Current Convoy chairman Johnny Chen Chi-wang. Photo: SCMP
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https://scmp.com/business/companies/article/2161578/convoy-protagonists-gather-hong-kong-high-court-day-one-hotly Companies
Convoy protagonists gather in Hong Kong High Court for day one of hotly anticipated financial battle royal
Lawyers for two largest shareholders of Hong Kong’s biggest independent financial advisory firm fire their opening salvoes
Kwok Hui-kwan (and his green mask) after attending the High Court hearing on Monday. Photo: SCMP
The first salvoes in a corporate legal battle royal between the two largest shareholders of Hong Kong’s biggest independent financial advisory firm were fired on Monday, as the second largest shareholder in Convoy Global Holdings Kwok Hui-kwan launched his bid to overrule the company chairman’s decision last December to revoke his voting rights.
Kwok and his father, Kwok Ying-shing – the chairman of mainland developer Kaisa Group – both appeared in a packed High Court in Admiralty to attend the first day of what is expected to be a complex but intriguing five-day hearing before Mr Justice Jonathan Harris, dealing with several lawsuits brought by different shareholders of the company, including the one filed by the younger Kwok.
It was the first time he had ever appeared in public, but he still chose to wear a green medical face mask when he left court. Neither he nor his father responded to reporters’ questions as they swiftly exited.
Monday’s hearing listed the various lawsuits filed between December and February by the company’s two largest shareholders: the Tsai family from Taiwan, who own Taiwan's Fubon Financial Holding and have a 29.98 per cent stake in Convoy, and Kwok, who has a 29.91 per cent stake.
Convoy has around 100,000 customers, including the Hong Kong pension scheme, the Mandatory Provident Fund.
Convoy Collateral, the moneylending unit of Convoy Global Holdings, is also currently being investigated by the Independent Commission Against Corruption and the Securities and Futures Commission for corruption and market misconduct, after the two bodies raided its offices in early December.
Four senior Convoy officials were arrested, including former chairman Quincy Wong Lee-man.
The dramatic turn of events prompted a management reshuffle which saw Johnny Chen Chi-wang installed as chairman, and a team backed by the Tsai family.
Former Convoy chairman Quincy Wong Lee-man was one of four senior officials at the company arrested in December under suspicion of corruption and market misconduct. Photo: SCMP
Cho himself has not been seen since November, and earlier this week he was removed as a director after being out of contact for six months.
Convoy’s lawyer Wong Ming-fung claimed on Monday the new management considered Kwok’s accumulation of 29.91 per cent of Convoy involving various transactions during August 2017 matched the selling pattern of sales of stakes by Cho-related parties.
Pedestrians walk past the
Wong said it was due to Kwok’s share-trading connections to Cho that had led chairman Chen to attempt to block Kwok’s shareholding rights the voting rights at a shareholder meeting in December.
The meeting itself was called by Kwok with the intention of removing any directors supported by the Tsai family and replace them with his supporters.
Chen’s action meant Kwok was unable to vote to remove Tsai’s supporters from the board. Kwok filed lawsuits the following month to oppose Chen’s decision.
Charles Sussex, representing Kwok junior, described Chen’s decision to abandon Kwok’s voting right as a “DIY (do-it-yourself) injunction” at Monday’s initial hearing.
Sussex said the chairman should have applied for a court injunction to let a judge decide if Kwok’s shareholder voting rights should be invalidated and not made the decision himself.
A fascinating day two awaits on Tuesday.