Real Estate and Finance Fund (in Liquidation) and Another v. Sun Cheuk Pak Alan and Others

HCA 938/2022

[2025] HKCFI 2478

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 938 OF 2022

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BETWEEN

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JUDGMENT

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A. INTRODUCTION

1.This case concerns allegations of a conspiracy (the “Scheme”) designed to strip value off real estate assets from the Real Estate and Finance Fund (“REFF”) and its principal shareholder, Worldwide Opportunities Fund SPC (“Worldwide”, collectively with REFF, the “Plaintiffs”). At its core, the Plaintiffs claim that assets entrusted to REFF were improperly dissipated, substantially diminishing the fund’s value.

2.At the center of the Plaintiffs’ claims are three individuals – the 1^st Defendant (“Alan (D1)”), 2^nd Defendant (“Kimmy (D2)”), and 3^rd Defendant (“Ricky (D3)”) – whom the Plaintiffs characterise as the “Masterminds”. On their case, these Masterminds, aided by family members, trusted associates, and an array of corporate entities, conspired to dissipate valuable assets held by REFF. Chief among these assets were two valuable real properties in Hong Kong: a 19-storey commercial building at 8 Fui Yiu Kok Street (“First Asia Tower”) and additional properties located at 11 Hau Fook Street (“Hau Fook Street Properties”).

3.Critically, neither REFF nor these real estate holdings belonged to the Defendants. The economic interest was substantially held by AXA China Region Insurance Co (Bermuda) Ltd (“AXA”), a significant external investor whose investment of approximately HK$400 million represented the premiums of many policyholders. Yet, upon completion of the alleged fraudulent Scheme, REFF retained neither its original capital nor these tangible assets. Instead, what remained were shares and a convertible note issued by the 17^th Defendant (“SGOCO (D17)”), with a combined value not exceeding HK$50 million.

4.Against this backdrop, the Plaintiffs brought claims against all 20 Defendants for unlawful means conspiracy. They further allege breaches of fiduciary duty against certain Defendants, specifically the de jure and shadow directors of the Plaintiffs, and against others for dishonestly assisting such breaches. The Defendants deny these claims.

5.Over the course of a 19-day trial involving extensive evidence from numerous witnesses, the complexity of the issues became clear. Counsel filed comprehensive written submissions, amounting to 511 pages from the Plaintiffs and a further 612 pages collectively from the three groups of Defendants. Given the scale and intricacy of these submissions, it is neither feasible nor helpful for this Court to address individually every argument presented. The principal task for this Court, instead, is to resolve the fundamental questions raised by the parties, explaining the reasoning and assessment of the evidence critical to its conclusions.

6.At the outset, I acknowledge the exemplary skill with which all counsel conducted the trial. Mr Victor Dawes SC appeared for the Plaintiffs. Mr Abraham Chan SC represented the 1^st, 3^rd to 6^th, 8^th, and 20^th Defendants (collectively, the “Sun Family Defendants”, due to their close affiliation with the Sun brothers – Alan (D1) and Ricky (D3) Sun). Mr Justin Ho appeared for the 2^nd, 9^th, 12^th, 13^th, 15^th, and 16^th Defendants (“Luk Family Defendants”, due to their affiliation with Kimmy (D2) Luk). Mr Martin Ho represented the 7^th, 11^th, 14^th, and 17^th to 19^th Defendants (“SGOCO Group Defendants”), closely affiliated with SGOCO (D17) – the entity which indirectly acquired REFF’s key assets (the First Asia Tower and Hau Fook Street Properties) at undervalue. All counsel, ably assisted by junior counsel and solicitor teams, presented their cases with great thoroughness, courtesy, and clarity, thus substantially aiding the Court in resolving the complex matters at hand.

7.Having carefully weighed the evidence presented, I am compelled to conclude that the Scheme was indeed fraudulent. The central question posed by the Plaintiffs at the start of the trial – if the Scheme was conducted honestly and with legitimate commercial objectives, what became of the substantial value entrusted to REFF – finds a clear answer: that value was deliberately dissipated through a sophisticated series of transactions. Although cloaked in purported commercial legitimacy, I find that these transactions did not have a genuine commercial purpose other than to transfer value from REFF to the Masterminds and their associates.

8.This judgment is structured as follows: I first outline the core factual background (Section B), assess witness credibility (Section C), and then detail my factual findings concerning the Scheme’s fraudulent nature and the involvement of each Defendant (Section D). I subsequently provide an overview of the Scheme’s mechanisms (Section E), address the Plaintiffs’ claims of unlawful means conspiracy (Section F), consider the claims relating to fiduciary breach and dishonest assistance (Section G), and conclude with the quantification of damages (Section H).

B. THE FACTUAL BACKGROUND

B1. Acquisition of First Asia Tower

9.The story began in 2007 and 2008, when Kimmy (D2) became acquainted with Alan (D1) and Ricky (D3). Over the ensuing years, they formed a close working relationship: Kimmy (D2) partnered with Alan (D1) in business ventures, and Ricky (D3) served as their “legal adviser”.

10.In that same period, Kimmy (D2) turned her attention to the 12^th Defendant (“FAH (D12)”), a Canadian corporation whose shares had been traded over-the-counter (“OTC”) since 2006. By 2010, FAH (D12)’s biotechnology activities had all but ceased, leaving it effectively a shell company. Recognising a chance to consolidate her holdings, Kimmy (D2) opted to acquire FAH (D12) as part of her investment strategy.

11.In December 2010, Kimmy (D2) decided to purchase a 19-storey commercial building at 8 Fui Yiu Kok Street (i.e., the First Asia Tower), which was wholly owned by the 11^th Defendant (“FAT (D11)”). FAT (D11) was indirectly owned by Ms Fanny Tsoi (“Tsoi”) and Mr Kuthoor Shanty (“Shanty”). Kimmy (D2) then arranged for her company, Vagas Lane Limited (“Vagas Lane”), to acquire all shares in FAT (D11) from Tsoi and Shanty. This acquisition was funded by a combination of cash and allotment of shares in FAH (D12) to Tsoi and Shanty.

12.Upon completion of this transaction, Vagas Lane controlled the First Asia Tower via its shareholding in FAT (D11). Specifically, Vagas Lane directly held 10% of FAT (D11)’s shares, while its wholly owned subsidiary, Paris Sky Limited (“Paris Sky”), held the remaining 90%. After this acquisition, Kimmy (D2) consolidated her holdings further by transferring all shares of Vagas Lane into FAH (D12), receiving in exchange newly issued FAH (D12) shares directed to an entity under her control. After this restructuring, Kimmy (D2) secured control and ownership of the First Asia Tower through her restructured corporate group.

B2. Formation of REFF

13.By 2012, Alan (D1), who had by then assumed the role of marketing director at FAH (D12), proposed securitising the First Asia Tower through a dedicated investment fund, specifically designed to attract external investors. Alan reasoned, and Kimmy (D2) agreed, that this strategy would enhance the valuation of FAH (D12)'s publicly traded shares by providing public exposure to its real estate – the First Asia Tower.

14.To implement this strategy, REFF was incorporated in the Cayman Islands on 25 May 2012 as a dual-class fund. Its capital structure comprised two share classes: management shares, conferring voting rights but no economic interest, and participating shares, conferring economic benefits but no voting rights. This structure aimed to delineate control from economic benefit, an arrangement oft employed in fund management.

15.As to the corporate structure of REFF:

(1) Giant Management Hong Kong (“Giant HK”), a company incorporated by Kimmy (D2), initially held the sole management share. In November 2017, this share was transferred to the 13^th Defendant (“Giant Seychelles (D13)”).

(2) 6,400 participating shares, initially held by Giant HK, and transferred to Giant Seychelles (D13) in September 2012.

(3) At all material times, both Giant HK and Giant Seychelles (D13) were wholly owned subsidiaries of FAH (D12), thereby remaining entities within Kimmy (D2)’s ultimate control.

