HSBC International Trustee hits back at claims of favouritism in Great Eagle Holdings dispute
Lawyer for division of Hong Kong’s largest bank describes family infighting as a ‘sad state of affairs’
Lawyers for a division of Hong Kong’s largest bank hit back on Wednesday at accusations it took sides in a family feud surrounding one of the city’s richest property conglomerates, stressing that the bank’s arm did not favour anyone.
Barrister Paul Girolami QC, for HSBC International Trustee, made his rebuttal a day after lawyers for the widow of late tycoon Lo Ying-shek, a co-founder of Great Eagle Holdings, alleged that the trust favoured one of the sons during family infighting described by the lawyer as a “sad state of affairs”.
The widow, Lo To Lee-kwan, 98, is suing the trust manager for not acceding to her requests to stock up on shares in the family business, as she feared not doing so could lead to it falling into the hands of her third son, Lo Ka-shui. She wants the court to order HSBC International Trustee’s removal as trustee.
But in an opening remark on Wednesday, Girolami said: “We are not in that camp. We are not in anybody’s camp.”
Girolami also painted a picture of how the trust manager was sandwiched between two competing camps, having also to deal with Lo To Lee-kwan, who did not have a full grasp of the situation and was only wishing to discipline her children. It made the trust manager prone to legal challenges, he said, and the trust had been acting cautiously.
The civil suit was filed in 2016 by Lo To Lee-kwan, who co-founded the now publicly listed firm with her late husband in 1963.
She noticed that Lo Ka-shui – who once threatened in 2015 to oust other children from the family business – had been stocking up the company’s shares from the about 27 per cent he already held. She therefore requested the trust manager, which held 33 per cent of shares, to increase its stake. But the trust manager turned a deaf ear, her lawyers said, giving rise to the current legal battle.
On Wednesday, Girolami said it was “a very sad state of affairs to see such deep family disharmony”, which requires Lo To Lee-kwan to soon testify in the full glare of media attention.
He said over the 34 years the trustee had worked with the family, the relationship had been cordial until the end of 2015 and start of 2016 – when the family friction began to flare up.
At first, he said, the trustee was not aware of the feud, but increasing signs – such as Lo and the children beginning to be represented by lawyers – gave its staff clues.
As soon as they knew about the severity of the situation, the barrister said, the trust manager started to deal with it more cautiously and carefully.
But his client faced difficulties, Girolami said, including the parties’ rapid change of lawyers, and the fact that it found the widow’s actions “uncharacteristic” of her.
He said the staff also found that Lo did not seem to understand the implications of the requests she made.
The barrister said they understood the mother was entitled to discipline her children, in this case using the trust.
“But whether the trustee has to comply with instructions, that is a different question,” he said. Still, this had angered and frustrated Lo, the barrister said.
The fourth son, Vincent Lo Hong-sui, perceived to be in Lo Ka-shui’s camp, took to the public gallery to observe the hearing, after his mother was wheeled out of the courtroom.
Outside court, a spokesman for Lo To Lee-kwan said she would not have taken the matter to court had it not been for some of the children wishing to “unsurp the throne”.
The hearing continues on Thursday before Mr Justice Wilson Chan Ka-shun.