Hong Kong Law Society unable to offer ‘realistic timeline’ for return of clients’ funds following major firm’s closure
- The society says the process will take time, given the sheer volume and disorganised state of the closed firm’s files
- Affected clients, meanwhile, have accused the society of ‘indifference’ to their plight, and renewed calls for government intervention
Hong Kong’s Law Society has insisted that it had to shut down a large law firm and freeze its accounts last month “to protect the public and clients” from impropriety, but it stopped short of saying how much longer those affected would have to wait to be made whole.
The society’s leaders on Tuesday also said the affected clients would have to hire their own lawyers for legal advice, prompting a group of victims to accuse it of “indifference” to their plight, and to reiterate their calls for government intervention and the return of the money they had deposited with the firm.
Law Society vice-president Amirali Nasir conceded in an online press conference on Tuesday that “a realistic timetable” for the funds’ release was unavailable due to the sheer volume of files involved and the fact that the records were disorganised. He added that the release would need to also be verified by the agent the society appointed to take over the firm’s practice, followed by judicial approval.
Up to 10,000 clients affected as Law Society shuts down major conveyancing firm
“We understand the affected former clients are asking if there would be ways to apply for release of funds,” he said. “[But] in particular circumstances, for example in the current case, where dishonesty was involved and the intervened firm’s records are incomplete, the manner of release of client money will need to be subject to authorisation by a court order.”
Last month, the Law Society, which regulates the city’s lawyers and law firms, abruptly closed down Wong, Fung & Co – one of Hong Kong’s largest specialists in conveyancing, or real estate transactions – freezing its accounts after finding out that its staff members had committed serious breaches of fiduciary duty, including siphoning client funds.
Former clients of closed law firm demand speedy return of frozen funds
The society did not disclose the number of clients affected or the amount of money involved, saying only that an investigation was under way. But an insider had earlier told the Post that about 10,000 clients were affected.
A group of victims said in a press conference on Sunday that some HK$100 million (US$12.9 million) belonging to at least 79 families had been frozen. They also demanded official intervention, and clarity on when would they get the money back, with some saying they might not be able to complete their property transactions if they were unable to access the funds.
Nasir on Tuesday said the agent and the assisting law firms had been handling cases “in order of their urgency”, but that the process would take time.
One of the affected victims, who asked to be identified only by her surname, Chan, said the Law Society’s response was disappointing .
“The society is only paying lip service. The most important thing is for us to get back our money. We have receipts and other documents to prove our deposits. It will be very straightforward for the society to find our records and release the money back to us,” she said.
Families with money trapped in law firm’s frozen accounts turn to government for loans
Chan said she had some HK$800,000 (US$103,100) frozen in the law firm’s accounts, adding she had to borrow money from her parents and relatives to complete her property transaction.
The Law Society said it had reported the case to relevant government departments, as well as the Hong Kong Monetary Authority and the Association of Banks, and had appealed for them to consider offering assistance to the affected clients. It also called on the clients to seek independent legal advice for themselves.
The Stamp Office, under the Inland Revenue Department, said in a statement on Tuesday that it might consider waiving part of the penalties levied against taxpayers for failing to pay their stamp duty on time in light of the situation.
