Writ reveals Egana row details
POTENTIAL shareholders in Egana International (Holdings) do not appear to have been told of the imminent deletion of China from a licence agreement with Playboy Enterprises, a writ reveals.
Watch company Egana is at the centre of a row over the company being allowed to list in June 1993 with incomplete paper work.
Director Siegfried Adalbert Unruh, who apparently failed to complete an undertaking, resigned from the company after the listing, when it was found he had a criminal record.
Yesterday, details emerged of a writ of summons in the Supreme Court of Hong Kong between Playboy Enterprises and Egana firm Eco Swiss Haru MFR Corp.
The writ was issued last year after the Playboy licence agreement between the two companies allegedly was terminated.
Playboy alleges in the writ there was distribution of the company's brand-name products in China, a country not covered by the licence.
China was struck off the licence, according to Playboy in the writ, on June 28, 1993, just three days after the company was listed on the Hong Kong stock exchange.
The writ was issued in relation to US$339,285 of total profits in respect of unauthorised sales in China, following June 28, 1993. A date has yet to be set for a hearing of the case, expected to be contested by Egana.
At the time of the listing, no mention was made of the apparent imminent deletion of China from the licence.
Playboy, in the writ of March 4, 1994, alleges Eco Swiss Haru was informed on March 25, 1993, of a 90-day notice being given to delete China from the licence-territory.
Egana issued its listing prospectus on June 8. The issue of new shares took effect on June 25 on the listing of the shares for dealing on the Hong Kong stock exchange.
Peter Lee Ka-yue, director of Egana International, said the firm was unable to comment on any information relating to Playboy regarding apparent disagreements or threatened termination of agreements.
Mr Lee said: 'The position at the time of our listing was that the Egana group's licence agreement with Playboy Enterprise Inc was intact and subsisting.
'At the time of the listing, we considered carefully our relationship with each of our licensors.
'The prospectus accurately reflects the relationship as it then was with each of those licensors.' In the prospectus, regular mention was made of the licence with Playboy. In an appendix, the nature of the agreement with Playboy was in line with those stated in Playboy's writ, with the exception of the details of the deletion of China.
The appendix says there was a 90-day termination period available to Playboy should the licensee fail to meet minimum requirements under the agreement.
'No countries have been deleted to date pursuant to those provisions,' said the prospectus.
Just three days after the trading debut of Egana on the Hong Kong stock exchange, China was deleted under a 90-day deletion expiry, according to the writ from Playboy.
In the writ, Playboy alleges for the licence year from March 1, 1992, to February 28, 1993, the licensee's net sales for China was less than the minimum net sales figure specified in the schedule for China for that licence year.
'By reason of the matters pleaded, the plaintiff had the right to delete China from the territory upon giving 90-days written notice.
'Pursuant to and in accordance with such right, by a letter dated March 25, 1993, sent to the defendant at its principal place of business by facsimile transmission followed by a copy sent by pre-paid certified post, the plaintiff gave to the defendant 90-days written notice to delete China from the licence/territory.
'In the premises, on or about June 28, 1993, China was deleted from the licence or ceased to be a country within the territory covered by the licence.' Egana chairman Hans-Joerg Seeberger set up Egana in 1978 in Hong Kong leading to a small original equipment manufacture operation in 1982.
The prospectus of June 8, 1993 shows the company was offering 240 million ten cent shares at $1 a share with warrants on a one-for-five basis.