HONG KONG – A Chinese tycoon who snapped up mansions and offices in Hong Kong and London faces demands from banks to repay more than US$200 million (S$272.2 million) of loans for which he and his family had provided personal guarantees, in a sign of further liquidity problems for the businessman and his property investment company.
Nanyang Commercial Bank has demanded payment from Mr Chen Hongtian, chairman of Hong Kong-based investment company Cheung Kei Group, and his wife, Mrs Chen Yao Li Ni, on five overdue term-loan facilities totalling HK$799 million (S$138.9 million), plus default interest, according to a writ dated April 17.
Each has provided personal guarantees for the loans and has agreed to be liable independently to pay for all sums guaranteed, according to the writ. The term loans dated 2017 all have a five-year tenor and were outstanding as of March 8.
The latest lawsuit from Nanyang Commercial Bank followed a separate demand by UOB in March seeking payment of loan principal and unpaid interest, plus default interest, totalling HK$848 million. Mr Chen, his wife and his son had made a similar personal guarantee for that loan. The loan was due and payable as of March 21.
Plagued by what he has called “short-term liquidity issues” at Cheung Kei, which acquires and operates real estate assets globally, Mr Chen has lost at least US$1.4 billion worth of properties to creditors, both in Hong Kong and London, according to data compiled by Bloomberg. Among these properties, creditors have put up for sale an US$892 million office tower in Hong Kong’s Hung Hom area and two buildings in London’s Canary Wharf.
Cheung Kei did not respond to a Bloomberg e-mail requesting comment and phone calls to the company’s Hong Kong office went unanswered on April 22.
Representatives of Nanyang Commercial Bank and UOB did not respond to Bloomberg’s e-mail inquiries.
An ongoing downturn in office markets worldwide has weighed further on properties previously owned by Cheung Kei. Sales plans for 5 Churchill Place, one of the group’s investments in Canary Wharf, have been shelved as interest rates remain high and vacancy rates shoot up.
The defendants have 14 days from the date of the writ to either satisfy the banks’ claims or to indicate to the court whether they will contest the proceedings or make an admission, according to the court filing. BLOOMBERG
