HKMEx faces eviction from Cyberport office

Management firm is seeking HK$7m in unpaid rent and other fees from failed exchange, while its founder Barry Cheung sues for defamation

PUBLISHED : Friday, 14 June, 2013, 12:00am
UPDATED : Friday, 14 June, 2013, 4:14am

The collapsed Hong Kong Mercantile Exchange sank deeper into crisis yesterday with the threat of eviction from its premises for failing to pay some HK$7 million in rent.

Hong Kong Cyberport Management sued the cash-strapped HKMEx, founded by former executive councillor Barry Cheung Chun-yuen, for rent, management fees and other charges owed since March.

The management firm said in a High Court writ that it was taking legal action after receiving just over HK$1 million from the HKMEx - in response to its demand last month for over HK$6 million in outstanding rent.

The HKMEx has a lease on 10 units in Cyberport which it used for its offices, according to the court document. The management firm is seeking HK$7 million, including legal costs. It has asked the High Court to give it the power to re-enter the premises.

The lawsuit is the latest development in the HKMEx saga. The HKMEx surrendered its trading licence to the financial watchdog last month amid questions over its financial position. Cheung was forced to step down from all his public posts because he is under police investigation.

The Securities and Futures Commission is also looking into the demise of the exchange, which traded gold and silver contracts, and it has sparked heated debate over the function of Exco.

Four men have faced court, charged with possessing false documents in relation to the HKMEx. Another two people have been arrested but released on police bail.

Meanwhile, Cheung has filed a defamation suit against former executive councillor Allen Lee Peng-fei for making a "factually false" statement that he says harmed his integrity as a public officer. It involved an allegation made by Lee in RTHK's televised programme Legco Review, broadcast on May 23.

Cheung, then the chairman of the Urban Renewal Authority, says Lee's statement implied that he had close ties with property tycoons, which indicated conflicts of interest. Cheung says Lee's remark had, with "false innuendos", raised questions about his integrity and whether he had favoured property developers.

The false allegation "seriously injured" his reputation and he had suffered "considerable distress, anxiety and embarrassment" as a result, Cheung says in the court document. He adds that Lee knew the statement was false and made no attempt to verify its truthfulness.

"The false statement was made by the defendant with an intention to injure the plaintiff's reputation," the document says.

Cheung's lawyers wrote to Lee on June 5 seeking an apology, which Lee has so far failed to give him. He has continued to deny publicly that the statement was false.

Cheung is seeking damages from Lee for libel. He is also applying for an injunction to restrain Lee from making any further, similar statements about him.