Agreement over Hong Kong tycoon Chen Din-hwa’s cash quashed

Billionaire’s daughter found to have failed in duty to mother

PUBLISHED : Tuesday, 29 November, 2016, 9:27pm
UPDATED : Tuesday, 29 November, 2016, 10:58pm

The High Court on Tuesday quashed a HK$9 billion asset distribution agreement that had led to a bitter legal battle between late tycoon Chen Din-hwa’s daughter and his former wife.

Mr Justice Anthony Chan Kin-keung said Vivien Chen Wai-wai, the younger daughter of the Nan Fung Group founder, had failed to discharge her fiduciary duties to her mother Yang Foo-oi.

Chen Din-hwa, dubbed the “King of Cotton Yarn”, died in June 2012 at the age of 89.

Under an arrangement he made in 2004, Vivien and her sister Angela would each receive HK$4.5 billion after his death. But they would each have to transfer HK$1.5 billion to Yang, so each would get HK$3 billion.

Yang and Chen divorced in April 2011. Yang sued Vivien Chen over her share of the cash the tycoon bequeathed. At issue was how much the assets in question were actually worth.

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Initially, the mother agreed to take HK$1.5 billion in cash instead of a one-third entitlement. She later cancelled the agreement on the grounds that Vivien had misinterpreted the arrangements, exerted undue influence or breached her fiduciary duty.

In court, Yang claimed the arrangements meant Vivien should transfer to her a third of the market value of the properties that the daughter received, which the court heard were worth “considerably more than HK$1.5 billion”.

The mother claimed that her daughter had taken “unfair advantage” of her.

But Vivien, who took over control of Nan Fung after her father was diagnosed with Alzheimer’s disease in 2009, said it was her mother’s intention to take the cash.

The judge found that the daughter had contradicted herself in the course of her evidence.

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“I am in no doubt that Vivien is not a candid witness, and she resorted to her long repetitive answers because she was unable to answer the questions,” Chan said. It was clear that Vivien Chen had “deep-seated feelings” against her elder sister Angela, he added.

“Regrettably, it seems to me that Vivien harbours very strong feelings against her sister,” Chan wrote in his judgment. “So much so that she would refuse to return [the assets in question] to her mother just because she believed that Angela would indirectly benefit from it.”

The judge concluded that Vivien Chen had failed in her duty to tell her mother the true value of her entitlement.

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Apart from rescinding the disputed agreement, Chan ordered Vivien to foot her mother’s legal bills. The mother is also entitled to either compensation or an account for profits from the assets in question.

Before his death, Chen was ranked 464th on the Forbes list of world billionaires, and 15th among the 39 billionaires from Hong Kong.

The late tycoon had assets of about HK$50 billion in 2002, which were located in Hong Kong and overseas, Chan wrote in his judgment.