Hong Kong businessman sues Next Digital after HK$500 million magazine deal collapses
In writ filed at High Court, Kenny Wee claimed restitution for breach of contract and unjust enrichment
A businessman who tried to buy Hong Kong’s top news magazine has sued Next Digital, alleging breaches of contract and libel, days after his purchase attempt failed.
In a writ of summons filed at the High Court on Monday against Next Media Magazines Limited, Ideal Vegas Limited and Next Digital Limited, Kenny Wee Ho claimed restitution for breach of contract and unjust enrichment relating to the sale of Next Magazine Advertising Limited and Next Media Publishing Limited.
A second writ, naming Wee as the plaintiff, accused Next Digital, Apple Daily Limited, and Cheung Kim-hung, Next Media’s executive director, of libel over an article published on December 28 last year. For that action, Wee is seeking a retraction, as well as a ban on the press group from publishing similar defamatory content in the future. Monetary damages are also sought, according to the court document.
On Thursday, Next Digital announced that the HK$500 million (US$63 million) sale of its magazine business, which included the flagship Next Magazine, Sudden Weekly, Face, ME! and Next+One, had collapsed because it had not received payment to complete the transaction.
Late last month, Next Digital said it was informed by Wee that due to “certain remittance issues”, the funds could not be sent to the sellers’ designated bank account.
Wee, the former owner of the Hong Kong free newspaper Metro Daily, expressed regret in a statement on Monday over the unilateral termination of the deal by Next Digital.
He said problems had emerged since his first payment in July, and the seller’s law firm had also declined to collect the payments on its client’s behalf.
“The buyer had already paid up to about HK$100 million over the past six months through different ways to the sellers, and these were all documented,” Wee said.
On January 3, Next Digital announced that the Hong Kong-related part of the sale had been completed after the buyer had paid the funds concerned.
Wee said: “But the seller issued an announcement on February 2 unreasonably claiming that the transaction was not yet completed, after the seller changed its management on February 1.”
He said he could seek justice only through legal means.
Next Digital is controlled by business tycoon Jimmy Lai Chee-ying, a prominent supporter of the pro-democracy movement. Lai founded celebrity and political gossip publication Next Magazine in 1990 and tabloid newspaper Apple Daily in 1995.
The group has been losing money in the face of an advertising and sales slump. Next Digital recorded a loss of HK$393 million in the last financial year – nearly HK$70 million more than in the previous year.
Next Digital sold Next Magazine to Wee in the middle of last year.