Styland founder ordered to pay firm HK$85m

In a landmark ruling, the High Court yesterday ordered the founder and former chairman of developer Styland and his wife to pay HK$85 million to the company as compensation for the losses incurred because of their misconduct.

The ruling also marks a first for the Securities and Futures Commission in successfully pursuing compensation for a company from its directors for misconduct.

Delivering the judgment, Mr Justice Aarif Barma said he accepted the charges brought by the commission in 2008 and ruled that Kenneth Cheung Chi-shing and Yvonne Yeung Han-yi must compensate the company for their misconduct. Yeung was a former executive director of Styland.

The judge also barred the couple from holding any position as a company director for 12 years - the longest ever such ban in Hong Kong. Under the law, the maximum period for such a ban is 15 years.

The SFC said Cheung and his wife had led Styland, a property and infrastructure investment company, to enter a number of transactions in 1999 and 2000 that were not in the company's interests but benefited the couple.

Barma said he accepted the SFC's charges that significant portions of the transactions had 'found their way into the pockets of Kenneth Cheung and Yvonne Yeung' and that these deals 'constitute misconduct or misfeasance', causing 'unfair prejudice' to Styland's shareholders.