16.In August 2012, FAH (D12), anticipating the transfer of First Asia Tower into REFF, commissioned Wong Man Hong Surveyors to assess the property’s market value. Their valuation report valued First Asia Tower at HK$379 million as at 23 August 2012 (“WMH FAT Report”).

17.Following REFF’s formation, FAH (D12) transferred Vagas Lane into REFF, converting Vagas Lane into a wholly owned subsidiary of the fund. In return for injecting this valuable asset (and thus indirectly the First Asia Tower), FAH (D12) received 100% ownership of Giant HK and Giant Seychelles (D13) – entities that collectively controlled all of REFF’s management and participating shares. By virtue of these carefully orchestrated transactions, REFF’s principal asset became the First Asia Tower, held indirectly through its subsidiaries, Vagas Lane and FAT (D11).

B3. Recruitment of External Investors

18.With REFF now established, the next step in securitising First Asia Tower was to attract external investors who would purchase interests in the fund. Beginning in 2013, Alan (D2) engaged a licensed fund manager in Singapore, responsible for the Megatr8 Pere Opportunities Fund (“Megatr8”), exploring the possibility of creating a dedicated vehicle for investment in REFF. The arrangement contemplated Megatr8 purchasing the participating shares then held by Giant HK, shares which Giant HK would soon transfer to Giant Seychelles (D13).

19.To facilitate investment, Alan (D2) introduced AXA to Megatr8, proposing that Megatr8's fund become an underlying investment within AXA’s Investment-Linked Assurance Scheme, Evolution (“Evolution”). The proposed arrangement would serve the interests of all involved parties: AXA would benefit via the increased insurance premiums and associated fees, Megatr8 would receive investment management fees, and Giant Seychelles (D13) would realise profits through the sale of its REFF participating shares. Accepting this proposal, Megatr8 established a segregated portfolio specifically named “Megatr8-HKIF(1)”.

20.In late 2013, AXA formally approved Megatr8-HKIF(1) as an eligible underlying investment for Evolution, thus opening a pathway for AXA policyholders to indirectly invest in REFF through Megatr8.

21.Over approximately three years, from 2013 to 2016, AXA policyholders invested roughly HK$214.6 million (around US$27 million) through Megatr8-HKIF(1). With these funds, Megatr8-HKIF(1) acquired participating shares in REFF directly from Giant Seychelles (D13), eventually becoming REFF’s primary external investor. As of 13 May 2016, Megatr8-HKIF(1) held 58.41% of the participating shares in REFF.

22.On 18 March 2016, Alan (D1) and Kimmy (D2) directed a further acquisition to augment REFF’s holdings. Acting on these instructions, REFF’s subsidiary, Vagas Lane, purchased all shares in 11 Hau Fook Street Ltd (“HFS Limited”) from Alan (D1) and Kimmy (D2) at a price of HK$50 million. HFS Limited’s principal asset consisted of real property, specifically the Hau Fook Street Properties.

23.At or around this period, the management of Megatr8 determined that Megatr8-HKIF(1) should be wound down. To ensure continuity of AXA’s investments in REFF, Megatr8 turned to Alan (D1) to identify a suitable successor fund. In response, Ricky (D3) established Worldwide in February 2015, a segregated portfolio company incorporated in the Cayman Islands. Worldwide was thus formed expressly to serve as the successor fund, ultimately designated “Worldwide-HKIF(2)”.

24.In May 2016, Megatr8 formally advised AXA of its intent to wind-down Megatr8-HKIF(1). Megatr8 proposed to AXA a transfer of the fund’s existing assets – including Megatr8-HKIF(1)’s participating shares in REFF – into Worldwide-HKIF(2). This step was intended to preserve AXA’s underlying investment without disruption.

25.AXA consented to this arrangement. As a result:

(1) Megatr8-HKIF(1)’s participating shares in REFF were transferred directly into Worldwide-HKIF(2). Worldwide-HKIF(2) thus became REFF’s largest shareholder.

(2) AXA’s participating shares in Megatr8-HKIF(1) were simultaneously redeemed and replaced with a proportionate allotment of shares in Worldwide-HKIF(2).

26.AXA’s policyholders continued to hold participating shares, thus retaining their indirect economic interests in REFF. Initially, the management share in Worldwide was held by Shenton Asia Asset Management Limited (“Shenton”) although the investment manager was CES Capital International (Hong Kong) Co., Limited (“CES Hong Kong”) (an indirect subsidiary of the China Eastern Airlines Group). But in January 2018, Shenton transferred the management share to CES Cayman International (Cayman) Co., Limited (“CES Cayman”), which thereafter replaced CES Hong Kong and served as Worldwide’s investment manager.

B4. Management of REFF and its assets

27.By 2016, REFF’s principal assets consisted of two substantial real estate holdings: First Asia Tower, valued at HK$379 million according to the August 2012 WMH FAT Report, and the Hau Fook Street Properties, acquired in March 2016 for HK$50 million. These assets were held indirectly through subsidiaries controlled by REFF.

28.The primary responsibility for managing REFF’s substantial real estate portfolio initially rested with Giant HK, the original holder of the management share in REFF. On 28 November 2017, this management share was transferred from Giant HK to Giant Seychelles (D13).

29.Throughout the relevant period, Jason (D9) served as a de jure director of both Giant HK and Giant Seychelles (D13). In these capacities, he ostensibly held ultimate operational authority over REFF. His influence was further reinforced by his additional role as sole director of Vagas Lane, the holding vehicle for the First Asia Tower, until its dissolution.

30.Given his pivotal role in the management of REFF, I pause to make some observations about Jason (D9)’s professional experience.

31.He graduated with a degree in computer science in 2011. Prior to that, he held only junior technical positions – such as foreman, safety officer, and data administrator – with no discernible experience in fund management or corporate finance. In 2011, Jason (D9) joined subsidiaries of FAH (D12) as a project manager, earning between HK$12,000 and HK$13,000 monthly, and reported directly to Kimmy (D2), then FAH’s controlling shareholder. In cross-examination, he explicitly acknowledged Kimmy (D2) as his “boss”. Remarkably, Jason (D9) was appointed sole director of Giant HK in April 2012, swiftly assuming an identical role at Giant Seychelles (D13) by September of the same year. By November 2017, he became sole director of Vagas Lane, then a subsidiary of REFF.

32.It is, to say the least, out of the ordinary that a fund entrusted with assets exceeding HK$400 million would place its governance entirely in the hands of an individual with no evident qualifications or relevant experience in investment management. Equally striking is that Kimmy (D2), Jason (D9)’s acknowledged superior at FAH (D12), simultaneously served as sole director of multiple REFF subsidiaries – HFS Limited, Paris Sky, and FAT (D11) – until 2018. This unusual arrangement meant, at least in formal terms, that Kimmy (D2) was subordinate to Jason (D9), given his directorship of Giant HK and Giant Seychelles (D13), the entities directly overseeing REFF. However counterintuitive this arrangement might appear, REFF’s management structure persisted in precisely this manner.

33.The peculiarities intensified in October 2017, when Jason (D9) abruptly resigned as director of Giant Seychelles (D13). His resignation preceded two pivotal developments: the transfer of the REFF management share from Giant HK to Giant Seychelles (D13) and the subsequent divestiture of REFF’s principal assets to SGOCO (D17), transactions that unfolded predominantly between February and November 2018.

34.Succeeding Jason (D9) as sole director of Giant Seychelles (D13) was Ms Lidyawati Sudjono (“Sudjono”), an Indonesian national – apparently based in Australia – who does not appear ever to have resided or even been physically present in Hong Kong, despite ostensibly managing significant Hong Kong real estate. Very little is known of Sudjono, who has not given evidence nor are any documents relating to Sudjono’s involvement in REEF been produced through discovery. The main medium through which Sudjono managed REFF are said to have occurred via a “work phone”, now allegedly lost, or via an electronic portal, now somehow inaccessible.

