First Credit Financial Group announced on Tuesday its intention to take legal action against Convoy Global Holdings. The dispute between the two Hong Kong-listed companies stems from a HKD1m loan repayment that is now overdue, the firm claims. First Credit is seeking repayment of shares that were put down by First Credit to guarantee Convoy Global’s loan.
Sin Kwok-lam, chairman of First Credit Finance Group, said he had been left with no option other than to take legal action. Convoy Global holds a 29.85% stake in First Credit, according to a report in Hong Kong’s Standard newspaper.
The loan was initially borrowed by Best Enterprises and Enhance Pacific — both companies that are fully owned by Sin. Sin claims to have asked CSL Securities, the lender, to return First Credit’s 11.16% equity interest.
First Credit was founded in Hong Kong in 2006. In December Convoy’s deputy chairman, Rosetta Fong Sut-Sam, was arrested by the Hong Kong authorities under the Independent Commission Against Corruption (ICAC) and the firm’s Central offices were searched.