China Metal Recycling chairman to oppose SFC wind-up order

Jacky Chun's lawyer successfully applies for court to release documents filed by the regulator

PUBLISHED : Saturday, 03 August, 2013, 12:00am
UPDATED : Thursday, 14 June, 2018, 4:49pm

A lawyer representing the founding chairman of China Metal Recycling (CMR) said yesterday his client intended to oppose the winding-up petition filed by the Securities and Futures Commission against the company, now under provisional liquidation.

The Court of First Instance heard yesterday that provisional liquidators on Wednesday had obtained an injunction order freezing almost HK$1.7 billion of assets.

The assets are held by the firm's chairman, Jacky Chun Chi-wai, his wife, Lai Wun-yin, and 10 firms that are either suppliers or customers of China Metal Recycling.

Provisional liquidators Cosimo Borrelli and Jocelyn Chi Lai-man, from forensic accounting firm Borrelli Walsh, on Wednesday filed a writ against the couple and the 10 firms for losses incurred from false information and financial statements provided by Chun and "purported payments for fictitious transactions".

Barrister Laurence Li - who represents Chun, Chun's company Wellrun and CMR executive director Fung Ka-lun - applied to have access to court documents filed by the SFC. Li said his clients intended to oppose the winding-up petition but needed access to the documents before making a decision.

Madam Justice Mimmie Chan Mei-lan granted Chun access to the documents. The judge also extended the appointment of the provisional liquidators until further court orders could be made.

The judge said the case had attracted public interest and involved serious fraud allegations. She said there was "a need for urgent and speedy investigation" into the case.

The SFC said in a statement that its investigation was continuing. The regulator on July 26 sought to wind up the company and alleged that CMR had overstated its business and financial position in its listing prospectus during its initial public offering in 2009 and in its annual report for 2009.

The first hearing on the SFC's petition will be heard on October 16. The court will later determine whether Chun and the two others can join the winding-up petition as parties.

Outside court, Li said he could not say whether Chun was in Hong Kong.

Chun, via Wellrun, owns 53 per cent of CMR. His stake will be reduced to 23 per cent if a deal with China Energy Conservation and Environmental Protection Group is completed.

Chun announced his plan to sell the shares in January. A few days later the company's shares were suspended from trading amid the fraud allegations.