Bank of Asia start-up hampered by further legal ramblings
An American businessman filed a lawsuit on Wednesday January 18, 2017 against his partner in a proposed new Virgin Islands’ domiciled bank aimed at the Asia Market.
Chad Holm and FH investment (BVI) Ltd, are taking legal action against the owners of Sancus Financial Holdings Limited, resident in the VI.
The owners of Sancus Financial Holdings Limited are essentially Hong Kong residents, Carson Wen and Julia Yuet Shan Fung.
Mr Holm and FH Investment (BVI) Ltd are alleging breach of contract and breach of fiduciary duties.
The fight between the Wens and Holm is part of a dispute relating to attempts to establish a new bank; Bank of Asia, which has been conditionally approved for a banking license in the Virgin Islands. No known operations have started.
First Lawsuit
Virgin Islands News Online had first and accurately reported in January of last year that a prominent Hong Kong businessman was seeking to open a bank here in the Virgin Islands in late 2016.
The main players were Hong Kong businessman and Group CEO of Financial Holdings (BVI) Ltd, Carson Wen and Deputy CEO of Financial Holdings (BVI) Ltd, Mr Chad C. Holm. Financial Holdings (BVI) Ltd is based in Admiralty, Hong Kong.
However, in a Writ of Summons filed in the High Court of the Hong Kong Special Administrative Region in October 2016, Financial Holdings (BVI) Limited and Carson Wen were seeking $10,045 from three business persons who were seeking to have a Bank opened here in the Virgin Islands.
There was reportedly a dispute between one of the original founders of FHL, Mr Wen and three of his executives who had left and were being accused of setting up a competing business and with there being some conditions of licensing that has been put on by Financial Services Commission (FSC), the Bank apparently was having difficulties getting removed.
Synopsis
On January 10, 2017 Bank of Asia announced that a Chinese company, V1 Group, will invest US$30.8 million in the bank. After this, the bank will have raised US$43 million.
As part of the deal with V1 Group, the bank will be asking the Financial Services Commission (FSC) to lower the minimum amount of capital required to open for business from US$100 million to US$38 million. This news site understands that the FSC is yet to vote on this.
The problem for the bank arising from the lawsuit is that the claim amount is very large, in excess of $50M.
In the transaction with V1 Group, there is a clause that says V1 Group does not need to complete the deal if, according to our reliable source who is very close to this matter, “There must not have been commenced or threatened any proceedings or action …that may have the effect of preventing, delaying, making illegal, or otherwise interfering with the transactions contemplated…”
Clearly this lawsuit will bring this item into the picture and will likely require a new review of the deal by the V1 Group board of directors.
It is our information that this claim puts at risk a serious amount of capital, which is important, as the FSC is voting to potentially allow the bank to run on less capital. This lawsuit could have a serious effect on this.
“The logical conclusion at this point is that at a bare minimum the FSC will need to have a hard look at the facts of this case before voting on the minimum capital reduction requested by the bank. There is a higher risk now that the FSC says no to the request by the bank,” explained our expert source.
.png)
.png)
.png)
Follow Us On
13 Responses to “Bank of Asia start-up hampered by further legal ramblings”