Bank of China (Hong Kong) this week filed two lawsuits in Hong Kong's high court in a bid to recover more than US$38.52 million for a loan made by one of its sister banks in 1995.
Bank of China filed a suit against Huaxin (Hong Kong), which served as guarantor on a US$22.5 million loan made to Hunan Xiaoxiang Synthetic Development by Kincheng Banking.
Kincheng Banking was one of nine sister banks merged with the Hong Kong branch of the Bank of China ahead of the listing of BOC Hong Kong (Holdings) last year.
Bank of China filed a second lawsuit against Winscore International, which served as a subordinated lender on the US$22.5 million loan.
As a subordinated lender, the firm is also under obligation to repay the debt.
Hunan Xiaoxiang failed to repay the loan or the interest that accrued on the loan, bringing its liability to the bank to more than US$38.52 million plus HK$38,248 in legal costs as of January 7, according to Bank of China.