• Mon
  • Jul 14, 2014
  • Updated: 8:41pm
NewsHong Kong
COURTS

Billionaire Nina Wang's will did not give charity a 'free hand', court hears

Billionaire's legacy was a gift but did impose obligations on her foundation, appeal court hears in latest battle over her fortune

PUBLISHED : Wednesday, 26 February, 2014, 4:06am
UPDATED : Wednesday, 26 February, 2014, 4:32am

The Chinachem Charitable Foundation does not claim to have a "free hand" in the use of Nina Wang Kung Yu-sum's HK$83 billion fortune even though it was given as a gift, its lawyer told the Court of Appeal yesterday.

The foundation is challenging a Court of First Instance ruling that it held Wang's billions only as a trustee, charged with carrying out charitable functions according to the terms of Wang's 2002 will.

The hearing is the latest in a series of court battles over the legacy of the colourful Wang, who died in 2007, and husband Teddy Wang Teh-huei. It started with a probate case over Teddy Wang's fortune after he was declared dead in 1999, nine years after he was kidnapped and never seen again. Fung shui master Peter Chan Chun-chuen was jailed last year for using a forged will to try to claim Nina Wang's billions.

Frank Hinks QC, for the foundation, yesterday argued that Wang only intended to guide how the foundation, as a corporate charity, would go about its business, and that she did not impose a trust.

The will made the foundation the sole owner of Chinachem Group, one of the city's largest private developers, and said it should set up a "Chinese Prize" similar to the Nobel Prize. It said a managing organisation should be set up for the foundation, consisting of the UN secretary general, China's premier and Hong Kong's chief executive.

Hinks said the fact the foundation was an absolute beneficiary, rather than a trustee, did not give it a "free hand" to use the funds; a clause in Wang's will imposed an obligation on the foundation which was the "price to be paid for the gift".

The clause stipulates the foundation must provide for Teddy Wang's late parents, his siblings and nieces and nephews, and support Chinachem's 3,000 staff and their children.

Chinachem's operating profit for 2011/12 was about HK$2.48 billion, the court heard, while the foundation spent HK$3.5 million supporting group staff in 2011.

Hinks added that, if the foundation failed to carry out its charitable functions, the secretary for justice could take the matter to court, and the court could remove the foundation's governors. The governors include Nina Wang's siblings - brother Kung Yan-sum, and sisters Molly Gong Chung-sum and Kung Yan-sum.

"The foundation accepts that there is a fiduciary relationship. It owes a duty to Mrs Wang and to the public. It's not part of our case that we have a free hand," Hinks said.

But lawyers for the justice secretary, acting in his capacity as protector of charities, argue that the "mandatory and imperative" language used in the will meant that it was Wang's intention that the foundation act as a trustee.

Simon Taube QC, for the secretary, said the clause on providing for family members and staff came within the discretionary power of a trustee. It was not imposed on the foundation as a beneficiary in return for a gift.

If the appeal court upheld the ruling that the foundation was a trustee, Taube said the next step would be for the secretary to submit an administrative scheme for the court's approval on the allocation of funds for the prize and the provision for the family members and staff.

The hearing continues today.

 

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