CHESTERFIELD Limited is set to sue its former directors over a series of controversial deals which the Hong Kong listed firm's new board says were 'prejudicial to shareholders'.
The firm is also engaged in legal action against its major shareholder and plans to sue a company called Good Faith, which allegedly sold Chesterfield near worthless property.
Chesterfield has been forced to write off $157.38 million this year because of property deals carried out by former directors when the company was under the management of MKI Management Services, a subsidiary of MKI Corp, the firm's major shareholder.
An independent board of inquiry into the deals found in April this year that transactions to buy property in China, Malaysia and Macau were 'highly speculative and not properly appraised' and 'carried out with little or no due diligence'.
The board committee said it believed the deals were 'intended to siphon off the company's funds'.
The decision to sue the former directors was revealed by managing director Paul Liu Ngai-wing in the annual report.
In all, 11 directors resigned from Chesterfield in the past financial year and one, Wong Kim-chao, is under a restraining order not to interfere with the running of the company.