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Straits Times
7 days ago
- Business
- Straits Times
Park Hotel Management director breached fiduciary duty by selling assets to himself under value
Sign up now: Get ST's newsletters delivered to your inbox Mr Allen Law, the sole director and shareholder of PHMPL, sold assets to himself at 'gross undervalue' and diverted more than $32 million in cash and receivables for his benefit. SINGAPORE – Allen Law, the scion of Hong Kong-based billionaire Law Kar Po, was found to have breached his fiduciary duties and prejudiced the interests of creditors, while navigating his company Park Hotel Management (PHMPL) through financial challenges resulting from the Covid-19 pandemic. According to a 165-page High Court judgment released on Aug 6, Mr Law, the sole director and shareholder of PHMPL, sold assets to himself at 'gross undervalue' and diverted more than $32 million in cash and receivables for his benefit. 'When (Mr Law's) company was in financial peril, he transferred its viable assets and businesses (effectively) to himself at a gross undervalue and manipulated the books of the company to eliminate receivables owed by him and his entities, leaving the creditors with nothing,' High Court Judge Hri Kumar Nair noted. 'Far from demonstrating selflessness, Mr Law showed contempt for his fiduciary obligations... While PHMPL may have failed because of events beyond his control, his response was entirely regrettable. 'He appropriated PHMPL's assets for himself and manipulated PHMPL's books to hide his subterfuge. His conduct, both in relation to the `restructuring' and his defence of these proceedings, was dishonest and dishonourable. His first and only thought was to benefit himself,' the judge said. Mr Law and three other companies were sued by PHMPL and its liquidators over matters relating to assets sold to entities related to him before the company was placed in liquidation in July 2021 in the wake of the pandemic, which had devastated the hospitality industry globally. The three defendant companies are Park Hotel Group Management (PHG), BVI-incorporated Good Movement Holdings and Singapore Institute of Hospitality (SIOH). PHG and SIOH are owned by Good Movement, which in turn is owned by Mr Law, who is married to Ms Tan Shin Hui, granddaughter of former UOB chairman, the late Mr Wee Cho Yaw. She is the executive director of PHG. PHMPL was also the sole shareholder of hotel management company Park Hotel Management (Maldives), restaurant operator Yan and Park Hotel Affiliates (PHA). Due to plummeting occupancy rates and pandemic-related restrictions, Park Hotel CQ, operator of the former Park Hotel Clarke Quay property in Unity Street; and Grand Park OR, operator of the former Grand Park Orchard hotel, were unable to meet their lease obligations. Despite efforts to negotiate with landlords and seek relief under the Covid-19 (Temporary Measures) Act, PHMPL's financial position became increasingly precarious. A sale of PHMPL's assets was done in March 2021. But the liquidators said that PHMPL did not receive any consideration for the substantial assets it disposed of. This included a sum of $2.7 million for assets sold to PHG under an asset share and transfer agreement (ASTA) in March 2021. The assets included 12 hotel management agreements, licence agreements, business names, and PHMPL trademarks. The shareholdings in Park Hotel Maldives were purchased by PHG and Good Movement for US$40,000 (S$51,490), while the shareholding in Yan was purchased by Good Movement for $ 500,000, and the assets of the Singapore Institute of Hospitality were sold by PHMPL for $ 200,000. 'The effect of the agreements was that PHMPL's assets... were transferred to the defendant companies for a total sum of $ 3.4 million and US$40,000,' according to the judgment. 'But Mr Law... arranged it such that PHMPL did not even receive these sums,' Justice Nair said. Furthermore, the judge found that the market value of these assets amounted to $ 26.4 million and US$2.42 million. 'The transfer of assets and businesses from PHMPL to the defendant companies was only one part of Mr Law's plan. In the period when Park Hotel CQ and Grand Park OR were failing to meet their obligations under their respective leases, Mr Law extracted substantial amounts of cash from all three companies,' according to the ruling. In addition, Mr Law also breached the no-profit rule of the Companies Act when he diverted an opportunity to manage Park Hotel Kyoto to PHG, to the detriment of PHMPL. The second part of the plan, the judge found, 'was to cause PHMPL to declare and backdate substantial dividends in Mr Law's favour and to effect a series of transfers and set-offs in PHMPL's books, most of which were also backdated, to eliminate his and his entities' liabilities to PHMPL.' Mr Law received cash payments from PHMPL and also diverted receivables of $ 22.3 million due from his related companies to PHMPL. These amounts were set off against dividend declarations of $ 22 million and $ 5.9 million, and an accounting entry of $ 6.75 million in his favour. But the judge found that the dividend declarations were invalid as PHMPL was insolvent at the time they were made. As a result, Mr Law must repay $ 10.1 million in cash payments and $ 22.3 million in receivables. 'Given my findings that PHMPL was at the very least financially parlous by 31 December 2020 and Mr Law knew this, the cash payments were not in the interests of PHMPL and amount to breaches of Mr Law's fiduciary duties to PHMPL,' Justice Nair said. A representative from the defendants said: 'This remains a legacy matter arising from the exceptional circumstances of Covid lockdowns in 2020 and their unprecedented impact on the hospitality sector. The judgment is being reviewed and appropriate next steps are being considered.' Allen & Gledhill partners William Ong and Lee Bik Wei are acting for the plaintiffs, while Mr Law and the three defendant companies are represented by TSMP Law's senior counsel Thio Shen Yi.
