HSBC could face a claim in excess of $400 million after a judge found it acted with a 'total lack of morality and legality' in forcing a troubled firm to sell its flagship property and then having the firm liquidated when it questioned the sale.
High Court judge William Waung Sik-ying found the bank had breached its fiduciary duty to Esquire (Electronics) Limited and used economic duress and undue influence to force it to sell Li Fung House to a party related to the bank in 1987.
'It was the devil's work,' Mr Justice Waung said, 'and commands what I can only call awe and horror for the total lack of morality or legality. It was wrongful, inequitable, against the conscience and not bona fide.
'The bank ... by unfair and improper means, coercive and overreaching and deceiving, secured the sale of the property. Misrepresentations were made by the bank. Lies were told by the bank. Threats were uttered by the bank.'
A fourth claim against the bank, of intimidation, was dismissed because the time limit, of six years, had expired.
Esquire's former owners, Sabahagchand Choithramanni Gurdas and Sabahagchand Choithramani Arajan - who have only recently emerged from bankruptcy - were pleased about the judgment. 'They are both very happy,' their spokesman said. It was likely the claim against the bank, including lost revenue and rent, would exceed $400 million, plus costs, he said.
The bank said it was considering an appeal.