35.For reasons that I will come back to below, I do not accept that the de jure directors of Giant HK or Giant Seychelles (D13) exercised genuine managerial control over REFF. Rather, the real decision-makers were the Masterminds – Alan (D1), Kimmy (D2), and Ricky (D3).

B5. Structure of the Scheme

36.The alleged fraudulent Scheme unfolded from 2016 to 2018.

37.According to the Plaintiffs, during this relatively brief span, the Masterminds exploited their positions of de facto control over REFF, dissipating the value its assets. In 2016, REFF held valuable real estate worth over HK$400 million – but by the close of the Scheme, REFF's holdings were drastically diminished, reduced to shares and a convertible note worth no more than HK$45 million. The Plaintiffs identify two distinct phases through which these alleged misappropriations occurred:

(1) Phase One (2016-2017): During this initial phase, the Masterminds allegedly orchestrated two transactions fundamentally harmful to REFF’s financial interests. First, REFF was caused to subscribe for overvalued shares in FAH (D12) (“First Asia Transaction”). Second, REFF (through its subsidiaries) was induced to enter into mortgage transactions (“Mortgages Transactions”) encumbering its primary real estate assets, First Asia Tower and the Hau Fook Street Properties, not for its own benefit, but for the advantage of third parties affiliated with or favoured by the Masterminds.

(2) Phase Two (2017-2018): The Scheme intensified through the subsequent implementation of a purported “Restructuring Plan”. Initially, REFF transferred two subsidiaries – HFS Limited (holding the Hau Fook Street Properties) and Paris Sky (holding First Asia Tower) – to the SGOCO group, allegedly at significant undervaluation (“HFS Transaction” and “Paris Sky Transaction”, respectively). Thereafter, REFF engaged in a related transaction whereby it purchased a portion of a convertible note (“Note Portion”) from the 6^th Defendant (“Madam Lin (D6)”, the mother-in-law of Alan (D1)) at an inflated price (“Note Portion Transaction”).

B5.1. Phase One: The First Asia and Mortgages Transaction

38.In late 2016, REFF made the decision to acquire shares in FAH (D12). The Plaintiffs allege that this investment was deliberately structured to inflate the purchase price, enriching the Masterminds at REFF’s expense. The Defendants counter that REFF subscribed for the shares believing their value would rise due to FAH’ (D12)s uplisting from the OTC market to NASDAQ (the “Uplisting Plan”).

39.On 2 August 2016, REFF’s participating shareholder, Worldwide, transmitted a revised Private Placement Memorandum (“PPM”) to AXA. Critically, this PPM would – upon revision – have granted REFF the authority it previously lacked to invest in equities. This is an indispensable precondition for the First Asia Transaction to proceed.

40.In September 2016, AXA approved the revisions to the PPM by returning a signed acknowledgment of consent to Worldwide, thereby ratifying the amended terms of Worldwide’s investment mandate.

41.On 22 December 2016, REFF acquired 6,410,257 shares in FAH (“First Asia Stake”) for a total price of HK$125 million, calculated at US$2.50 per share. This valuation was unusual in that it rested solely upon a single, anomalous OTC transaction involving merely 100 shares conducted the previous day. Moreover, this valuation exceeded FAH’s established trading range during the preceding three weeks – between US$1.27 and US$1.51 per share – by more than double.

42.Moreover, REFF did not remit the HK$125 million payment directly to FAH itself. Instead, these funds were inexplicably routed to First Asia Capital, a private entity controlled by Kimmy (D2) and bearing no discernible relationship with FAH (D12). Thereafter, between December 2016 and January 2017, First Asia Capital channelled the entire sum to Kimmy (D2), who then transferred it onward to Ricky (D3).

43.But the questionable dealings did not end there.

44.In the months following the First Asia Transactions, REFF’s key real estate holdings were pledged as collateral for two additional mortgage arrangements. The circumstances surrounding the Mortgages Transactions were unusual, chiefly because the secured loans were not drawn for REFF’s benefit. In particular:

(1) On 12 May 2017, HFS Limited granted United Overseas Bank (“UOB”) a mortgage over the Hau Fook Street Properties and assigned corresponding rental proceeds (“UOB Mortgage”). Notably, the UOB Mortgage secured borrowings amounting to HK$110 million taken out by 16^th Defendant (“Asia One AM (D16)”) – an entity indirectly controlled by Kimmy (D2).

(2) On 13 September 2017, FAT (D11) mortgaged the First Asia Tower to China CITIC Bank International Limited (“CITIC Bank”) and assigned its rental proceeds (“CITIC Mortgage”). This CITIC Mortgage secured additional borrowings of HK$185 million by Asia One AM (D16).

45.Phase One thus resulted in the diversion of HK$125 million of REFF’s funds in exchange for shares whose valuation appears materially inflated, while imposing upon REFF mortgage liabilities totalling HK$295 million secured against its key assets. The Plaintiffs thus say that REFF received little benefit from Phase One, as the First Asia and Mortgages Transactions served primarily to benefit third parties rather than REFF.

B5.2. Reverse Takeover: Transition from Phase One to Phase Two

46.Sometime in 2017, Alan (D1) entered into an arrangement with Kevin Wai (“Mr Wai”), the former controlling shareholder of SGOCO (D17), a NASDAQ-listed company. Under this arrangement, which the Defendants term as the “Reverse Takeover”, Alan (D1) would infuse new assets into the group, enabling Mr Wai to exit.

47.Beginning in late 2017, Alan (D1) and Kimmy (D2) took steps to secure substantial equity positions in SGOCO (D17):

(1) On 13 November 2017, Alan (D1) acquired 1.95 million shares in SGOCO (D17) at US$0.80 per share.

(2) On 22 December 2017, Kimmy (D2) acquired a further 2.2 million shares in SGOCO (D17) at US$1.08 per share.

48.By early 2018, these transactions resulted in Alan (D1) and Kimmy (D2) controlling around 30.5% of SGOCO’s issued share capital.

49.Concurrent with these share acquisitions, individuals which the Plaintiffs say are closely associated with Alan (D1) and Kimmy (D2) began assuming directorships within the SGOCO group:

(1) The 7^th Defendant (“Vicki (D7)”) joined SGOCO (D17)’s board and shortly thereafter became a director of its wholly owned subsidiaries – the 18^th Defendant (“SGOCO HK (D18)”) and 19^th Defendant (“Giant Connection (D19)”).

(2) Mr Dominic Li, a witness for the Defendants, was appointed as a director of SGOCO (D17) alongside Vicki (D7).

50.The Plaintiffs urge – and I agree – that these appointments warrant careful scrutiny. At the time of her appointment, Vicki (D7) was 28 years old, with her professional experience confined primarily to the insurance sector. Her background bears no clear relationship to the SGOCO group’s established expertise in technology and green-energy ventures, nor to its subsequent shift into property management. Likewise, Dominic Li, whose professional training was as a dessert chef, had collaborated with Kimmy (D2) in food-and-beverage enterprises. He possessed no obvious experience in property management, technology, renewable energy, or as a director of any publicly traded company. While the absence of formal sector experience alone does not conclusively establish a lack of independence, the timing of these appointments – immediately preceding the restructuring – and the simultaneous share acquisitions by Alan (D1) and Kimmy (D2) collectively raise concerns regarding the independence and intended purpose of these directorships. I will return to this issue below.

B5.3. Phase Two: Restructuring Plan and dissipation of key assets

51.Phase Two concerns the divestment of REFF’s key real estate assets – the Hau Fook Street Properties and First Asia Tower – to entities within the SGOCO group. The Defendants argue that these transactions were justified commercially by a Restructuring Plan directed at addressing REFF's liquidity challenges and capturing potential value appreciation from newly acquired shares in SGOCO (D17).

52.On 14 February 2018, Graval prepared a valuation report (“Graval HFS Report”) that valued HFS Limited at HK$26.1 million.