Business Wire
28-04-2025
- Business
- Business Wire
Plastec Technologies Reports Fiscal 2024 Financial Results
HONG KONG--(BUSINESS WIRE)-- Plastec Technologies, Ltd. (OTCBB: PLTYF) (the 'Company') today reported audited financial results for the fiscal year ended December 31, 2024. Balance Sheet Highlights at December 31, 2024* $5.7 million in cash and cash equivalents, compared to $12.3 million at December 31, 2023, primarily as a result of a special one-time dividend issued in December 2024. $5.6 million in working capital, compared to $11.1 million at December 31, 2023. Book value per share was $0.43, compared to $0.86 at December 31, 2023. * Balance Sheet highlights are amounts are presented in U.S. dollars ($) based on a conversion rate of $1.0: HK$7.8, while financial tables/amounts at the end of this release are in Hong Kong dollars (HK$). Recent Developments On December 20, 2024, the Company distributed a special one-time cash dividend of $0.35 per share to the holders of the Company's ordinary shares as of December 13, 2024 record date, using the Company's available cash and cash equivalents position which at June 30, 2024 was $12.2 million. The Company also announced that it is currently in the process of applying for the liquidation of its BVI-incorporated subsidiaries: 'Viewmount Development Limited,' 'Sun Ngai Spraying and Silk Print Co. Ltd.,' and 'Sun Terrace Industries Ltd.' After the completion of liquidation, there will be no subsidiaries under Plastec Technologies, Ltd. Management Comments Mr. Kin Sun Sze-To, Chairman of the Company, stated, 'Following the disposal of Sun Line Industrial Limited assets announced in November 2024 for HKD4.65 million, we made the strategic decision to further streamline and simplify the group's organizational structure, given the limited operations at the three remaining subsidiaries. The streamlined structure gives us the ability to act quickly on any new opportunities that may arise in the future.' Forward Looking Statements This press release contains 'forward-looking statements.' These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Actual results may differ from expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Words such as 'expect,' 'estimate,' 'project,' 'budget,' 'forecast,' 'anticipate,' 'intend,' 'plan,' 'may,' 'will,' 'could,' 'should,' 'believes,' 'predicts,' 'potential,' 'continue,' and similar expressions are intended to identify such forward-looking statements. PLASTEC TECHNOLOGIES, LTD. CONSOLIDATED BALANCE SHEETS (Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) December 31, December 31, 2023 2024 HK$ HK$ Expand ASSETS Current assets Cash and cash equivalents 96,303 44,171 Deposits, prepayment and other receivables 4,269 - Total current assets 100,572 44,171 Non-current assets Property, plant and equipment, net 7 - Intangible assets 438 - Total non-current assets 445 - Total assets 101,017 44,171 Expand LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Other payables and accruals 1,173 538 Tax payable - Total current liabilities 14,153 538 Total liabilities 14,153 538 Commitments and contingencies - - Shareholders' equity Ordinary shares (U.S.$0.001 par value; 100,000,000 authorized, 12,938,128 and 12,938,128 shares issued and outstanding as of December 31, 2023 and 2024, respectively) 101 101 Additional paid-in capital 26,049 26,049 Accumulated other comprehensive income (30 ) (30 ) Retained earnings 60,744 17,513 Total shareholders' equity 86,864 43,633 Total liabilities and shareholders' equity 101,017 44,171 Expand
