Wednesday, 7 October 2009
Ex-Ernst & Young auditor accused of siphoning assets
Christopher Ho Wing-on is a rich man, allegedly worth more than US$500 million. But he was accused in court of partially building his fortune by siphoning assets from disgraced tycoon James Ting’s failed electronics empire Akai Holdings in the late 1990s.
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Ex-Ernst & Young auditor accused of siphoning assets
Naomi Rovnick
06 October 2009
Christopher Ho Wing-on is a rich man, allegedly worth more than US$500 million. But he was accused in court of partially building his fortune by siphoning assets from disgraced tycoon James Ting’s failed electronics empire Akai Holdings in the late 1990s.
Ho also has deep past links with Ernst & Young Hong Kong, Akai’s former auditor that last month paid about US$400 million to settle a separate audit negligence case brought against it by the collapsed electronics company’s liquidator, Borrelli Walsh.
Ho and his company, Grande Holdings, do not admit any liability.
In November 1999, two months before Akai’s banks realised the company was insolvent and began proceedings to wind up the company, Ho and Ting signed an agreement transferring all of Akai’s businesses to Grande, according to a 2001 High Court ruling.
Grande makes its money from licensing the Akai and Sansui trademarks to electronics manufacturers and managing the distribution of these branded goods, according to its most recent annual report.
The Hong Kong stock exchange has never publicly investigated the asset transfer.
Ho was a partner with Ernst & Young until 1990. He was also Akai’s audit engagement partner at the company.
His name came up repeatedly in Borrelli Walsh’s audit negligence lawsuit against Ernst & Young.
Leslie Kosmin, counsel for the liquidators, said during case management hearings in 2007 that in 1997, Ho and Ting struck a dishonest deal to cover up Akai’s losses.
In 1997, within a complex restructuring of Akai’s Singer Furniture division, a Ho family trust paid US$27.5 million to Akai, Kosmin said.
Without that cash, the liquidators alleged in a 2007 case management hearing, Akai would have reported a US$27.5 million loss for that year.
The deal was not disclosed in Akai’s 1997 accounts. The liquidators alleged Ernst & Young advised on the restructuring deal.
In 1998, the liquidators claimed, Ting stole US$23 million from Akai and paid it to Grande.
Ho and Grande could not be reached.
Ernst & Young said: “We have not been party to the case that was settled [yesterday] between Grande and the Akai liquidators.”
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