Embattled tycoon Pan Sutong is being sued by CK Asset Holdings for allegedly breaching an agreement granting Hong Kong’s second-largest developer the right of first refusal on a luxury residential site in Ho Man Tin.
Cheung Kong Property (Business Development), a unit of CK Asset, filed a writ to the High Court on February 19 against Pan and his privately owned Gold Brilliant Investment Limited claiming they had violated the agreement that was signed on September 1, 2020.
The legal dispute came 10 days after property group Great Eagle Holdings announced it had entered into a tentative agreement with Gold Brilliant Investment and Pan under which it would receive the development rights for the plot. Great Eagle claims to have paid a deposit for the parcel of land.
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However, CK Asset, the developer founded by Hong Kong’s second-richest man Li Ka-shing, said in a statement on Monday that “the matter is a misunderstanding” and said it would cease legal action if it could be resolved.
“CK only hopes to remind the other party to abide by the agreement. The incident should be resolved in the next few days,” it said. “Once the matter is resolved, the writ will be withdrawn.”
Pan declined to comment on the issue when contacted by the Post. Great Eagle was unavailable for comment.
In December of 2016, MTR Corp awarded the tender for the residential site in Ho Man Tin to a consortium formed by Pan and Gold Brilliant Investment. At the time, analysts estimated the total development costs for the plot, which could yield a total gross floor area of 69,000 square metres (742,716 square feet), could come to HK$10 billion (US$1.29 billion). The site could yield as many as 1,000 units.
Great Eagle, chaired by Lo Ka-shui, has paid a refundable deposit of HK$1 billion to MTR Corp, according to a filing it made with the Hong Kong stock exchange on February 9. It said the deposit would be held by MTR Corp as money in escrow until February 25.
According to the writ, Cheung Kong Property said it had written letters dated February 10 and 16 to the solicitors of Pan and Gold Brilliant about the issue. It claims not to have received a response.
Pan’s fall from grace has been dramatic. In the space of five years, he has gone from being one of Asia’s richest people to having his company’s flagship skyscraper, the Goldin Financial Global Centre, seized by creditors chasing more than US$1 billion of debt.
The 57-year-old was fourth in the Bloomberg Billionaires Index in 2015 with a net worth of US$27 billion. But after shares of his Goldin Financial Holdings plunged and with most of his properties locked up as collateral for loans, he has tumbled out of the top 500 wealthiest people globally.
Pan’s listed vehicle, Goldin Financial Holdings, had liabilities amounting to less than HK$18 billion as of June 30 last year, according to its annual accounts which were published recently. Its cash reserves, however, stood at HK$23 million, having dropped sharply from HK$2.4 billion as of December 31 the previous year.
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