53.Just eight days later, on 22 February 2018, Vagas Lane sold HFS Limited to Giant Connection (D19), a wholly owned subsidiary of SGOCO (D17), for HK$26.1 million. This valuation was significantly lower – nearly half – of the price REFF paid to acquire HFS Limited in 2016 from Alan (D1) and Kimmy (D2). This disparity underscores the Plaintiffs’ claim that the asset was substantially undervalued.

54.The consideration for HFS Limited was satisfied through SGOCO (D17)’s issuance of approximately 2.9 million shares, each valued at around US$1.10, to Vagas Lane. In practical terms, REFF exchanged the Hau Fook Street Properties for newly issued shares in SGOCO (D17).

55.Following the divestment of the Hau Fook Street Properties to the SGOCO group, a series of interconnected transactions finally resulting in the divestment of First Asia Tower to SGOCO (D17):

(1) On 6 April 2018, Colliers was appointed by FAT (D11) to value First Asia Tower. Colliers valued it at HK$205 million in its report dated 9 May 2018 (“Colliers FAT Report”).

(2) On 18 April 2018, SGOCO (D17) issued a convertible note (“Convertible Note”) worth approximately US$5.7 million (HK$45 million). Madam Lin (D6), Alan’s (D1) mother-in-law, acquired this Convertible Note, which could convert into 3.8 million SGOCO shares, at its face value of HK$45 million.

(3) On 23 April 2018, Vagas Lane transferred its remaining 10% stake in FAT (D11) to Paris Sky, making Paris Sky the sole shareholder of FAT (D11). Concurrently, Vagas Lane transferred all Paris Sky shares to REFF, thus consolidating ownership of First Asia Tower under REFF through Paris Sky.

(4) On 11 May 2018, REFF sold Paris Sky – holding the entire interest in FAT (D11) – to Iris (D4) for HK$205 million (“1^st Paris Sky Agreement”). The purchase funds, which were provided by Alan (D1), were placed into escrow with WK Sun Solicitors (“WKSS”), operated solely by Ricky (D3).

(5) On 6 July 2018, Madam Lin (D6) agreed to sell a portion of the Convertible Note (“Note Portion”) with a face value of HK$18.8 million, convertible into around 1.6 million SGOCO (D17) shares, to REFF. It paid more than HK$250 million for this Note Portion, comprising HK$205 million plus its First Asia Stake valued at around HK$45.8 million. This valuation thus implied a price of around US$20 per share in SGOCO (D17).

(6) Concurrently, on 6 July 2018, the HK$205 million previously held in escrow by WKSS (which was paid as consideration under the 1^st Paris Sky Agreement) was transferred to Madam Lin (D6) as payment for the Note Portion. Ultimately, the same HK$205 million found their way back to Alan (D1).

(7) Meanwhile, on 21 May 2018, Iris (D4) resold Paris Sky to Giant Connection (D19) (“2^nd Paris Sky Agreement”) for HK$368 million, generating a profit of over HK$150 million.

56.The transactions described are conspicuously circular. REFF’s primary asset – First Asia Tower – was effectively transferred into the hands of the SGOCO group through the Paris Sky Transaction. Meanwhile, the HK$205 million, initially earmarked for REFF upon its sale of Paris Sky to Iris (D4), was returned to Alan (D1) through the Note Portion Transaction. What REFF obtained in exchange for “refunding” the HK$205 million (and transferring of the First Asia Stake) was the Note Portion, which was valued at an inflated valuation of SGOCO shares at roughly US$20 each, a valuation around twenty times greater than the share price of US$0.80 to US$1.08 at which Alan (D1) and Kimmy (D2) had earlier acquired their shares. Such marked disparities, say the Plaintiffs, indicate serious irregularities warranting further examination.

57.These irregularities raise significant concerns, to which I will return later in my analysis.

58.Upon the divestments of HFS Limited and Paris Sky into the SGOCO group, these subsidiaries experienced notable leadership changes:

(1) Around June 2018, Kimmy (D2), previously a director of HFS Limited, Paris Sky, and FAT (D11), resigned.

(2) Vicki (D7) succeeded Kimmy (D2), becoming sole director of HFS Limited, Paris Sky, and FAT (D11).

59.At the conclusion of the Restructuring Plan, REFF no longer held either the Hau Fook Street Properties or First Asia Tower. Instead, it had slightly more than 4.5 million shares in SGOCO (D17) – comprising the 2.9 million shares obtained from the divestment of HFS Limited and the Note Portion convertible into an additional 1.6 million shares.

B6. Investigations and Aftermath

60.By mid-2018, AXA had become deeply concerned about the declining performance of Worldwide-HKIF(2). Initially valued at around HK$1,000 per participating share upon inception, its value declined from HK$1,136 in August 2017 to HK$517 in September 2017 – a nearly 50% drop in just one month. AXA sought explanations from Worldwide-HKIF(2) but encountered resistance and received little clarification.

61.The situation deteriorated further in July 2018, immediately following the Paris Sky and Note Portion transactions. The net asset value per participating share plummeted to HK$73.30. This decline proved irreversible; by December 2018, the net asset value languished at HK$68, representing an over 90% erosion over just two-and-a-half years.

62.In February 2019, Ricky (D3) began consulting attorneys in the Cayman Islands to explore how swiftly Worldwide could be wound up. Later that month, Worldwide informed participating shareholders that an “internal review” had determined the fund was economically inefficient, warranting voluntary liquidation. Thus, all participating shares in Worldwide-HKIF(2) would be compulsorily redeemed from 1 March 2019.

63.On 28 February 2019, AXA petitioned the Cayman Islands court to wind up Worldwide. The court granted a winding-up order on 16 May 2019, appointing Joint Official Liquidators (“JOLs”). On 6 July 2022, the JOLs were appointed as liquidators for REFF by the same court.

64.Thereafter, the Hong Kong Police Force (“HK Police”) arrested Alan (D1), Kimmy (D2), and Ricky (D3), among others, on suspicion of conspiracy to defraud and money laundering. Their bank accounts were frozen pending further investigation. As of the date of the trial, formal criminal charges have not been filed against them.

C. THE WITNESSES AND THEIR EVIDENCE

65.14 witnesses gave evidence in connection with the alleged Scheme. Of these, seven are central: Alan (D1), Kimmy (D2), Ricky (D3), Vicki (D7), Jason (D9), Dominic Li, and Mr John Howard Batchelor (“Mr Batchelor”), one of the JOLs appointed over the Plaintiffs. Their evidence lies at the heart of this litigation. Other witnesses gave evidence on more peripheral issues; I refer to their evidence only where necessary. My present focus is on assessing the credibility of the seven principal witnesses.

66.My approach to evaluating witness credibility is guided by settled principles. I respectfully adopt the framework set out by DHCJ Eugene Fung SC (as he then was) in Hui Cheung Fai v. Daiwa Development (unrep., HCA 1734/2009, 08.04.2014). In summary:

(1) Contemporaneous documents, particularly those created before the dispute arose, carry the greatest weight: at §77.

(2) The inherent plausibility of a witness’s account, and the apparent logic of the sequence of events described, are important. Also important is the need to test the consistency of a witness’s evidence against undisputed or indisputable evidence and its internal consistency (including consistency between oral evidence and written statements): at §§78-79.

(3) Courts must exercise caution in not placing undue weight on demeanour or character; appearances can mislead: at §80.

(4) Where there is a conflict of evidence, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to the judge in ascertaining the truth: at §§81-82.

67.I also draw guidance from Phipson on Evidence (20^th ed), at §45-24, which identifies common indicators of an unreliable witness. Particularly relevant here are: (a) evasive or argumentative responses; (b) speeches that avoid the question posed in cross-examination; (c) inadequate disclosure or evidentiary gaps; (d) contradictions within a witness’s own account; (e) inconsistencies with contemporaneous documents; (f) shifting narratives; (g) belated introduction of new material; and (h) statements that are inherently implausible or defy common sense.

