bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Jane Moir

Deal struck with liquidators absolves tycoon of US$1b owed and forgoes legal action against him

Tycoon James Ting has been let off the hook for more than US$1 billion owed to creditors of his flagship Akai Holdings under a deal struck with liquidators of the collapsed company.

Court-appointed liquidator RSM Nelson Wheeler agreed to forgo any claims or legal action against Mr Ting if he withdrew opposition to a sale of Akai's listing shell, which netted just HK$12 million in cash.

Akai entered the history books in 2000 for posting Hong Kong's largest-ever corporate loss of US$1.72 billion. It owed creditors more than  $1 billion when it was ordered to be wound up by the High Court in August that year.

At the time, the Official Receiver's Office voiced concern over alleged asset-stripping and the 'de facto surrender' of the consumer electronics company to another listed entity, Grande Group.

By May 2002, creditors were warned by the liquidators not to expect 'any substantial dividend' after they discovered a company with no business, staff or premises. Deals worth HK$1.8 billion were  described as in urgent need of investigation.

Mr Ting disappeared from view in late 2000, only returning to Hong Kong in May last year.

It has emerged that a deal was struck between Mr Ting and the liquidators that would bar any future claims against  him. The confidential agreement was uncovered in the course of litigation involving Mr Ting and another of his firms, Semi-Tech, in the United States.

The South China Morning Post has obtained a copy of the document. It was drawn up on the eve of a sale of Akai's listing shell to clothing retailer Hang Ten Group in December 2002.

Mr Ting, through two  British Virgin Islands companies, had attempted to block the sale, voting his 109.82 million Akai shares by proxy against the back-door listing proposal.  He agreed to drop his opposition, and in return the liquidators promised not to 'sue or otherwise pursue any claims against Mr Ting ... from any and all past, present and future rights, claims, demands, debts, causes of action and suits at law or in equity of any kind or nature...'

They also agreed to 'immediately cease all further investigations with a view to or in connection with the issuing of legal proceedings, and/or making claims against Mr Ting'.

Creditors of Akai and the liquidators received HK$12 million in cash for the back-door listing and 2.1 billion Hang Ten shares. Akai shareholders were given 300 million shares worth about  $3 million.

Mr Ting was paid US$80,000 in legal costs.

RSM Nelson Wheeler declined to comment yesterday, citing the terms of the confidentiality agreement, where only the parties involved and Akai's committee of inspection could view the details unless a court order was made.

Official Receiver Eamonn O'Connell was unaware of the deal. 'We need to look at this. There are certain checks we have to do,' he said.

Corporate governance activist David Webb said:  'The settlement is being reached for what appears to be a small amount of benefit to shareholders against a huge potential claim against Mr Ting.

'One has to wonder whether the liquidators had a financial interest in the back-door listing proceeding.'

Insolvency practitioners noted that investigations into the affairs of a bankrupt company can be expensive and fruitless, with the sale of the listing sometimes being the only realisable asset.

Off the Hook

1982 - Semi-Tech (Global) is set upo by James Ting, will later be renamed Akai Holdings. At its peak, Akai has a 51 per cent stake in sewing-machine ccompany Singer and owns 46.5 per cent of Sansui Electric in Japan.

1993 - Akai posts net profit of $2.23 billion on turnover of $6.52 billion.

July 2000 - Akai reports US$1.72 billion loss for 1999, the largerst ever in Hong Kong's corporate history.

August 2000 - High Court orders winding up of Akai.

May 2001 - RSM Nelson Wheeler appointed as provisional liquidators to Akai. Creditors claim debts of US$1.109 billion.

May 2002 - Akai shareholders notified of proposed acquisition of listing shell by casual clothers retailer Hang Ten.

November 2002 - James Ting attempts to block sale of listing shell by casting 109.82 million shares against proposed deal by proxy.

December 2002 - Liquidators sign deal with James Ting to get sale of listing shell through, agree to forgo future claims against the former chairman.

Early 2003 - Listing of Akai is flipped to Hang Ten for $12 million in cash and 2.1 billion Hang Ten shares.



Ting cleared of debt to Akai creditors