Deutsche Bank

HK developer issues writ for US$560m

PUBLISHED : Thursday, 07 July, 2011, 12:00am
UPDATED : Thursday, 07 July, 2011, 12:00am


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A businessman is claiming more than HK$560 million in a lawsuit against Deutsche Bank and others over a deal involving a premium office building in Beijing.

Tin Lik, a Hong Kong businessman involved in property and hotel development in the mainland, filed a writ in the High Court earlier this week against Deutsche Bank and RREEF China Reit Management. HSBC Institutional Trust Services (Asia) was also named as a respondent in its capacity as trustee for the RREEF China Commercial Trust.

In 2006, Tin bought the Beijing Gateway Plaza, comprising two 25-storey buildings, in a business district known as the Lufthansa area.

Tin said in the writ that Deutsche Bank approached him with a proposal relating to the company holding the property in 2006.

They eventually made an agreement under which Tin would sell his 100 per cent stake in the company and units in the trust would be listed in an initial public offering.

In 2007, the listing of RREEF China Commercial Trust went ahead. RREEF China Reit Management was manager of the trust, controlled by the Deutsche Bank.

Tin said that under the agreement, he was to receive HK$3.89 billion. As part of the deal, the trustee could withhold US$20 million as security against any breaches by Tin. He said he received the HK$3.89 billion minus the security.

The amount Tin is seeking in the writ includes the balance due from the sale of his shareholding, sums retained by the trustee and an amount that he says he paid under threat.

'To date, each of Deutsche Management and the trustee has wrongfully and unlawfully failed or refused to return the balance of the sums due to the plaintiff after setting off or purportedly setting off the alleged losses of [the trust] and/or Deutsche Management against the retained sums held by the trustee to the credit of the plaintiff,' according to the filing. Deutsche Management refers to the manager of the trust.

Tin said he found discrepancies on the rents for plaza tenants in the lead-up to the IPO, with two sets of leases: one for a larger amount and one for the real amount. The previous owner of the property had been paying the difference monthly.

Tin claimed Deutsche Bank representatives told him the previous owner's payments were causing problems and coerced him to pay a lump sum representing the difference for the duration of existing lease contracts. Under their threats, Tin said he paid HK$279 million.

Tin said that in June 2008, the trustee retained sums beyond the retention sum as additional security.

Earlier this year, the trustee received a court direction that it could proceed to distribute the net assets of the trust without having to retain anything for possible claims that Tin might bring.