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Letter from The Chairman

Hong Kong, Oct. 10, 2016 (GLOBE NEWSWIRE) -- Letter from the Chairman

With every challenge and obstacle, First Asia Group has grown more resilient and determined to succeed and establish ourselves as a successful and responsible member of the society to all those it deals with, its valued investors, business partners, the local communities and the public at large.

As with all businesses that have an ambitious vision for sustainable growth to drive long term success, it is not uncommon that we constantly face challenges and scrutiny from our stakeholders. In fact, we value constructive engagements and dialogue with various stakeholders in order to identify opportunities for enhancing corporate governance, investor protection, risk management and strategic growth and development.

Strategy highlight

We take this opportunity to highlight that as part of our overall development strategy, we continue to seek potential acquisition projects in land and property development as well as consultations for secondary or dual listing opportunities in various jurisdictions. Emerging market or growth enterprise market listed companies are now valued at up to US$65 million with a 51% controlling stake costing at least US$30 million. Major shareholders have produced adequate fund proof for potential acquisitions, and financial and legal advisers have been engaged to conduct both financial and legal due diligence of promising targets with a time horizon of 12 months leading to completion.

For Hong Kong land owners

Upon successful listing in the Hong Kong Stock Exchange, we intend to purchase the following land at a consideration of 200-300% of the co-owners’ initial purchase price:

  1. Fanling:Section A of Lot No. 1685 in D.D. 76, North New Territories, Hong Kong
  2. Kam Tin 1:Section F of Lot No. 1703 in D.D. 106, Yuen Long, New Territories, Hong Kong
  3. Kam Tin 2:Lot No. 1702 in D.D. 106, Yuen Long, New Territories, Hong Kong
  4. Kam Tin 3:Lot No. 1667 in D.D. 106, Yuen Long, New Territories, Hong Kong
  5. Pat Heung:Lot No. 249 in D.D. 110, Yuen Long, New Territories, Hong Kong
  6. Tung Chung:Lot No. 48 in D.D. 3, Tung Chung, Lantau Island, New Territories, Hong Kong
  7. Lau Fau Shan:Section B of Lot No. 2277 in D.D. 129, Yuen Long, New Territories, Hong Kong

With reference to past successful development projects of Asian property conglomerates where agricultural land has been acquired and developed as part of their long term investment strategy (click here and here to see related news articles), First Asia aims to benchmark and enhance upon such business model and strategy through thorough planning, due diligence and implementation. We strongly believe in our land business model and will continue to acquire land and achieve returns for our investors.

Share trading

According to the Quantitative Equity Report by Morningstar, Inc. released on 6 October 2016, the ordinary shares of First Asia Holdings have achieved a 4-star rating, a measure of the Quantitative Value of a stock that it is “somewhat undervalued”.

Click here to see Morningstar report

In terms of trading and liquidity, various securities brokers offer stock quotation, market making and share trading services to shareholders of OTC Markets including Interactive Brokers Group, Inc. and BOC International Holdings Limited, E*Trade Financial, etc.

Click here to see BOC trading platform

Historical trading record can also be seen at http://www.otcmarkets.com/stock/FAHLF/chart.

Upon successful listing in the Hong Kong Stock Exchange, shares in First Asia may be swapped for Hong Kong shares to provide more liquidity to shareholders (although this is not a public offering of, or solicitation to buy or sell, any securities to any person to whom it is unlawful to make such offer or solicitation in any jurisdictions and nothing herein shall be construed as such).

Media coverage not to be taken at face value

It has recently come to our attention of media coverage of Hong Kong land purportedly acquired at HK$1.00 through offshore vehicles to allegedly avoid stamp duty liability which idea is totally groundless and misconceived. Under Hong Kong law, the Stamp Office (with the support of the Rating and Valuation Department) is empowered with anti-avoidance measures to ensure that appropriate level of stamp duty is paid by parties to a sale of property transaction. In particular, the law provides a formula for the determination of the consideration for stamp duty purposes, where the market value of a property will be deemed such that stamp duty will be assessed based on the market value.

