A subsidiary of the AMTD Group, whose fintech firm attracted scrutiny after its shares soared 21,000 per cent following its itemizing in July, is being sued by a Chinese financial institution for $264mn in Hong Kong over alleged breach of contract.
AMTD Digital’s market worth briefly overtook Goldman Sachs when its shares rocketed. The surge put the highlight on Calvin Choi, the chair of AMTD Group who’s contesting a two-year ban by Hong Kong monetary regulators.
AMTD Global Markets, an asset administration unit underneath AMTD Group, was final week served with the declare by the Bank of Qingdao, a Chinese lender, over an alleged breach of an funding administration contract courting again to 2015.
In a submitting to Hong Kong’s High Court by Bank of Qingdao final Thursday, the lender accused the corporate of violating settlement phrases with unauthorised transactions. The financial institution invested US$350mn in AMTD Global Markets from 2015 to 2017 for funding providers, in response to the courtroom paperwork.
Bank of Qingdao claimed AMTD Global Markets breached its contract when it subscribed to 3 securities value $264mn issued by a Cayman Islands-based company entity referred to as Everglory Strategic Investment in round June 2022, mentioned the paperwork.
The financial institution claimed that its contract stipulated that AMTD’s complete funding in securities issued by a single entity mustn’t exceed $50mn. It had ordered a termination of the funding settlement in July and is now asking the AMTD unit handy over the sum as damages.
AMTD Global Markets on Monday disputed Bank of Qingdao’s “wrongful” claims in a separate submitting to town’s High Court.
The firm mentioned the financial institution was “regularly updated” of its funding portfolio and that the clause referring to a $50mn cap on investments by a single securities issuer was eliminated in 2016 underneath mutual settlement.
AMTD additionally mentioned that the Bank of Qingdao’s unilateral try and terminate the funding settlement in July was wrongful and that it was searching for compensation from the financial institution over undisclosed losses and damages stemming from the contract.
AMTD’s Choi had been on the board of administrators of the Bank of Qingdao however had resigned per week earlier than the financial institution filed its lawsuit.
Choi “would not be able to dedicate enough time and attention to continue with his role . . . due to increasing demands on time to other engagements”, mentioned the financial institution in a submitting to the Hong Kong inventory alternate in August.
The securities that AMTD allegedly invested in, issued by Everglory Strategic Investment, have been scrutinised by town’s inventory alternate in 2019.
Back then, the Hong Kong inventory alternate disciplined an organization referred to as IntelliCentrics Global Holdings for not complying with itemizing guidelines. The firm had ploughed $55mn of their $60mn in IPO proceeds into promissory notes acquired by the corporate by means of an AMTD automobile, together with some issued by Everglory Strategic Investment, in response to a press release launched by the alternate.
AMTD didn’t reply to a request for remark. Qingdao mentioned it had “hired a professional team of lawyers and will continue to pursue the litigation process in accordance with the law”.
No courtroom hearings have been scheduled for the instances, in response to Hong Kong’s judiciary.