Court declares late tycoon was bankrupt

Late shipping tycoon Frank Chao Sze-bang was yesterday found to have been bankrupt over a US$6 million (HK$46.8 million) debt he owed in relation to the sale of an oil tanker.

Madam Justice Susan Kwan Shuk-hing of the Court of First Instance granted the bankruptcy order against the tycoon, who died aged 66 on February 17 last year.

The petition was filed by broker Bright Islands Corporation, which claimed Chao - brother of socialite and businessman Cecil Chao Sze-tsung - was liable for a shortfall on the sale of the tanker. Frank Chao was a guarantor for one of his companies, Finex Shipping Ltd, when it was contracted to buy the tanker for US$29.7 million in October 1997.

But Finex paid only one instalment. The shipyard sold the vessel for US$21.25 million to another buyer in November 1999. Bright Islands is seeking US$6 million of the shortfall, plus costs.

Chao's son, Joachim Chao, the appointed representative of his father's estate, previously had the petition struck out in the Court of First Instance.

But the Court of Appeal set aside the order last month and ruled the Court of First Instance had the jurisdiction to deal with the claim.