68.What is important to underscore is the consequence of a finding that a witness has lied on a material matter. As Phipson (supra) observes at §45-21, such a finding may entitle the court to treat the witness as generally unreliable – but it does not compel the wholesale rejection of that witness’s evidence. Some lies may reflect poor judgment or an ill-conceived attempt to bolster an otherwise credible case; others may point to a fabricated narrative built on dishonesty. In cases involving fraud, the presence of deliberate falsehoods may strengthen the inference that fraudulent conduct occurred. But lies, standing alone, are not conclusive.

69.I apply these principles in the analysis that follows.

C1. Credibility of Alan (D1)

70.Alan (D1) gave evidence over the course of four days. He came across as a charming, sociable, successful, and self-assured businessman – intelligent, persuasive, and capable of rallying others to his cause. By his own account, he earned the trust of those around him, including close family members, through loyalty and personal charisma.

71.The Plaintiffs contend that Alan (D1) is prone to exaggeration and self-aggrandizement. I agree. He did not hesitate to promote his capabilities or successes, often in sweeping terms. His confidence and interpersonal fluency appear to have had tangible commercial value: he functioned as a “rainmaker”, brokering relationships and facilitating transactions. Among the various witnesses, Alan (D1) demonstrated a higher level of business acumen and strategic insight. As the evidence shows, he stood at or near the center of many of the transactions now in issue – if not their architect, then their principal driver.

72.A recurring feature of Alan (D1)’s evidence was its inconsistency with contemporaneous documentary records. One clear example arose in relation to the Uplisting Plan, which the Defendants relied on to justify REFF’s acquisition of the First Asia Stake. Alan (D1) claimed that REFF made this investment in December 2016 because the Uplisting Plan was “close to fruition”. But this assertion did not appear in his witness statement and was not borne out by the contemporaneous email trail. As late as July 2017, FAH (D12) was still grappling with basic listing requirements. In an email dated 26 June 2017, for example, FAH (D12) itself was expressing doubts about the feasibility of any uplisting, citing the low number of its freely tradable shares – 149,558 compared to the minimum threshold of 1.25 million. Alan (D1)’s evidence was further undermined by Mr Nickson Kwok (“Nickson”), FAH (D12)’s financial consultant, who confirmed at trial that he had never provided billable work in respect of any listing-related services. His account was clear and consistent, and I accept it. Alan (D1)’s account, by contrast, was untruthful.

73.Alan (D1)’s explanations were also undermined by their lack of commercial logic. Consider the Paris Sky Transaction, in which REFF purchased shares in SGOCO (D17) at US$20 per share, despite the fact that Alan (D1) himself had acquired the same shares only months earlier for under US$1. Confronted with this twentyfold discrepancy, Alan (D1) claimed the price could be justified by an “averaging up” approach. He argued that REFF’s earlier acquisition of shares in SGOCO (D17) through the HFS Transaction at US$1.14 per share should be factored into the new price, producing a weighted average of US$6.50 per share. But a rational buyer seeks to reduce its acquisition cost, not inflate it. In addition, the two transactions involved entirely different sellers – Giant Connection (D19) and Madam Lin (D6). It is unclear why the price agreed with one party should dictate the price paid to another in an arm’s-length negotiation.

74.Equally troubling was Alan (D1)’s inconsistent portrayal of his role in the decision-making processes of REFF. With respect to the Restructuring Plan, through which REFF’s real estate assets were exchanged for shares in SGOCO (D17), he at times claimed full ownership, proudly declaring it was “my plan” and asserting that he knew “everything” about it. In doing so, he invited the Court to credit his account over that of his brother, Ricky (D3). Yet when questioned on the extent of his authority over REFF and its subsidiaries, he adopted a different stance: distancing himself from key decisions and deflecting responsibility onto nominal directors. A striking example arose in relation to the HFS Transaction. In his witness statement, Alan (D1) attributed the decision to sell to Jason (D9), the then-director of Vagas Lane. Under cross-examination, however, he retreated from that position and conceded that he had arranged the transaction, thereby corroborating Jason (D9)’s evidence that the sale formed part of the broader Restructuring Plan, and that his role as director was largely titular, with Alan (D1) overseeing “the rest” of the plan.

75.A similar pattern emerged when Alan (D1) was questioned about his role in the liquidation of Worldwide. Initially, he disclaimed any involvement, asserting that he had taken no part in the winding-up process. But this unravelled once he was shown an email from Harneys seeking instructions from him. Confronted with this, Alan (D1) admitted that he had, in fact, attended a meeting with Harneys and provided directions.

76.In my judgment, these shifting accounts compel a firm conclusion: Alan (D1) was not a candid witness. His testimony appeared calculated – shaped not by a commitment to accuracy, but by a desire to advance whatever version of events he perceived best served his interests at the time. Of course, his lack of forthrightness and internal inconsistency, standing alone cannot establish that he conspired to defraud REFF, Worldwide, or their investors. Any such determination must be made in light of the totality of the evidence, a matter to which I shall return in due course. As has often been said, the Court is there to try issues and not personalities. Ultimately, findings of fact must be made having regard to the inherent probabilities and having regard to the particular issue. The Court will also have regard to the incontrovertible evidence and any internal contradiction by any of the parties on that issue.

C2. Credibility of Ricky (D2)

77.Ricky (D2), the brother of Alan (D1), played a key role in the Scheme, acting by himself and through his law firm, WKSS.

78.Though less theatrical than his brother, Ricky (D2) is plainly intelligent and well-educated. A practising solicitor in Hong Kong since 2010, he was closely involved, both legally and practically, in executing the divestment of First Asia Tower to SGOCO (D17) and advancing the broader objectives of the Restructuring Plan.

79.As a solicitor and officer of the court, Ricky (D2) is subject to exacting professional standards. One would expect his evidence to be truthful, candid, and consistent. Regrettably, it was not. On several material issues, I found his evidence evasive.

80.A particularly troubling example concerns the path of HK$125 million that REFF paid to FAH (D12) for the First Asia Stake – funds that ultimately surfaced in Ricky (D2)’s personal account. On the morning of the 9^th day of trial, he claimed that Kimmy (D2) had deposited the money in his account for him to invest on her behalf. After the lunch adjournment, his explanation changed: now asserting that the funds were part of a loan from Kimmy (D2) to Alan (D1), who in turn loaned them to him – obliging him to repay the principal and assume the investment risks. This second version contradicted not only his earlier evidence, but also his pleaded case, which pleaded a third version: the funds were directly loan from Kimmy (D2) to himself. These three incompatible versions, offered in the same proceeding, undermine his credibility on an important factual issue.

81.Similar inconsistencies arose in relation to the Paris Sky Transaction. According to his Defence, Ricky (D2) funded HK$85 million of the HK$205 million purchase price by lending that sum to his wife, Iris (D4). At trial, he reversed course, contending that the HK$85 million came from Alan (D1), who had borrowed it from Kimmy (D2). When pressed on the contradiction, he dismissed the matter as irrelevant, describing the financial arrangements as “domestic” and urging the Court to focus on substance rather than form. That answer is disappointing. As a lawyer, he would have at least a basic understanding of pleadings – particularly when delineating financial obligations. His effort to recast his role in the transaction only deepens my concerns about the honesty of his evidence.

82.I was also unimpressed by Ricky (D2)’s repeated attempts to avoid obvious conclusions or to offer explanations that strained commercial logic. Three examples illustrate the point:

(1) The sale of Paris Sky, which held the First Asia Tower, to Iris (D4), the wife of Ricky (D2), for HK$205 million, and its subsequent resale by Iris (D4) to the SGOCO group for HK$368 million, gave rise to a patent conflict of interest. The transaction involved a key REFF asset and was part of a plan devised by Alan (D1), a close family member who also arranged financing. Any competent solicitor would, under such circumstances, advise REFF to seek independent counsel for such a high-value deal. Yet when asked why REFF proceeded without separate representation, Ricky (D2) responded that all parties were aligned behind the Restructuring Plan, as if that excused the conflict. He went so far as to suggest it was unsurprising for a multi-million-dollar transaction to proceed without independent counsel for REFF.

