Court to hear Lo family’s suit to fire HSBC as trustee of patriarch’s estate
Opposing camps of the billionaire family Lo trade salvos on eve of court proceedings over management of the family’s wealth
The family feud over property giant Great Eagle Holdings intensified on Monday as the youngest son fired back at his brothers ahead of a legal battle with HSBC International Trustee slated to get under way on Tuesday.
Lo Kai-shui, the youngest sibling of one of Hong Kong’s wealthiest real estate clans, reaffirmed his position in support of his mother to remove HSBC as the trust manager of the largest percentage share of the family business.
“She [Lo To Lee-kwan] wants to get it back because she believes that the heritage belongs to her,” he said at a press conference on Monday. “As her children, how can we not support her?”
The court case to be summoned for the first time in High Court on Tuesday was filed by 97-year old Lo, wife of the late Lo Ying-shek, in December 2016. The HSBC trustee is currently holding 42.71 per cent of the issued share capital of the HK$60 billion company.
The business empire co-founded by the couple in 1963 is one of the wealthiest in Hong Kong.
The Lo family assets also include a 65.5 per cent interest in the Champion Real Estate Investment Trust, and a 61.9 per cent interest in Langham Hospitality Investment.
Shares of Great Eagles Holdings fell 2 per cent to HK$38.8 on Monday.
The nine children of the surviving matriarch, comprising six sons and three daughters, have been divided into two opposing groups. Lo Kai-shui along with the eldest and second sons support their mother in dismissing HSBC, while Great Eagle’s chairman Lo Ka-shui is aligned with his fourth and fifth brothers in opposing the move.
When asked what unpleasant experiences made Mrs Lo decide to file the case, Lo Kai-shui said there are “numerous reasons”, but added they are unrelated to business investments.
“Would you give away a lifetime achievement like this to other people?” Lo Kai-shui said. “You will only let a trustee manage the heritage if you trust it. You won’t if you don’t [trust it].”
He added that his mother has no thoughts on reallocating the heritage after the lawsuit.
His public remarks are the latest in the heated battle, after Lo Kai-shui was voted down by the board of directors as executive director of the company in the annual general meeting on May 10.
According to Lo Kai-shui, the split between the two sides began as early as January 2016 when legal letters were exchanged between his mother and his opposing brothers. However, Lo Kai-shui said he was not prepared to publicly release these documents, saying that he had yet to consult with his lawyers on the issue.
Lo Ka-shui, the chairman of the family company, claimed that he was not well informed of the matter in early May and was worried that his mother had been “easily affected” by other people given her advanced age.
The Lo brothers have said that managing the company through a trustee was a joint decision made by their parents. This was made before the third son Lo Ka-shui has taken over the group as chairman when the patriarch, Lo Ying-she passed away in 2006.
The fourth brother Vincent Lo Hong-sui revealed in May that Lo Ka-shui is the biggest beneficiary of the trustee. However, Lo Kai-shui said on Monday that he is the second largest beneficiary in the trust and owns “more or less the same” percentage as the company chairman.
Lo Kai-shui said it is therefore “unnecessary” for him to fight over the family inheritance with his brother, adding that he is motivated to support his mother’s wish to dismiss HSBC.
Barrister Albert Luk Wai-hung expects the case to be a long and complicated battle.
“If both sides are very determined, the court will hear very detailed discussion over the interpretation of terms written in the trustee agreement,” Luk said.