With a well-established and sophisticated tax system and anti-avoidance measures in Hong Kong, readers ought not be misled and accept such news reporting at face value. If parties could artificially price transactions at nominal value to avoid stamp duty, then the law makers and enforcement authorities would not have passed and implemented anti-avoidance laws, with Departmental Interpretation and Practice Notes in support of the same, and presumably result in losses of tax revenue in the millions. Quite to the contrary, Hong Kong tax revenue has reportedly hit a record breaking high in the fiscal year 2014/2015 where the rise was largely due to an upsurge in stamp duty revenue. One should therefore not be naïve to underestimate and make a mockery of the tax collector and long established system and undermine Hong Kong’s reputation as an international commercial hub. We question therefore whether the media intended to mislead readers into thinking that Hong Kong tycoon Mr. Lee Ka-shing could dispose of Cheung Kong Center tomorrow for HK$1.00 and escape the judgment of Inland Revenue, Rating and Valuation Departments and Land Registry?

Malicious attacks

Whilst corporations must persevere in the face of adversity and be accountable to its stakeholder, First Asia does not tolerate and will not succumb to malicious acts aimed at sabotaging the interests of its shareholders and corporate reputation with an apparent motive for personal gain.

Here, reference is made to First Asia’s acquisition of First Asia Tower in February 2011 from former bankrupt persons Mr. Kuthoor Shanty Bernard and Ms. Tsoi Tin Kwan Fanny for a consideration of HK$140 million. Arising out of this transaction, Mr. Kuthoor and Ms. Tsoi both held substantial shareholding in First Asia through their offshore vehicles.


Dispute arose when Ms. Tsoi stole HK$7 million from First Asia’s subsidiary and liabilities connected to First Asia Tower were later revealed which should have been but were not disclosed in the sale and purchase transaction. From then on, management has been actively assisting the police to prosecute Ms. Tsoi for defrauding the company and embezzlement as well as seeking redress in the civil courts for breach of warranties and damages where the long awaited trial was finally set in May 2015.

Click here for a copy of letter to the police

It was in light of the fact that First Asia was adamant in bringing Mr. Kuthoor and Ms. Tsoi before justice that First Asia, affiliates and their management were under constant malicious attacks in the form of criminal intimidation, criminal damage, social media bullying and harassment. The reason behind such kind of animosity in a given dispute is simple: to sabotage the corporate image and interests of the group and its shareholders and affiliates in order to pressure a settlement which is tantamount to extortion.

Injunction Against Fanny Tsoi Tin Kwan

With just months before the five-day trial of the Hong Kong High Court actions by First Asia subsidiaries against Fanny Tsoi Tin Kwan and Kuthoor Shanty Bernard set on 18 May 2015, one of the main witnesses of First Asia became a victim of threats made by triad members purporting to have been hired by one of the defendants in the High Court actions, and demanding the victim to:

  • withdraw of the court actions against their “boss”,
  • refrain from giving evidence in court, and
  • pay her HK$40 million.

Thugs also unlawfully entered the office premises of First Asia Finance Limited (a First Asia subsidiary and plaintiff in one of the High Court actions) making similar demands.

The victim immediately sought help from the police and successfully obtained an Order for Injunction from the High Court against the defendant and former bankrupt Fanny Tsoi Tin Kwan on 15 October 2014 that she (whether by herself or her servants or agents etc) be restrained from making threats to kill and/or threats to inflict physical harm and/or threats to commit other criminal acts on the victim and his family members.

Click here and here for Injunction Orders made against Fanny Tsoi Tin Kwan

Even prior to these threats, there had been numerous occasions where First Asia and its affiliates fell victim to criminal damage by suspectedly the same group of offenders, some of which were reported in the following news headlines:

On one occasion, the police were able to arrest a 38 year-old woman named Tsoi who was reported to have affiliations with triads (“被捕女子姓,三十八歲,消息稱有人具黑幫背景”). The arrested woman was in fact Tsoi Tin Kwan Fanny.

