Henderson Land

Princeling loses appeal over HK$43m 'payment' from Henderson

Tian Jiyun's son sought sum from Henderson as 'consultation' payment

PUBLISHED : Thursday, 12 March, 2015, 10:15pm
UPDATED : Friday, 13 March, 2015, 10:57am

A princeling's company has failed in its appeal to obtain a HK$43 million "consultation fee" from Henderson Land Development for services related to a central government investigation of the Hong Kong-listed firm for violating Beijing's foreign-exchange regulations.

Shenzhen Zhaotian Investments, headed by Tian Chenggang, lost its appeal against an earlier Hong Kong judgment on March 15, 2012, which dismissed its lawsuit seeking HK$43 million from Henderson, Madam Justice Maria Yuen Ka-ning wrote in a judgment in the Hong Kong Court of Appeal on Wednesday.

Tian Chenggang is a son of former vice-premier Tian Jiyun.

The consultancy fee sought by Zhaotian was related to Tian Chenggang's services over an investigation by the State Administration of Foreign Exchange (SAFE) against Henderson, according to the judgment.

In 2006, the watchdog found that the developer had breached the mainland's foreign-exchange regulations involving HK$565 million.

"At Tian junior's suggestion, Lee Shau-kee, writing as chairman of Henderson, sent a letter dated October 5, 2006, to Tian senior stating Lee's belief that [Henderson's] problem would be speedily and reasonably resolved, given Tian senior's concern and the importance he attached to the matter," said the judgment.

A letter to Lee dated October 12, 2006, and signed by Tian Chenggang said his father had "sent written instructions to SAFE in connection with the investigation".

At that time, SAFE was considering whether to slap Henderson with a fine of HK$170 million or treat the developer leniently, said the letter.

On December 4, 2006, the regulator imposed on Henderson a much lower fine of 2.33 million yuan (HK$2.9 million), which the company paid on December 15 that year.

Zhaotian's pleaded case was that Henderson agreed to pay the company HK$43 million for its effort to "lobby and persuade the relevant Chinese authorities to reduce the fine", noted the judgment.

At a lunch meeting in a private room at a hotel restaurant in Hong Kong on November 1, 2006, Tian Chenggang met Alexander Au Siu-kee, who was then the chief financial officer of Henderson and now the company's independent non-executive director, it said.

Zhaotian claimed an oral agreement was reached between Tian Chenggang and Au that Henderson would pay the firm HK$43 million as a consultation fee. Henderson denied such an agreement had ever occurred.

There were no documentary records that such an agreement was made, wrote Yuen. "It must follow that Zhaotian has failed to prove its case," she added.