Scandal-hit Grande in insolvency

PUBLISHED : Wednesday, 01 June, 2011, 12:00am
UPDATED : Wednesday, 01 June, 2011, 12:00am


Grande Holdings, the Hong Kong-listed electronics company implicated in the spectacular collapse of Akai Holdings in 2000, has fallen into provisional liquidation.

Just before Akai folded, in what remains Hong Kong's biggest insolvency, disgraced founder James Ting controversially transferred his company's valuable electronics brands, including Sansui and Akai, to Grande, court rulings said earlier.

Grande entered insolvency proceedings yesterday and has appointed FTI Consulting as its provisional liquidator, two people with direct knowledge said.

In its current form, Grande owns 40 per cent of Tokyo-listed Sansui Electric, worth 1.09 billion yen (HK$104.9 million), as well as the Akai brand. Grande also owns 51 per cent of Emerson Radio, an American electronics manufacturer listed in New York. A spokersperson for Grande could not be reached.

Grande's insolvency is likely to be related to legal settlement payments the company has been forced to make to creditors of Akai.

Borrelli Walsh, Akai's liquidators, sued Grande and its chairman Christopher Ho Wing-on, a former partner at Ernst & Young, claiming Ho and Ting had conspired to strip Akai's assets. Grande and Ho agreed to settle that case in October 2009.

Grande made a HK$870 million provision for compensating Akai's creditors in its latest annual report. People involved in the case said that cash has been paid.

On May 24, Grande said it had been ordered by California's Superior Court to pay a further HK$370 million to settle a court case, but did not give details of the judgment.

Court papers Borrelli Walsh filed in Hong Kong said Ho and Ting moved Akai's brands to Grande while Akai was insolvent, denying Ting's creditors the proceeds of asset sales.

Ting was tried in Hong Kong for false accounting and imprisoned for one year in 2005. His conviction was overturned because of problems with the prosecution's evidence.

In October 2009, Borrelli Walsh won substantial compensation for Akai's creditors, which people close to the case said was worth US$200 million, from the company's former auditors, Ernst & Young.

The liquidators accused Ernst & Young of doctoring its files relating to its past audits of Akai after its former client collapsed. The big four accountancy firm settled the case without admitting wrongdoing.

During the case brought against Grande and Ho by Akai's liquidators, Ho was scolded by a judge for successively restructuring his personal empire to avoid litigation.

The court placed control of Ho's assets, including Rolls-Royces, Porsches and a luxury flat on the Peak, in the hands of an official receiver following that judgment.

The Grande chairman regained the use of his cars and properties shortly afterwards, when he agreed to settle with Akai's creditors.

It was not disclosed how much Ho paid to settle the case.


The debt, in US dollars, owed by electronics company Akai when it collapsed in 2000