaupload to store it.

"Many innocent third parties... used Megaupload for wholly legal purposes and have since lost access to their data," wrote the organisation's legal director, Cindy Cohn.

"Many of these materials are property of the individuals involved, and they are legally entitled not only to access but to preservation and privacy.

"We are hopeful that our client and other third parties can obtain access to their material without resorting to legal action, but if that is not the case, we intend to take the necessary steps to ensure the return of their materials."

Carpathia has already pledged not to wipe the data without warning.