Web search company Google said it may have illegally issued shares with a total value of up to $3.1 billion after its planned IPO and offered to buy them back for a fraction of that amount.
The company said it sold 23.2 million shares to 1,105 current and former employees and consultants and granted an additional 5.6 million stock options to 301 people. The transactions took place between September 2001 and June 2004 and were not registered, as required by law, Google said.
Google said it will pay $25.9 million, including interest, to buy back the shares and options. Some holders of the securities might sue the company rather than accept the buyback, it said.
The offer will expire in September, Google said, without specifying a date. Holders who reject or don't respond to the offer will have their shares automatically registered after the IPO is completed, it said.
The legal wrangle, disclosed in a filing with the US Securities and Exchange Commission, comes ahead of Google's highly anticipated initial public offering (IPO) that could raise as much as $3.3 billion and has been expected as early as next Wednesday.