• Sun
  • Oct 26, 2014
  • Updated: 3:56pm

Wheelock loses legal fight

PUBLISHED : Wednesday, 26 March, 1997, 12:00am
UPDATED : Wednesday, 26 March, 1997, 12:00am
 

A marathon legal battle ended yesterday when Wheelock Marden & Co was ordered to pay 188.9 million Danish kroner (about HK$222.52 million) to a Danish finance firm for failing to provide full information before seeking loans from the company in the 1980s.


The conglomerate will also have to pay costs for the six-month trial that are expected to run into hundreds of millions of dollars.


In an 800-page document delivered yesterday, Mr Justice Barnett found the directors of the former hong, which was taken over by the late Sir Pao Yue-kong's Wharf group in 1985, not guilty of the main charge of defrauding creditors.


Danish Shipping Finance had said the former directors had known that Wheelock Marden's shipping arm Wheelock Maritime would not receive financial support from its parent.


Mr Justice Barnett found Wheelock Marden and former director Robert Brothers guilty of dishonestly withholding cash-flow information and failing to provide a true picture of Wheelock Maritime's financial position.


The findings ended a six-month trial, believed to be the longest running civil case in Hong Kong history.


Danish Shipping had originally been asking for 681 million kroner (about HK$817.2 million).


The case centred on events of 1983 and 1984 when Wheelock Maritime was unable to pay for a number of ships it had ordered from a Danish shipyard.


Danish Shipping, which made loans to Wheelock Maritime, said the directors of Wheelock Marden knew the company was insolvent when it borrowed the money.


In 1979, Wheelock Maritime ordered seven vessels from a shipyard in Denmark. Loans were provided by Danish Shipping.


In 1982, the shipping market collapsed and Wheelock Maritime found its earnings were insufficient to cover its operating costs.


Wheelock yesterday refused to return calls seeking comment. However, the company put out a statement saying the group was considering the judgment with its legal advisers.


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