(2) According to Ricky (D2)’s pleaded case, he provided Iris (D4) HK$85 million of the HK$205 million purchase price for the 1^st Paris Sky Agreement, with the remainder funded by a loan extended from Madam Lin (D6) to Iris (D4). Yet when it was put to him that his wife, an office worker earning HK$17,000 per month, would face monthly repayments of HK$200,000, his answers shifted. He first accepted that Iris (D4) are responsible for these payments, then claimed he would assist, but ultimately seemed to backtrack that he funded them at all.

(3) A further inconsistency arises from the purported lack of direct communication with Sudjono, a director of Giant Seychelles (D13). The Defendants have suggested that all communications relating to the Restructuring Plan with Sudjono had occurred via a work phone belonging to Jason (D9), which is now unavailable. Under cross-examination, Ricky (D2) admitted that he dealt with Sudjono in arranging the Note Portion Transaction but insisted that every exchange was routed solely through Jason (D9)’s phone, and that he had no other means of contacting her. In an age where electronic communication is both routine and easily traceable, that explanation is difficult to accept. In my judgment, it is inherently unlikely that a solicitor responsible for overseeing a major transaction would rely solely on another person’s phone, without maintaining any independent channel of contact with a director so central to the deal.

83.All in all, I find Ricky (D2) to be an unreliable witness.

C3. Credibility of Kimmy (D3)

84.Kimmy (D3) occupies a different position from that of the Sun brothers. By disposition, she appears more relational than analytical – more attuned to people than to strategy. She does not strike me as especially calculating or financially sophisticated. While she achieved obvious success in the insurance sector, her evidence at trial makes clear that she tended to be confused by the more complex instruments of financial engineering, such as trading structures, asset swaps, or capital injections.

85.Two moments from her cross-examination are revealing, underscoring the limits of her understanding of the Restructuring Plan:

(1) When asked to distinguish between management shares and participating shares, Kimmy (D2) could not do so. Pressed further on whether REFF’s cash would be distributed to those who hold the management shares or participating shares, she incorrectly responded, “management shareholders”.

(2) She professed ignorance when asked about Bloomberg, despite her own affidavit referring to one of the Restructuring Plan’s purported benefits – that AXA would be highlighted as a cornerstone investor on Bloomberg’s platform.

86.More broadly, I find that Kimmy (D3) did not fully understand many of the transactions in which she took part, or that she permitted others to acted on her behalf. Her approach was notably passive. She deferred heavily to Alan (D1), whom she trusted to manage and implement the Scheme. There is little indication that she conducted independent analysis or asked probing questions. Indeed, the Plaintiffs have also characterised her evidence as one that is “not the product of her own independent recollection”. I agree – it reflects not only her limited understanding of the transactions, but also a broader pattern, of seeking quick monetary gains from the Scheme without possessing the curiosity or discernment to evaluate precisely how those gains were to be achieved.

87.Her high degree of trust in Alan (D1) had also plainly coloured her perspective. For instance, when asked to account for how the HK$125 million paid by REFF for the First Asia Stake ended up in Ricky (D2)’s investment account, her witness statement asserted that she had loaned the funds directly to Ricky (D2). At trial, however, she reversed course, claiming instead that the funds had been loaned to Alan (D1), who then passed them on to Ricky (D2). She explained that hearing Alan’s oral evidence “reminded” her that her initial statement was incorrect. Initially, she denied speaking with Alan after he testified. When pressed, she seemed to suggest that they might have, in fact, discussed the matter – adding, “yes, because I know that I lent him money”.

88.It is unnecessary for this Court to speculate whether Kimmy (D3) changed her evidence of her own volition or under external influence. What matters is this: while she may not have been the architect of the Scheme, she is willing to reshape her narrative in ways that aligned with Alan (D1)’s interests. That tendency – her deference to (and indeed reverence of) him and readiness to revise her account – renders her evidence unreliable.

C4. Credibility of Vicki (D7)

89.As discussed earlier, Vicki (D7) assumed directorships in SGOCO (D17) and Giant Connection (D19) shortly before the Restructuring Plan was implemented. She was also appointed to lead several of REFF’s former subsidiaries – HFS Limited, Paris Sky, and FAT (D11) – once those entities had been transferred into the SGOCO group.

90.In relation to her credibility, The Plaintiffs have referred to a past HK Police suspicion that Vicki (D7) was a mistress of Alan (D1). That issue was not seriously pursued in these proceedings, and there is no credible evidence to support it. I therefore give it no weight. What does emerge from the evidence, however, is that Vicki (D7) is intelligent, composed, and capable – yet her evidence was marked by evasion and a recurring unwillingness to give forthright answers to direct questions.

91.A central issue arising at trial is whether Vicki (D7)’s appointments to senior roles in SGOCO (D17) and Giant Connection (D19) were grounded in merit or owed to her association with Alan (D1). Her explanation at trial was unconvincing. She claimed she was introduced to SGOCO’s leadership by Ms Carmen To, the CFO of FAH (D12), who in turn referred her to Mr Tony Zhong, SGOCO’s Vice President of Finance. According to her, Mr Zhong recommended her appointment to the board because of her background—having studied in the United States while remaining familiar with Hong Kong—which, she said, aligned with the company’s cross-border profile as a U.S.-listed entity operating in Asia.

92.I find this explanation unpersuasive. While Vicki (D7) did study in the United States, she was, in 2017, 28 years old with limited work experience – primarily in the insurance sector – and earning a modest salary of approximately HK$30,000 per month. It is inherently unlikely that a NASDAQ-listed company engaged in LED/LCD and green-energy businesses would appoint someone with such a background, without a relevant track record, to multiple directorships. The more likely inference is that her appointments were secured through her association with Alan (D1), not on merit.

93.That inference is further reinforced by what followed. Shortly after joining SGOCO (D17), Vicki (D7) was appointed as the sole director of Giant Connection (D19), a central player in the Restructuring Plan. She was then named sole director of HFS Limited and FAT (D11) – both holding vehicles for major REFF assets, including the Hau Fook Street Properties and First Asia Tower. At no point was there any suggestion that she had prior experience in property management or corporate restructuring. The timing, nature, and rapid succession of these appointments are difficult to reconcile with common commercial practice.

94.When asked during cross-examination whether she ever questioned the board’s decision to entrust her with such significant responsibilities, Vicki (D7) offered an odd explanation. She cited the existence of “internal controls” within the finance department, suggesting that such mechanisms mitigated any risks arising from her inexperience. That misses the point. Directors owe fiduciary duties that are personal and non-delegable. The presence of internal controls does not relieve a director of their legal obligation to act independently and in the company’s best interests. Her alleged failure to query the rationale behind her own appointment – despite her obvious lack of qualifications – does not reflect professional judgment. It is consistent with blind loyalty to Alan (D1).

95.Equally implausible, in my judgment, was Vicki (D7)’s repeated attempt to distance herself from Alan (D1) and Kimmy (D2), despite clear evidence of her close alignment with them:

(1) When asked if she was aware of Kimmy (D2)’s involvement in the HFS Transaction, she feigned ignorance, asking, “Is she one of the directors? I don’t remember now”. Vicki (D7) herself executed the share exchange agreement for the transaction, which explicitly listed Kimmy (D2) as a director of HFS Limited. Moreover, once the transaction was complete, Vicki (D7) succeeded Kimmy (D2) as the sole director of HFS Limited. It is simply unlikely that she could have forgotten Kimmy (D2)’s role in a process where she replaced her directly.

