Former First Credit boss sues after discount saleTop News | Phoenix Un 25 Jul 2018
Sin Kwok-lam, the former chairman of First Credit, has sued Wang On Group chairman Tang Ching-ho, claiming he crashed the share price of the money-lending company through stock market manipulation in order to appropriate it at a discount price.
Power Securities was also sued for breaching an agreement in disposing of Sin's shares, which were used as a deposit in his investment.
First Credit is one of the 50 companies named in market analyst David Webb's "The Enigma Network: 50 stocks not to own" list.
The plaintiff - Best Year Enterprises, wholly owned by Sin - sued Power Securities, Tang and two other defendants - Volais Ng Kam-lung and Billy Sit Sai-hung.
Best Year is a company incorporated in the British Virgin Islands and owned 16.1 percent of First Credit's shares before September 14, 2017. Sin owned 1.1 percent through another company.
The writ said the plaintiff had a written margin agreement with Power Securities, in which First Credit's shares would serve to secure the margin facilities owed by the plaintiff to Power Securities.
Tang originally told Sin that he would like to become the largest shareholder in First Credit.
But the writ said Tang told Sin on September 9, 2017 that Tang would take actions "to cause the fall of the market price of First Credit in contemplation of a possible mandatory offer."
The plaintiff was aware that "the share price of First Credit had been subject to an unusual decrease."
He accused Tang and his nominees, including Ng, of "creating an environment to lower the purchase offer for the First Credit shares."
Sin agreed to repay three weekly installments of HK$10 million, but prior to the third installment, Power Securities would not be able to enforce the sale of First Credit shares.
Yang Lingbin, an assistant manager at Power Securities, along with the executive director of Power Securities, Kenny Tang Sing-hing, confirmed the repayment agreement, the writ said.
But when Sin paid the first HK$10 million on September 18, 2017, Yang called Sin and said Tang and Sit, another executive director of Power Securities "requested him not to honor the oral agreement and to start disposing of the pledged First Credit shares immediately without making margin calls."
The plaintiff claimed that Power Securities should have recovered the shares it had disposed of, repaid the income and profits from the shares, and applied for an injunction to ban Power Securities from disposing of the income prior to the repayment.
Sin will hold a press conference this afternoon.