Tycoon 'may be behind' breach of ATV share deal
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There was a 'good arguable case' that a mainland tycoon who bought into ATV induced the station's former owner and his brother to breach a deal they had agreed with Taiwanese billionaire Tsai Eng-meng, a High Court judge said yesterday.
Court of First Instance judge Mr Justice Aarif Barma made the finding in a judgment explaining his reasons for continuing an interim injunction imposed in 2010 preventing Payson Cha Mou-sing and his brother Johnson Cha Mou-daid from selling part of their stake in ATV shareholder Pelaka Investments to Wong Ching.
The case rests on a letter of intent from the brothers in 2009, promising that snack-food tycoon Tsai could buy Pelaka if he received permission from the Broadcasting Authority to become ATV's majority shareholder.
The application for an injunction in 2010 came against the backdrop of another case brought by Tsai against the Cha brothers through his company San Want Media Holdings.
In that case, Tsai accused the Cha brothers and other directors of breaching their duty to shareholders in the broadcaster by issuing convertible bonds which could be exchanged for ATV shares at below the minimum price.
Barma wrote in his judgment that he had allowed the injunction to remain in place because there was a 'serious question' surrounding the breach of the letter of intent which should be decided at a trial.
He was also satisfied there was a 'good arguable case' that Wong 'had been guilty of inducing or procuring a breach by the Chas' of their obligations under the letter of intent.
Barma rejected a submission by lawyers for the brothers, who said they had been free to sell the shares to anyone else until Tsai obtained consent from the Broadcasting Authority. Barma said this would render the rights granted to Tsai meaningless.
The judge said the injunction was necessary because damages would not be an adequate remedy for Tsai if he eventually won the case, as there was no ready market for ATV shares and it would be difficult to put a value on its control, which Tsai would have if he bought the company.
But the judge cancelled an injunction banning Wong from completing the purchase of the Pelaka shares since, if he did so, he would face a charge of contempt for breaching the injunction against the Cha brothers.
The years-long battle for control of struggling ATV has seen a series of bitter public arguments and court cases.