Battle for ‘stolen’ Paladin assets heats up after sale announcement
‘My uncle and aunt have stolen this company from my mother,’ Chen Te-ming says on hearing news of the deal with CSI Properties
A bitter family feud for control over Hong Kong-listed Paladin has taken a further twist with a tentative sale of the company’s core asset to CSI Properties.
The HK$1.82 billion conditional offer for a Peak property portfolio including The Oasis, detailed on Thursday night in an exchange filing, now puts the focus on ousted Paladin chief executive Michael Chen Te-kuang and his brother Chen Te-ming to respond.
“My uncle and aunt have stolen this company from my mother … I will be consulting with my lawyers,” Chen Te-ming told the South China Morning Post on hearing news of the sale.
The Chen brothers accuse their uncle Andrew Oung Da-ming, wanted in Taiwan in connection with a bribery probe, and aunt Margaret Uon of abusing a power of attorney document signed by their mother Lilian Oung Hsiao-mei to gain control over key Paladin shares through a complex series of multi-tiered offshore holding companies, kicking Michael Chen out of the company in the process.
A second uncle earlier linked to the family battle, James Oung Da-ming, a former Taiwanese legislator jailed for stock market fraud, died in March, according to his nephews.
The Oung family is descended from Taiwanese businessman Oung Ming-chang, the founder of Hualon Group, once one of Taiwan’s largest conglomerates.
The power of attorney, signed soon after former socialite Lilian Oung was incapacitated by a series of strokes in 2011, gave Uon authority to act for her sister, including control over her business affairs.
“I certainly do not think either we or our clients are engaging in a fraudulent activity,” Stephen Clark, a managing director of Anglo Chinese Corporate Finance and adviser to Andrew Oung, told the Post last year in response to allegations of fraud and abuse of stock exchange rules.
Clark did not reply to emailed questions on Friday.
For the proposed sale to Hong Kong-listed CSI to go ahead, CSI shareholders would need to sign off on the deal, the exchange filing stated. The deal is also conditional upon there being no litigation, including injunctive relief, against the seller or target acquisitions.
CSI did not return phone calls.
Paladin shares rose more than 20 per cent in early trading on Friday on the news before closing down 17.57 per cent at 61 HK cents..
In addition to ongoing court cases in Hong Kong, a pending court action filed by Michael Chen on behalf of his mother in the British Virgin Islands – where several Paladin shareholding companies are registered – is seeking to annul the power of attorney, according to a court filing, on the grounds that it “did not purport to have characteristics of, and was not in the form of, an enduring power of attorney”.
The filing also claims that Lilian Oung was “unable to comprehend what others were saying to her” around the time the document was signed.
Baker & McKenzie lawyer Angela Lee earlier defended her role in drafting the four-paragrpah document, last year telling the Post: “It was very appropriately done. I was satisfied that she was willing to do it before I allowed her to sign.”
If successful, the BVI case could potentially force current Paladin management to unravel last year’s shareholder restructurings, placing the latest sale agreement at risk.