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.