In recent news media, Ms. Tsoi is also seen to have sought help from Hong Kong Legislative Council member James To Kun-sun complaining that she was a victim of attempted kidnapping and extortion. Ms. Tsoi even sought to gain sympathy from the public by displaying pictures of red paint purported to have been targeted at her home. Incredible as it seems that anyone would kidnap a former bankrupt to hold for ransom, it is deplorable that politics and media are exploited to create a diversion and gain sympathy from the unwary public. One does not have to look far to find that a former bankrupt without clean hands has concocted a fanciful story to exculpate her wrongdoing.

Is this the dark side of the democratic party that James To Kun-sun, as a respectable Legislative Councillor who is entrusted to represent the Hong Kong people, was desperately seeking self-promotion to gain support from electors just months before the election and riding on public sentiments surrounding the bookseller Lee Bo? We very much doubt the motives of James To and the media involved in bolstering a story and question whether they were blindly protecting former bankrupt persons and accepting their complaints at face value without conducting due diligence and allowing themselves to be used to escape justice. In today’s society, can politicians go as far as forsaking the truth and mislead the public for self-interest? If so, it would be a direct insult to the wisdom of the audience and undermining Hong Kong’s rule of law and trespassing the boundaries of morality. Click here, here and here for related news

The media and public are reminded to be wary of the following former and/or current bankrupt persons:

  1. Tsoi Tin Kwan Fanny – click here for bankrupt record and here for new bankruptcy petition recently filed against her on 7th October 2016

  1. Kuthoor Shanty Bernard – click here for bankruptcy record

  1. Kuthoor Poonam Bernard – click here for bankruptcy record

  1. Chui Sang Derek – click here for bankruptcy record

In any event, First Asia is now seeking to liaise with the Hong Kong Police Force for the offer of a HK$10 million bounty in connection with the above crimes. We urge any member of the public who has information related to the crime or as to the whereabouts of the suspects to contact us without delay. The reward of Ten Million Hong Kong dollars (HK$10,000,000) will be paid by First Asia to a member of the public giving information leading to the arrest and satisfactory prosecution of the culprit.

Justice Granted! First Asia Wins Legal Battles against Fanny Tsoi Tin Kwan and Kuthoor Shanty Bernard

Finally, to put an end to the dispute, we are pleased to report that First Asia Holdings Limited has triumphed in the legal battles against Fanny Tsoi Tin Kwan and Kuthoor Shanty Bernard in the High Court of Hong Kong. The full Judgment can be viewed at:

http://legalref.judiciary.gov.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=98727&QS=%2B&TP=JU

Click here for Chinese translation of the Judgment

In summary, the cases involved:

  1. High Court Action No. 1070 / 2011 - Our licensed money lender subsidiary First Asia Finance Limited claiming against Ms. Tsoi for repayment of a HK$7 million loan or damages for Ms. Tsoi’s fraudulent misrepresentation

  1. High Court Action No.1589 / 2011 - Our investment holding subsidiary Vagas Lane Limited claiming against Mr. Kuthoor for breach of warranties under a transaction for the sale and purchase of shares

  1. High Court Action No.1774 / 2011 - Ms. Tsoi and Mr. Kuthoor claiming against Alan Sun and our CEO Kimmy Luk for HK$10 million pursuant to alleged oral agreements

Prior to trial, Mr. Kuthoor was adjudged bankrupt on 26 March 2014. By reason of his bankruptcy, Mr. Kuthoor had no standing to defend the breach of warranties claim nor to pursue his claim for HK$10 million. In this connection, Deputy High Court Eugene Fung SC held that Vagas Lane has proved its claim, and in finding that Mr. Kuthoor was in breach of the warranties, ordered Mr. Kuthoor to pay Vagas Lane the sum of HK$940,099.26 by way of damages together with interest thereon from the date of judgment until full payment as well as legal costs.

