(Lo family estate dispute) Lo Kai-shui likens brother to George SorosBusiness | 13 Jun 2018 7:19 pm
Lo Kai-shui, the youngest son of Lo To Lee-kwan, the matriarch of local property giant Great Eagle Holdings (0041), continued to give evidence at the High Court today in the case filed by the 98 year-old to dismiss HSBC as trustee of the family trust.
The 58-year-old, who was kicked off the company's board last year, reiterated that if the third son Lo Ka-shui, the Great Eagle chairman, and fifth son Lo Ying-sui join hands, they will threaten the trust's position as the biggest shareholder. If the family trust does not exercise voting rights, Lo added, then Lo Ka-shui will be able to influence the board's decisions.
He also emphasized that requests in the letter of wishes signed by Lo To in January 2016 were only mild but HSBC International Trustee proposed to hire lawyers to study the reorganization of the trust's structure, which prompted him to suspect that Lo Ka-shui and others were behind the scenes.
HSBC's lawyer, Eugene Fung Ting-sek, SC, presented a letter signed by Lo Ka-shui and Lo Kai-shui to the Securities and Futures Commission in 2004. It pointed out that after the family trust distributed equity, it lost the absolute control of Great Eagle, and the total stake of all beneficiaries was greater than 30 percent – similar to the trust.
In the letter, Lo Ka-shui said it was hoped that the distribution would enable flexibility in managing company assets and he and his brother requested SFC to authorize the family to handle it flexibly, in order to avoid family members triggering a full acquisition. SFC's response was not revealed in court.
Lo Kai-shui previously explained that his parents' decision to distribute the assets in 2004 was to avoid the requirement that the trust should distribute its income equally to beneficiaries at the end of a 20-year period.
Fung said Lo contradicted himself. Lo stressed that avoiding the requirement was the main reason of distributing equity, but he admitted that he could have used more accurate words during drafting.
Lo Kai-shui also said when the matriarch signed the letter of wishes in 2016, Lo Ka-shui, the oldest son Anthony Lo Hong-sui and Lo Ying-sui harassed her from time to time, saying that she will not have the final say if she signed it.
At the court, the lawyer revealed text messages between the five siblings in Lo To's camp. In a WhatsApp group, Lo Kai-shui said because Lo Ka-shui had threatened that he could sell his shares in Great Eagle to George Soros and let the American billionaire to propose a take over, Lo Kai-shui suggested to increase stake in Great Eagle to regain the trust's control.
But Fung questioned that Lo To signed the letter of wishes in February 2016, requesting to take back all the trust's assets because of an instruction originated from Lo Kai-shui. Lo admitted that he expressed his thoughts to his mother, but she had not realized the seriousness of the situation until mid-February in the same year.
Lo also emphasized that if there was a rival buyer like Soros, that person would be Lo Ka-shui.