(2) When asked about Alan (D1)’s role in the Restructuring Plan, Vicki (D7) claimed she only became aware of it “in this court case”. That assertion is not borne out by the contemporaneous evidence. In a bank account application for SGOCO HK (D18) dated 5 September 2017, signed by Vicki (D7) herself, Alan (D1) is identified as the “contact person”. At that time, he was neither a shareholder nor an employee of the SGOCO group. That designation, under such circumstances, would ordinarily prompt inquiry. Her failure to raise any questions suggests a level of familiarity inconsistent with her professed ignorance.

96.Also significant is the selective nature of Vicki (D7)’s appointments within the SGOCO group. She was not appointed as a director across all subsidiaries; rather, she served solely as director of entities specifically acquired by the SGOCO group under the Restructuring Plan – namely, HFS Limited, Paris Sky, FAT (D11), and the 14^th Defendant (“FAF (D14)”) – which were closely connected to Alan (D1) and Kimmy (D2). By contrast, she was notably excluded from directorships at other subsidiaries such as Boca International Limited (“BOCA”) and Century Skyway Limited (“CSL”). These latter entities remained under the control of Mr Wai and were intended by Alan (D1) to be separated from SGOCO and transferred to Mr Wai. This deliberate delineation supports the Plaintiffs’ submission that Vicki (D7) was appointed not for her experience or independent oversight, but rather to protect the interests of Alan (D1) and Kimmy (D2) as the incoming controlling parties of the group.

97.In my judgment, the surrounding circumstances – including the timing of Vicki (D7)’s appointments, her lack of obvious qualifications commensurate with such roles, her replacement of Kimmy (D2) as director of key entities, and her efforts at trial to deny any connection to Alan (D1) or Kimmy (D2) – combine to form a compelling picture. The more probable inference is that she was installed at their direction, not based on merit or independence, but as a nominee tasked with protecting their interests and facilitating the implementation of the Restructuring Plan.

98.Before leaving this point, it is necessary to address Vicki (D7)’s repeated inability – or reluctance – to recall material facts when confronted with difficult questions. One troubling example concerns her handling of the UOB and CITIC Mortgages, which secured loans to Asia One AM (D16), an entity controlled by Kimmy (D2) and said to be unrelated to the SGOCO group. Following the Restructuring Plan, ownership of First Asia Tower and the Hau Fook Street Properties – which were previously encumbered under those mortgages – was transferred to SGOCO entities. Despite this transfer of ownership, the UOB and CITIC Mortgages were not discharged. More striking still, after the Restructuring Plan concluded, Vicki (D7) personally executed documents extending those very mortgages, thereby continuing to expose key assets to obligations incurred by a third party ostensibly outside the SGOCO group structure. When asked at trial why she had authorised the extensions, Vicki (D7)’s response was that she could not remember. I accept that the relevant events occurred back in 2017 and 2018, but that passage of time does not excuse a wholesale failure of recollection – particularly where her signature appears on documents central to the transaction, and where the financial implications were substantial. Her asserted lack of memory appears less as a lapse of time and more as a calculated refusal to engage with facts that were, on any view, inconvenient to her position.

99.In my judgment, Vicki (D7)’s evidence appeared deliberately crafted to downplay her role in the Restructuring Plan and to distance herself from Alan (D1) and Kimmy (D2) in ways that were neither plausible nor supported by the documentary evidence. I note her unwillingness to acknowledge even the most obvious points against her, coupled with her failure to account for decisions bearing her signature.

C5. Credibility of Jason (D9)

100.As alluded earlier, Jason (D9) began his career as a safety officer, foreman, and data administrator, earning HK$16,000 per month when he joined subsidiaries of FAH (D12) in 2011. He reported directly to Kimmy (D2), whom he acknowledged as his superior. By 2012, despite having no relevant academic training or professional experience, he had been installed as the sole director of both Giant HK and Giant Seychelles (D13) – entities tasked with managing a fund in excess of HK$400 million.

101.It is hard not to have a measure of sympathy for Jason (D9). The evidence suggests that he was placed in an invidious position, one of considerable legal and operational responsibility, while much of the decision-making power remained elsewhere. Although one might of course say that he could have resigned earlier on or refused to serve as a figurehead, that course may not have been practically available to someone bound by personal loyalty or hierarchical deference. Nevertheless, his uncritical compliance and willingness to endorse others’ decisions significantly undermined his credibility as a witness. His evidence was, at times, incoherent or contradictory, and frequently inconsistent with contemporaneous documents.

102.One revealing episode concerns the circumstances of his resignation from Giant Seychelles (D13) in October 2017. In his witness statement, Jason (D9) attributed his resignation solely to the birth of his second child in July 2017 and a resulting desire to reduce his workload. At trial, however, Alan (D1) introduced a new explanation: that Jason (D9) had resigned due to “pressure from the failure of the Uplisting Plan”. When it came to his turn to be questioned, Jason (D9) abruptly adopted Alan (D1)’s latest version, claiming that the collapse of the Uplisting Plan – rather than family obligations – prompted his resignation.

103.I find this latest version of his reasons for resigning not only internally inconsistent but also not borne out by the timeline:

(1) It is Jason (D9)’s own evidence that REFF sold the First Asia Stake in July 2018 in response to the Uplisting Plan’s failure and its supposed impact on FAH (D12)’s share price. If the failure of the Uplisting Plan was the trigger for the July 2018 divestment, it could not have been the basis for Jason (D9)’s resignation nine months earlier, in October 2017.

(2) In his own witness statement, Jason (D9) confirmed that the Uplisting Plan was abandoned as late as January 2018 – several months after his resignation – further contradicting the notion that the Uplisting Plan’s failure had prompted it.

(3) Jason (D9) also testified that FAH (D12)’s share price rose from US$5.00 in December 2016 to US$8.00 by December 2017. On his own account, the market was strengthening, not faltering, at the time of his resignation. This undermines his claim that the Uplisting Plan had failed by October 2017.

104.A similar issue of credibility arises with respect to the status of the Uplisting Plan at the time REFF acquired the First Asia Stake. In his witness statement, Jason (D9) made no suggestion that the Plan was near completion. It was only at trial – after Alan (D1) claimed, for the first time, that the Plan was “close to the finish line” – that Jason (D9) adjusted his evidence, testifying that the Plan was “90% complete”, based on alleged representations from Nickson, FAH (D12)’s external financial advisor.

105.That claim does not withstand scrutiny. If the Uplisting Plan were truly 90% complete, there would a paper trail to show for it: communications with regulators, formal applications to NASDAQ, and invoices from professionals engaged in uplisting-related work. None were produced. Yet the only disclosed correspondence, an email from June 2017, shows FAH (D12) still seeking basic guidance on the uplisting process. More critically, Nickson testified that he performed no meaningful work on the plain and issued no invoices. I accept his evidence. It undermines the notion that the Uplisting Plan was anywhere near completion.

106.I do not speculate as to why Jason (D9) shifted his evidence. What matters is that his shifting accounts were inconsistent, implausible, and unsupported by the contemporaneous evidence. His willingness to tailor his evidence to fit a narrative advanced by others casts serious doubt on his reliability.

C6. Credibility of Dominic Li

107.Dominic Li was appointed as a director of both SGOCO (D17) and SGOCO HK (D18) in October 2017, shortly before the Restructuring Plan was put into motion. Like Jason (D9), he appears to have been selected not for his qualifications, but for his lack of them. His inexperience made him pliable – an individual unlikely to challenge or scrutinize the decisions of those orchestrating the Scheme.

108.His performance on the stand confirmed that assessment.

109.Despite serving not only as a director but also as a member of the audit committee, Dominic Li could not identify the company’s auditor and offered only vague remarks about the committee’s responsibilities. When asked why one of SGOCO (D17)’s auditors resigned – or who replaced it – he provided no coherent answer.

110.His evidence on other substantive issues was equally unconvincing. One particularly revealing moment concerned the HFS Transaction. He acknowledged that the SGOCO (D17) board was aware REFF, through Vagas Lane, had acquired HFS Limited for HK$50 million from Alan (D1) and Kimmy (D2). Yet, he insisted that the board made no inquiry into the previous sale, claiming they were “not concerned with what happened before” and focused only on “what was happening now”.