As for Ms. Tsoi, in a futile attempt to defend the claim for repayment of the HK$7 million loan, she raised allegations of oral agreements that she was entitled to additional HK$10 million in bonus shares or payment in lieu pursuant to the share purchase transaction. In this regard, the Honourable Judge noted there were “a number of unsatisfactory features in Ms. Tsoi’s case”.

Firstly, Ms. Tsoi’s pleaded case was not fully supported by her own evidence. Secondly, there was insufficient cogent evidence for Ms. Tsoi to establish the existence of her alleged oral agreement of bonus shares. Thirdly, it was inherently improbable that Ms. Tsoi would enter into an oral agreement which was not evidenced in any written form. Even the evidence of the solicitor who acted on behalf of Ms. Tsoi and Mr. Kuthoor in the share purchase transaction could not be regarded as cogent corroborative evidence to support Ms. Tsoi’s case.

In addition, the Honourable Judge preferred the evidence of another witness to that of Ms. Tsoi in relation to the provenance of a document which she sought to rely on to support her case.

As to Ms. Tsoi’s claim for HK$10 million as payment in lieu of the alleged bonus shares, the Honourable Judge went on to find that there were “a number of inconsistent features in Ms. Tso’s case”.

Firstly, there was an internal inconsistency in Ms. Tsoi’s pleaded case and her own evidence. Secondly, there was no logic for Ms. Luk to enter into the alleged oral agreement as to payment in lieu of bonus shares. Ms. Tsoi’s answer when asked about this in cross-examination was found to be “non-sensical”. Thirdly, Ms. Tsoi’s still asking for bonus shares was inconsistent with her own case that the parties entered into an oral agreement for payment in lieu. Fourthly, it was inherently improbable that Ms. Tsoi would enter into such oral agreement which was not evidenced in any written form. Fifthly, if such oral agreement indeed existed, the Judge would have expected to see demands by Ms. Tsoi and Mr. Kuthoor yet no contemporaneous documentation showing such demands were made.

As for the claim by First Asia Finance, the Honourable Judge accepted the evidence that Ms. Tsoi was experiencing serious cash flow problem and needed HK$7 million to complete the purchase of a house, and found that there was a HK$7 million loan advanced by First Asia Finance to Ms. Tsoi. The Honourable Judge ordered her to pay First Asia Finance HK$7 million together with interest until full payment as well as legal costs.

With judgment finally obtained in the civil courts, First Asia has sought help from Hong Kong lawyers to resume criminal investigation against Ms. Tsoi and related persons and lay appropriate charges against them.

Click here for a copy of letter to the police regarding criminal investigation

Enforcement actions and alert to third party buyers

With the judgments against Mr. Kuthoor and Ms. Tsoi, and enforcement actions well underway, their assets will ultimately be ceased and liquidated to satisfy judgment including but not limited to any of their shareholding in First Asia. Any assets including shares may be charged by order of the Courts and may not be readily transferred. This may explain why, unlike other shareholders of First Asia, Mr. Kuthoor and Ms. Tsoi are unable to deposit their shares in broker firms for trading.

Notice is hereby given to warn potential innocent third party purchasers of any shares (or other assets) purportedly owned by Fanny Tsoi Tin Kwan and Kuthoor Shanty Bernard and their respective offshore vehicles Golden Tree Limited and Sunford Limited as those assets may already be subject to enforcement actions or have been ceased by the Official Receiver as part of their bankrupt estate. First Asia or any of its affiliates shall not be liable for any loss and damage of any kind as a result of anyone entering into purported transactions with such individuals and their corporate vehicles.

First Asia appreciates the support of its shareholders and will strive to enhance and protect the interests of its group and stakeholders.

Click here for Chinese translation of this letter from the Chairman

An open letter to Tsoi Tin Kwan Fanny can also be read here.

9th October 2016

*Nothing contained herein shall be construed as the giving of advice or the making of a recommendation, offer or solicitation to anyone (in relation to any securities or otherwise) and should not be relied upon by anyone as the basis for any decision or action.

Source:First Asia Holdings Limited