Top executive withheld HK$30m, Li firm says
A Shenzhen hi-tech firm backed by Li Ka-shing, Asia's richest man, has fired a top executive and is threatening legal action against him for allegedly withholding payments to the firm and launching competing businesses on the mainland.
Thunder Sky Battery has fired Winston Chung Hing-ka as chief technical officer, removed him as deputy chairman and demoted him to non-executive director status.
The moves came after the company said it discovered Chung allegedly lied about selling down his stake in the firm last month, launched competing businesses in breach of his fiduciary duties and withheld HK$30.5 million in payments due to the listed firm.
Li, the chairman of Hutchison Whampoa and Cheung Kong (Holdings), agreed in January of last year to acquire 400 million shares in Thunder Sky for 73 HK cents apiece.
It was a HK$292 million transaction for what was then an 11.8 per cent stake in the company, which was known at the time as Jia Sheng Holdings.
Li's investment was part of a HK$2.75 billion deal completed in May of last year that saw Thunder Sky acquire a start-up Shenzhen maker of lithium-ion batteries for electric vehicles from a group of investors led by Chung.
Thunder Sky today has a market value of HK$7.8 billion, and its shares have been suspended from trading since February 21 pending an announcement of 'price sensitive' information.
That same day, Thunder Sky contacted Chung in an attempt to confirm unspecified reports he was engaged in conflicting businesses and was selling down his stake in the company. Chung 'verbally denied each of the allegations', Thunder Sky said yesterday in a stock exchange announcement.
But the company said it later discovered Chung had sold 31 million Thunder Sky shares between February 16 and 18 - at an average price of 86 HK cents per share, according to stock exchange filings.
Thunder Sky said it set up a committee to investigate Chung's conduct and discovered that mainland firms lead by Chung owed it HK$30.5 million in proceeds from sales of battery-related products made through September of last year.
Those mainland companies 'failed and/or refused, despite repeated requests and demands, to allow the company's auditors to inspect the sales records ... or to remit the proceeds of such sales to the group,' Thunder Sky said yesterday.
Moreover, Thunder Sky alleges two companies controlled by Chung - Winston Battery and Seven One - have 'competed with the business of the group or diverted business from the group'.
As of last night, the content of the website thunder-sky.com consisted mainly of information about Winston Battery, and featured a large photo of Chung dressed in a blue-grey Mao suit against a backdrop of the PRC flag.
Thunder Sky's registered corporate website, thunder-sky.com.hk, appeared unaffected.
Thunder Sky said its investigation committee would 'consider all the options to protect the rights of the company including the issue of legal proceedings against Mr Chung'.
The firm also said it plans to change its name to Sinopoly Battery Limited.