The cyber locker website MegaUpload was planning to go public with a "multi-billion dollar" IPO when authorities raided their facilities and accused them of a "mega conspiracy" to pirate copyrighted materials, according to a corporate adviser who spoke to a popular tech blog this week.

Torrent Freak, which covers news relating to peer-to-peer media sharing networks, quoted Hong Kong-based corporate adviser Robert Lim in a report Tuesday. He claims to have worked with MegaUpload founder Kim Dotcom and the rest of his management team to prepare the company for a top-to-bottom audit by one of the major accounting firms that helps companies go public.

Lim said they were working on an IPO since the beginning of 2011, but it all abruptly died in January 2012 once the U.S. Department of Justice shut them down. MegaUpload had over 150 million users at the time. Lim added that MegaUpload was also speaking with a number of major investment banks about their IPO, and expected that they could hit or exceed the billion dollar mark.

If that's accurate, MegaUpload could have been one of the largest-ever IPOs for any tech company, but Facebook said in February that it was shooting even higher, aiming to raise $5 billion in an offering that could be valued as much as $75 billion in total. Facebook, however, is exponentially larger than MegaUpload was at its peak -- the social network is expected to reach 1 billion users later this year, whereas MegaUpload said it had about 150 million users. Even though the gulf between the two companies' valuations would have been vast, MegaUpload may yet have achieved the "multi-billion" range, had it been allowed to go public.

"This does not fit with the ‘Mega-Conspiracy’ concept that Megaupload management is accused of, including that they knowingly and secretly conspired to do and hide criminal activities in Megaupload," Lim said to Torrent Freak.

The case against MegaUpload is fraught with potential to set precedent for how user-created websites operate. Two similar companies, FileSonic and FileServe, have already closed their doors after the enforcement action against MegaUpload, and another, HotFile, is currently in court fighting for its life. Search giant Google recently weighed in on that case, saying if the court agrees with the movie industry's allegations of rampant piracy behind-the-scenes at these companies, it would have dire implications for the social Internet.

Most user-created websites, like HotFile and MegaUpload along with big traffic pulls like YouTube and Reddit, deal with an influx of copyrighted materials, so by law they must be responsive to requests from content creators to remove access to these materials. MegaUpload claims they offered their accusers access to a content deletion tool and that many studios used it liberally, but still weren't satisfied.

A judge in the U.S. ruled last week that MegaUpload's user files should be preserved, ordering the DOJ to work with the site's operators to return the materials to customers. The defense is currently preparing its official response to the government's charges, which Dotcom claims will be "entertaining."

Photo: Stuart Monk /, all rights reserved.