Injunction highlights Tung family finances
The families of former Hong Kong chief executive Tung Chee-hwa and late CLP patriarch Lawrence Kadoorie must be spitting mad with Bank Julius Baer.
It was bad enough when a disaffected former employee of the Swiss private bank posted documents on the internet purporting to give details of their families' private financial transactions.
But by seeking a court injunction against the website on which the information was posted, Julius Baer has made things much, much worse.
In forcing the US host of Wikileaks.org to close the site down on Monday, the bank has only succeeded in igniting a publicity firestorm which has focused intense scrutiny on the documents - duplicated on a series of international mirror sites - when in all probability they would otherwise have continued to moulder away unnoticed in an obscure corner of cyberspace.
As one risk management specialist put it yesterday: 'Julius Baer had a small fire, which it tried to put out with a bucket of petrol.'
Among the documents posted on whistleblower site Wikileaks were more than 170 files purporting to detail millions of US dollars worth of transfers to and from offshore trusts in the name of MrTung's sister Shirley Peng, her husband John Peng Yin Kang, chairman of Taiwanese shipping company Chinese Maritime Transport, and a number of companies connected to family members and their business associates.
Several documents dating from the 1990s mention Mr Tung by name in connection with a Cayman Islands trust administered by Julius Baer and apparently controlling substantial investments in a number of Hong Kong companies and offshore hedge funds.
A smaller number of documents purport to detail information about US$113.75 million from the estate of the late Lord Kadoorie held in a number of bank accounts also administered by Julius Baer.
Other documents refer to alleged money-laundering by unrelated individuals and businesses.
The files were reportedly posted to Wikileaks by Rudolf Elmer, a former senior executive of Julius Baer's Cayman Islands subsidiary.
Sources close to the bank claim that some of the information posted is false, however Julius Baer has previously admitted that a number of documents were stolen from an overseas subsidiary in 2002. A Zurich-based spokesman declined to comment.
The whole affair is deeply embarrassing for the Swiss bank, which prides itself on its professional discretion. The big problem is that its attempt to block public access to the files, like so many previous efforts to censor the internet, has backfired spectacularly.
If Julius Baer had left matters stand, the chances are few people would ever have become aware of the documents' posting on the internet.
But by obtaining an injunction against the host of the US Wikileaks website it has sparked a controversy that will damage its reputation far more than the original theft ever could.
And by inadvertently publicising the posting of the documents, it has ensured that its clients' private financial dealings will be inspected and dissected at length both in cyberspace and by the more traditional media.
The intense embarrassment caused will surely ram home the vulnerability of private financial information in the internet age and send other institutions scrambling to beef up their own information security.
That, however, will be little consolation either to red-faced Julius Baer, or to the families of Mr Tung and Lord Kadoorie, who certainly will not appreciate their names being mentioned alongside alleged money-launderers, and who can look forward to a very public discussion of their private finances over the next few days.