• Thu
  • Dec 18, 2014
  • Updated: 5:25am
NewsHong Kong
BUSINESS

HKMEx founder Barry Cheung sued for HK$40m debt

Founder of the failed HKMEx is in yet another legal wrangle, this time over promise to repay company loans for which he is guarantor

PUBLISHED : Friday, 02 August, 2013, 6:20pm
UPDATED : Saturday, 03 August, 2013, 5:25am
 

Former executive councillor Barry Cheung Chun-yuen sank deeper into trouble yesterday as he was sued for HK$40 million arising from loans his company took out. The lawsuit, mounted by the director of a listed company, is the latest twist to a saga over his failed Hong Kong Mercantile Exchange (HKMEx).

Cheung is being sued as the guarantor of two loans taken out by his wholly owned company, through which he owns 56 per cent stake of the exchange. The lender is Leung Chee-hon, director and shareholder of Hong Kong-listed Sunley Holdings, which deals mainly with construction foundation works.

In a High Court writ, Leung, 68, claims Cheung owes him the money in the capacity of a loan guarantor for New Effort Holdings. Company filings show New Effort is a British Virgin Islands company wholly owned by Cheung and the majority shareholder of HKMEx.

Leung claims Cheung guaranteed to indemnify him for any loss if New Effort defaulted on its loans and interest under four agreements made in January, February and April this year.

Leung's lawyers say in the writ that the legal wrangle will end if Cheung or New Effort repays the outstanding amount within 14 days and another HK$10,545 for Leung's legal costs.

Cheung quit his official posts in May after he came under police investigation over the collapse of HKMEx, which traded gold and silver contracts. Since May, HKMEx has been suspended from trading after it failed to meet Securities and Futures Commission (SFC) financial requirements. Police have arrested seven people, not including Cheung, and four have been charged.

A source close to Cheung quoted him as saying the loan was not related to HKMEx.

The source told the South China Morning Post that New Effort was now restructuring its debts. Cheung believed the debt row would be settled after the restructuring was completed by the end of the month.

Cheung also told the source he was fully aware of his responsibility as a guarantor and would fulfil his duty. He declined to answer the Post's queries.

In a separate financial dispute, Hong Kong Cyberport Management has obtained a High Court order for HKMEx to settle its outstanding rents of some HK$7 million - accumulated since March last year - by Tuesday.

Cyberport had in June sued HKMEx for failing to pay the rent and threatened to evict it from its office. If HKMEx failed to meet the deadline, Cyberport had the right to apply to repossess the premises, a spokesman for Cyberport said yesterday.

In May, HKMEx surrendered its licence to the SFC after it failed to generate sufficient income. A few days later, the watchdog alerted the police to suspected serious financial irregularities at the exchange.

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This article is now closed to comments

daily
Actually, this issue just reminds me why does every other official in HK that does something unethical, they will be responsible enough to resign............all except for Paul Chan..........does he think he's special and can keep his post while everyone else can be held accountable?
Paul Chan has got to be the lowest scum ever to work for the HK Government administration.
rpasea
Barry's smiling face reminds me of a certain fung shui lo who had a major change of luck recently.
johnyuan
Hong Kong has a characteristic culture of see, hear, and talk no wrong. That is, just minding one’s own business. It is equally important that it is mightily important to be so. Deals are shadily legal among each other with I.O.Us and favors which create a cobweb of business existence. I can’t rule out that exceptional profits are to be had and mostly at the expanse of the innocent public.
dynamco
one has to ask which person suggested the appointment of these repeat slime & fiasco jokers to CY Leung's administration. It has to be bad when the hated former Article 23 promoting Security Minister with Adolf Hitler , taxi driver and McDonalds employee slur quotes was driven out of HKG only to return, get voted into Legco & given a seat in Exco alongside Cheung. Who vets the suitability for public office - MO Ron Hu?
CY needs to tell Mo Po to foxtrot over so as to achieve some sort of damage control & show he is mayor of HKG, not a token toothless figurehead.
A suggestion would be to get the Misconduct prosecution of the former CE underway before Zervos departs & likewise against Hooray Henry, now surviving on wife-support; albeit the charge sheet reads the status Kuo, Henry, living in the house, knowingly used an illegally conceived, designed & built premises knowing same to be illegal whilst being a senior Govt minister. If that is not misconduct in public office then what is ? Utter shambles. What would we do without Apple Daily's investigative journalism which has brought all to light? Maybe they are just on the first shelf of the Ministerial skeleton cupboard ? Maybe SCMP should get out there searching land lot ownership in the NT new town area? One presumes CY's unauthorised structures are now resolved, removed & forgotten?
Another Social Critics...
這一回,看簿熙來怎麼巧舌如簧....See his Boss...'CY'...How Close to BoXiLai's Incident...!!!!!!!!!!!!!!!!
Au Man Lun(ExMacau Official)Incident of Corruption....How Close to Cheung C.Y., Chan M.P...!!!!!!
ICAC's & Central China Government should Immediately Step-In.................................................!!!!!!
FULL INVESTIGATION & COMING PROSECUTION....................................................................!!!!!!
Before Hong Kong Reputaton be Ruined...
pjp
Cyberpor did not receive rent for almost 15 months before suing? Wow nice little "arrangement" there!

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