Law firm Johnson Stokes & Master has been hit with a HK$107 million lawsuit for negligence by two former clients.
Hong Kong-listed China United Holdings and Large Investments, wholly beneficially owned by the property investor and securities trader, claim the law firm failed to advise them properly on a number of occasions.
In May 1997, a subsidiary of China United agreed to buy a property in North Point for HK$470 million from a joint venture set up by Asia Standard International and Paul Y-ITC Construction Holdings.
Asia Standard and ITC also provided guarantees for a loan taken out by the China United subsidiary, East Champion, with the International Bank of Asia.
East Champion defaulted on the loan, and in December 1998, Asia Standard and ITC paid a total of HK$119 million to settle their liabilities as guarantors, according to a High Court writ.
China United and Large Investments claim a consultant and assistant solicitor failed to give them proper advice over their liability to Asia Standard and ITC.
