THE RANDOM Corporate Serial Killer game goes something like this: take a company, and allow the owner to slay it at will. All products and services would be discontinued, operations shut down and brand names shelved forever. The company would cease to exist. What would be lost - and why is it important for this company to survive? The game is played in business schools, for hard-nosed financiers who need to reflect on their company's deeper reason for being. Creditors, lawyers and liquidators involved with Akai Holdings are beginning to think they have found an actual corpse. The one-time electronics mecca and household name - with subsidiaries in Japan, Australia and Europe and turnover of US$1.4 billion in an average good year - has been stripped to a shell. Set up in 1982, Akai - formerly known as Semi-Tech (Global) - became an electronics manufacturer and distributor in North America, Europe and the Far East. At its peak, Akai had a 51 per cent stake in sewing-machine company Singer and owned 46.5 per cent of Sansui Electric of Japan, a specialist in high-fidelity equipment. By 1993 it also had a 72 per cent stake in Pfaff, Europe's largest sewing-machine manufacturer and in 1995 it took up 55 per cent of Akai Electric in Japan, a well-known video and audio product manufacturer. In January 1999 the company had cash of US$262 million and shareholder equity of US$1 billion. Last summer, Akai Holdings entered the history books for posting Hong Kong's largest corporate loss: US$1.72 billion. This summer, it is being billed as one of Hong Kong's largest corporate collapses. The damage has yet to be assessed in detail - liquidators have only just been appointed to pour over the books and divvy up the spoils - but the signs so far are not good. 'By any measure, this is a major corporate collapse, one of the biggest in Hong Kong's history,' said Official Receiver Eammon O'Connell. His office has cited concerns ranging from pilfered assets to the 'de facto surrender' of the company to the Grande Group. It emerged at a recent court hearing that Akai chairman James Ting had handed over the entire business of the company to Grande under a 'management agreement' without informing shareholders or the stock exchange. Liquidators in Australia got a taste of what this meant when they attempted to claw back A$37 million (about HK$151 million) owing to creditors of Akai Proprietary. All the cash had been stripped from the company prior to liquidation. According to the liquidator's lawyer in Hong Kong, Campbell Korff of Clifford Chance, they have been able to get 80 to 90 per cent back by way of injunctions and court orders. They were able to move fast. By way of example, one lawsuit involves A$4 million which was paid from the Australian Akai to Silver Phoenix in Hong Kong, an arm of the Grande Group. According to court documents, a former director of Akai Mike Binney sent an e-mail to Akai stating that Akai Australia should transfer the money to be managed by Silver Phoenix on behalf of Akai. Trade names were also sold to Grande, according to Mr Korff. Akai Electric cancelled all distribution rights, according to RSM Nelson Wheeler liquidator Damien Hodgkinson. By the time Grande supposedly received Akai, most of the staff were gone. 'Grande walked into a company with very few staff. Most were terminated around August 1999,' Mr Hodgkinson said. He has the task of unravelling a 'complex corporate structure' - which involved the 'rampant' use of British Virgin Islands companies (BVIs) - as he liquidates Akai Holdings, the parent company. About 50 such BVIs were used as investment tools, with 'board resolutions to go from one BVI to the another'. Apart from the missing assets, he suspects there are assets which did not even exist in the first place. 'It is smoke and mirrors: assets that are beneficially owned but not legally owned. Why put it into the books if it is beneficially owned?' Unfortunately a delay in the appointment of liquidators meant the company was not being looked at for a year. Mr Hodgkinson would love to speak to Mr Ting. As would Mr Korff and Mr O'Connell. 'We have sent a number of letters both to Mr Ting and his solicitors to come and talk to us about the affairs of Akai,' Mr O'Connell said. 'To date Mr Ting has been unable to do so.' Lawyers seeking to pursue a US$13 million claim on behalf of a company suing Mr Ting and Akai for conspiring to strip the company's assets have 'hit a blank wall'. He has not set foot in Hong Kong to defend the claim. It is not the first time a company has seemed to evaporate under Mr Ting's control. In 1993, as then chief executive of Singer, he raised US$850 million from investors to expand that company into a manufacturing and marketing empire. Six years later, the company filed for Chapter 11 bankruptcy. Mr Ting's Canadian arm of Semi-Tech also filed for Chapter 11 in September 1999 amid debts of US$650 million. This followed the company's suspension by the Toronto Stock Exchange after failing to comply with annual and interim filing obligations. At the time of Singer's demise, Forbes magazine ran a piece on 'The Wrecking of Singer', charting the company's downfall under the helm of Mr Ting. There are similarities with Akai: an abundance of subsidiary entities, from the BVIs to Jordan and Liberia. There was asset-shuffling - to the company's detriment. Mr Ting moreover 'spent cash as if there was no tomorrow', oblivious to the company's decline, particularly during the Asian devaluations of 1997, the article alleged. Auditors Ernst & Young abandoned Mr Ting, citing a 'breakdown of trust'. Subsequent auditors also resigned over Singer's acquisition of Pfaff - said to be the straw that broke the company's back. Pfaff also filed for bankruptcy in 1999. The man who had it all - including a prestigious Shek O home and chauffeur-driven Rolls Royce - appeared to have lost it all. Or did he? Nobody is sure what Mr Ting got - or lost - out of the Akai saga. He did manage to dispose of his personal shareholding in Akai when the going got tough with Singer in the United States. Varying accounts put Mr Ting in either Taiwan or Shanghai, where he was born before emigrating to Hong Kong and then Canada to study engineering. He worked as a janitor to fund his education. Mr Ting's is a rags-to-riches story, peppered with a chance meeting with tycoon Stanley Ho which enabled him to expand the Semi-Tech empire. It is now up to the liquidators and lawyers to pick up the plot. Graphic: anal20gbz