A series of transactions related to brokerage firm Pacific Challenge Holdings in February 2000 and January 2001 has plagued Lily Chiang Lai-lei for seven years. The deals first came into the spotlight after Kistefos Investment, a Norwegian shareholder in Pacific Challenge, took legal action against the company and Chiang in Bermuda over a series of transactions that were allegedly detrimental to its interests. Chiang had denied all the allegations. Among the allegations in the March 2001 action were that the sale of Pacific Challenge's core brokerage was undervalued. Kistefos also cited a HK$170 million acquisition - proposed in April 2000 - of internet firm Cents.com, of which Chiang effectively held 60 per cent. Cents.com had a net asset value of only HK$5.9 million and its only asset was a loan to its holding company of HK$7.27 million. Kistefos alleged Cents.com was a means to siphon off the cash pile, leading to a shareholder revolt in which the deal was rejected. Three weeks after the vote, Pacific Challenge launched a new share placement equivalent to almost 20 per cent of its existing share capital, which Kistefos alleged was aimed at diluting its stake in Pacific Challenge. The placement was controversial as Pacific Challenge had HK$277 million in cash while the placement raised only HK$31 million. In addition, one of the investors in the placement was Pau Kwok-ping, an executive director of the Chiangs' family company, Chen Hsong Holdings. This led Securities and Futures Commission (SFC) staff to investigate whether Chiang, Mr Pau and another investor, Anthony Cham Wai-ho, had breached the takeover code by acting in concert without making a general offer to minority shareholders. In August 2002, as part of a general offer, Chiang sold her stocks to Cheong Tin-yau and resigned as chairwoman. Mr Cheong became chairman of the company, which was renamed New Times Group. The legal battle ended quietly in August 2004, when Chiang and Kistefos reached an out-of-court settlement. No details have been announced, but New Times said no money was involved. The case was out of the spotlight until July last year, when the SFC's Takeovers and Mergers Panel announced that an investigation had found 'there was insufficient evidence to conclude' that Chiang, Mr Pau or Mr Cham were acting in concert, as defined in the takeover code at the time of the transactions. Yesterday, it was back in the spotlight after Chiang was charged by the Independent Commission Against Corruption.