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A former partner of international law firm K&L Gates accused of stealing at least HK$780 million of clients' funds was yesterday declared bankrupt by the High Court.
Mr Justice Aarif Barma of the Court of First Instance allowed the bankruptcy petition against Navin Kumar Aggarwal filed by Macau casino Melco Crown Gaming, to whom Aggarwal owes about HK$4.6 million.
Aggarwal, who faces three counts each of theft and forgery, will next appear in criminal court on August 27. His alleged theft was initially put at HK$16.6 million, but prosecutors revised it to HK$780 million. He is being held at Lai Chi Kok Reception Centre.
Aggarwal, who become a partner of K&L Gates in 2000 and resigned in June last year when his alleged crime came to light, wrote a letter of confession to the firm, saying he stole the money between January and July 2010 for gambling.
Aggarwal has liabilities of about HK$217 million and assets worth HK$45 million, according to a judgment handed down yesterday.
In his written judgment, Barma dismissed K&L Gates' opposition to the bankruptcy petition. This meant that the law firm would not be able to enforce a court order to recover some HK$131 million in debt from Aggarwal but had to share his remaining assets with other creditors, in proportion to the amount of money owed.
The judge accepted that one purpose of Melco's petition was to prevent the law firm from enforcing the court order it obtained against Aggarwal, and he did not see it an abuse of process by Melco, as alleged.
If Gates' opposition were allowed, it would probably give the firm a potentially significant advantage to the exclusion of other creditors, he said.
The judge said an additional criminal bankruptcy order might still be made on Aggarwal if he is convicted of the offences.
William Gates Sr, father of Microsoft chairman Bill Gates, was a founding partner at Preston Gates & Ellis, which merged with another law firm, Kirkpatrick & Lockhart Nicholson Graham, to form K&L Gates in 2007.