Kids social network Habbo (formerly Habbo Hotel) will tonight be labelled as a paedophile haven” by a special report on Channel 4 News tonight.
Kernel reports that the show will highlight the extent of sexually explicit material on the social network”, with one newspaper already preparing national coverage.
It's not the first time the site has been embroiled in grooming controversies but it is most certainly the highest profile investigation yet seen on the subject.
Investors in Habbo owner Sulake are expected to turn cold on the company as a result, with the second largest shareholder Balderton Capital expected to give up its 13 per cent stake and resign from the board.
We were given some information a week ago that profoundly shocked us,” a Balderton spokesperson stated. We had to ask ourselves whether we were comfortable being investors in a business where children were not being adequately protected.
We didn't take this decision lightly, as we have been investors in Sulake for over eight years, but the standards required to run a website that children have access to are very high. We felt the company was not meeting those standards.”
In the company's defence, a former Sulake employee speaking anonymously claimed that responsiveness to reports of inappropriate material on Sulake's websites has been greatly improved” since current chief executive Paul LaFontaine was appointed in September 2011.
The same source adds that the financial position of the company and the extent of the illicit activity on its networks was not properly explained” to the exec prior to his appointment.