Crushing blow for HK01 founder

Online media HK01 founder Yu Pun-hoi has been declared bankrupt by the High Court for failing to repay a debt of more than HK$416 million to an investment bank.

Locally based CCB International Overseas Ltd filed a writ last year requesting the High Court to pronounce a bankruptcy order against Yu, 65, who is also chairman of former listed company Nan Hai Corp, HK01's parent company.

Yu was absent from the hearing.

His lawyer Joshua Chan, applied for the hearing to be adjourned, but his application was rejected by deputy High Court judge Sara Tong See-pui, citing insufficient grounds.

The court heard yesterday that Yu used his 54.6 percent shares in Nan Hai as a guarantee, with the group's audit report claiming that the shares were worth some HK$750 million, which was enough to repay two debts he owed.

Chan said considering Nan Hai's large business scale, Yu should be given more time to answer doubts raised by CCB in the audit.

But Tong slammed Yu's side for its belated submission of the adjournment application and said she considered the request as a last-ditch effort to delay the case.

She also said Yu could have taken any actions after the creditor, CCB, submitted an affidavit and a 33-page audit report in mid-February.

Senior counsel Paul Shieh Wing-tai, representing the creditor, said the audit that Yu submitted claimed Nan Hai recorded HK$895 million in revenue but lacked evidence, and that the calculation methods were inconsistent.

"If the underlying shares of Nan Hai are of any substantial value, there are ample opportunities and time for them to be realized," Shieh said.

He also cited the opinion of the audit firm Deloitte and pointed out that Nan Hai is already insolvent.

Judge Tong declared Yu bankrupt and ordered him to pay punitive legal costs.

CCB sued Pippen Ltd, Yu, and Dadi International in June 2022, saying it bought bonds from Pippen in March 2017, with Dadi and Yu as guarantors.

The deal stated Pippen had to pay HK$384 million to CCB by March 24, 2021. However, it failed to pay the sum and only paid HK$37 million.

CCB filed a writ and requested Pippen, Yu, and Dadi to pay the remaining HK$378 million plus HK$37.7 million in interest, totaling HK$416 million.

In July 2022, Yu was sued by China Merchants Bank for more than HK$400 million in unpaid debt.

The bank lent US$150 million (HK$1.17 billion) to True Vision - a Nan Hai subsidiary - in February 2018, with Yu and Nan Hai as loan guarantors and Orange Sky Golden Harvest Entertainment Co as collateral.

However, True Vision failed to repay the entire loan and the bank requested the remaining HK$419 million and all shares of Orange Sky from Yu and his companies.

eunice.lam@singtaonewscorp.com