CK Asset's Pan Su-tong wins lawsuit over non-performance in transferring the land at Ho Man Tin Station, receiving compensation of over 1.5 billion yuan

The former chairman of GaoYin Group, Pan Su Tong, and his GaoLin Investment, were sued in 2021 by a company under Cheung Kong Holdings (01113.HK), claiming that they resold the privately held MTR Ho Man Tin Station Phase 1 project to Eagle Group. According to the agreement, Cheung Kong had the right of first refusal for the project, and Pan Su Tong and GaoLin were required to compensate for the breach of contract. After a trial, the acting judge Chen Haoqi recently issued a ruling, determining that Cheung Kong won the case; Pan Su Tong has been declared bankrupt, and GaoLin must compensate over HKD 1.5 billion.

The judge stated that the dispute centered on the defendant's claim that the plaintiff's representative, Ma Li Zhi, had indicated through messages and in meetings that the plaintiff would not participate in the Ho Man Tin project and would not pay GaoLin HKD 1 billion for MTR. The defendant believed that the plaintiff had waived the "Right of First Refusal Agreement."

The judge noted that the plaintiff's representative did indeed state in the meeting, "You can find another developer to deal with. It's better than us marrying you for sure, better than us working with someone else," but believed that the plaintiff was hoping that the Industrial and Commercial Bank of China would provide a loan first. Ultimately, the bank only agreed to a loan limit of HKD 6 billion, which the plaintiff found unsatisfactory. The judge considered the representative's remarks to be merely negotiation tactics, serving as leverage to pressure the bank for concessions.

The judge concluded that if the plaintiff continued to participate in the project, they could ultimately gain approximately HKD 2.25 billion. After discounting, the judge determined that the plaintiff's current damages amounted to HKD 1.574 billion, thus ruling that GaoLin must compensate that amount plus interest