The former CEO of Ying Li International Real Estate has filed a lawsuit against China Everbright Ltd in a Chinese court over money he says he’s owed by the mainland financial conglomerate from its purchase of his controlling stake in the Singapore-listed developer.
Fang Ming, also a former controlling shareholder of Ying Li, is claiming an amount of up to RMB 1.172 billion ($180 million) from China Everbright in connection with the sale of his 36 percent stake in Ying Li, according to a Wednesday filing with the Singapore Exchange.
The transaction took place in phases during 2018 and 2019, with all asset delivery procedures completed in April 2019. Fang argues that the consideration for the stake sale was RMB 2 billion and that China Everbright paid only RMB 828 million. He is seeking payment of the RMB 1.172 billion and holding China Everbright, Ying Li and Ying Li subsidiaries jointly liable for the sum.
The controversy comes just two months after Fang Ming’s replacement as Ying Li’s CEO, China Everbright executive Hu Bing was detained in connection with bribery, according to an earlier announcement.
Huddling With Legal Team
In the filing, Ying Li’s board said it was seeking advice from its Chinese legal counsel “with a view to proceeding on a course of action that is in the best interests of the company”.
Based on the information available and preliminary legal advice, the board’s view is that Ying Li and its subsidiaries are not parties to the sale and that the legal proceedings will have no material impact on the financial position of the company.
The board promised further announcements on any material developments in relation to the legal proceedings.
In a statement to the Hong Kong stock exchange, China Everbright said that it “has fully performed all responsibilities and obligations related to the acquisition”. The company added that it “has reservations about the litigation claims put forward by the plaintiff, and reserves the right to pursue all legal defenses”.
Wrong Kind of News
Fang’s lawsuit is only the latest headache for Ying Li. In December, the troubled developer told the SGX that chief executive Hu Bing had been “detained by the Beijing Municipal Public Security Bureau on 4 December 2020 due to his involvement in suspected bribery”.
China Everbright had taken control of Ying Li in April 2019, with Hu having been chief operating officer of Everbright Ashmore Investments, a real estate fund management unit of the mainland group, before being appointed as Ying Li’s chief executive in June 2019.
In Singapore, Ying Li has been questioned repeatedly by financial regulators, including facing queries last August from the SGX regarding its half-year financial statements for the period ending 30 June 2020.
Last April, Ying Li received questions from the exchange regarding unusual trading in its shares, and in May the company responded to questions from the Singapore’s Securities Investors Association regarding its 2019 annual report.