111.The following exchange during cross-examination captures the implausibility of Dominic Li’s position:

Q: Mr Li, are you seriously suggesting that when you buy a property, you would ignore what was the transaction price of the same subject matter two years ago? A: Personally, yes, I think so.

112.With respect, that answer is hard to accept. The prior transaction –between closely related parties, involving the very same asset, and occurring only two years earlier – is plainly material. It is inherently improbable that the board of a NASDAQ-listed company would, or could responsibly, disregard such a fundamental data point. More tellingly, when pressed further, Dominic Li began to retreat from his earlier admission. He claimed he “[did] not remember” and “[could] not be sure” of the HK$50 million purchase price, despite having earlier acknowledged it.

113.Having said that, I found Dominic Li to be a more candid witness than Vicki (D7). He, on occasion, made unguarded concessions about board-level deliberations – even where those admissions ran contrary to SGOCO (D17)’s interests. Most notably, he confirmed that the board was aware of, and had discussed, Alan (D1)’s Restructuring Plan to transfer REFF’s assets into the SGOCO group. Vicki (D7), by contrast, adopted an unhelpful posture of bare denial – refusing to acknowledge any knowledge of the Restructuring Plan at all.

114.Despite my reservations of Dominic Li’s evidence, I am prepared to credit his evidence particularly if it diverges from Vicki (D7)’s or runs counter to SGOCO (D17)’s interests, but only after careful comparison against contemporaneous records and inherent probabilities.

C7. Credibility of Mr Batchelor

115.The Defendants have criticised Mr Batchelor and the JOLs regarding their conduct of this litigation and the quality of their evidence.

116.These criticisms should be understood in their proper context. The Plaintiffs, acting through the JOLs, do not claim first-hand knowledge of the events now in issue. Their case rests principally on contemporaneous documents and other forms of objective evidence. That is neither unusual nor improper. Conspiracy claims, particularly those involving opaque corporate structures and limited cooperation, are notoriously difficult to plead and prove, especially in the absence of cooperation from insiders.

117.The JOLs are officers of the Court, charged with statutory duties that include gathering information, recovering assets, and pursuing claims where there is a reasonable basis to do so. That a claim may ultimately fail does not, in itself, cast doubt on the propriety of its initiation. As will be seen, not all causes of action have succeeded against all Defendants. But that does not suggest the proceedings were improperly brought. The JOLs were entitled – and indeed to some extent obliged – to evaluate the evidentiary record and to act where they considered that wrongdoing had occurred. Decisions about which lines of inquiry to pursue or which individuals to examine must be assessed in light of practical constraints, including time, cost, and the likelihood of producing probative material. The fact that certain investigative paths were not pursued may be open to debate, but that does not render the litigation itself unreasonable.

118.In relation to specific criticism directed at Mr Batchelor’s evidence, I note that he did not present himself as a witness of fact. He gave evidence in the usual capacity of a liquidator: identifying documents, explaining how they were obtained, and setting out the rationale that informed the JOLs’ approach. Where he offered explanations or assumptions, he was candid in describing them as such. In my view, such evidence does not materially advance nor undermine the Plaintiffs’ case. It was narrative in form, procedural, and limited in scope.

119.This is not at all unusual. In complex insolvency litigation, the evidence of liquidators is seldom fertile ground for cross-examination. And this case is no exception. To the extent that his evidence is in the nature of forensic analyses or submission points that do not in themselves carry any evidential weight. I approached his evidence on that basis, and I address them further below.

D. FINDINGS ON THE SCHEME: WAS IT A FRAUD?

120.The Scheme comprises a series of transactions alleged by the Plaintiffs to have been orchestrated as part of a broader fraud.

121.In assessing whether these transactions amount to fraud, I have been guided by the common-sense proposition articulated by Lord Nicholls in Re H [1996] AC 563: the more serious the allegation, the less likely it is to be true, and so the more persuasive the evidence must be before the allegation is proved on balance of probabilities: at p.586D-F.

122.Properly read, Lord Nicholls was not laying down a rule of law, nor was he suggesting that allegations of fraud attract a heightened standard of proof. Rather, he was identifying a pattern of reasoning rooted in everyday human experience. Serious misconduct, particularly fraud, is often less common than error or incompetence, and may therefore seem less probable in day-to-day life. But that is a contextual judgment, not a doctrinal rule. If the surrounding facts suggest that dishonesty is just as likely – or even more likely – than mere mistake, the Court applies the standard of proof in the ordinary way. The seriousness of the allegation does not, by itself, justify raising the evidentiary bar.

123.This approach is consistent with that adopted by the House of Lords in Re B [2009] 1 AC 11. Lord Hoffmann made clear that there is one civil standard of proof – the balance of probabilities – and no higher standard applies just because the allegation is serious (at §§12–13).

124.Lady Hale made a similar point more vividly (at §72):

As to the seriousness of the allegation, there is no logical or necessary connection between seriousness and probability. Some seriously harmful behaviour, such as murder, is sufficiently rare to be inherently improbable in most circumstances. Even then there are circumstances, such as a body with its throat cut and no weapon to hand, where it is not at all improbable. Other seriously harmful behaviour, such as alcohol or drug abuse, is regrettably all too common and not at all improbable. Nor are serious allegations made in a vacuum. Consider the famous example of the animal seen in Regent’s Park. If it is seen outside the zoo on a stretch of greensward regularly used for walking dogs, then of course it is more likely to be a dog than a lion. If it is seen in the zoo next to the lions’ enclosure when the door is open, then it may well be more likely to be a lion than a dog.

125.This same principle was most recently and clearly restated by the UK Supreme Court in Birmingham City Council v. Jones [2024] AC 168, where Lord Lloyd-Jones JSC clarified that:

(1) It is now established that there is only one civil standard of proof: the balance of probabilities: at §51(1).

(2) The inherent improbability of a particular event is relevant; as a matter of logic and common sense, an unlikely event may require more cogent evidence to prove it occurred: at §51(2).

(3) The seriousness of the allegation, or the consequences of its being upheld, does not itself make the allegation more or less likely to be true. There is no general rule that graver allegations require more persuasive proof: at §51(3).

126.I apply these principles – as articulated in Re H (supra), clarified in Re B (supra), and reaffirmed in Birmingham City Council (supra) – in determining whether the Scheme was fraudulent.

127.In this regard, I also reject the Defendants’ case that the UK Supreme Court’s guidance that “there is no logical or necessary connection between seriousness and probability” should be rejected for being inconsistent with the legal position in Hong Kong. In my judgment, the cases they have cited, Nina Kung v Wong (2005) 8 HKFAR 387 and Re a Solicitor (2008) 11 HKCFAR 117, do not quite support this proposition.

128.In Nina Kung (supra), Ribeiro PJ addressed the applicability of Re H (supra) in the context of a forgery allegation. He noted that the seriousness of such misconduct “carries an inherent degree of improbability” and that more cogent evidence is required (at §§182–183). But his Lordship was not laying down a doctrinal rule that seriousness alone demands heightened evidentiary cogency in every case. Rather, he was acknowledging that certain kinds of serious misconduct, like forgery, are rare, and thus may naturally require stronger evidence to be believed.

129.That observation reflects a practical truth. In ordinary commercial life, forged documents are uncommon. Where a party alleges that a deed or share certificate has been fabricated, courts will naturally require evidence that reflects the inherent unlikelihood of the claim. But Ribeiro PJ was not suggesting that all serious misconduct is inherently improbable, nor that a legal threshold is altered merely by the gravity of the allegation. Again, context is paramount.

130.Consider, again for example, the dynamics of thinly traded securities markets, particularly those involving penny stocks. In such markets, limited liquidity and minimal oversight often create conditions ripe for abuse. Where a lightly traded stock experiences a sudden 300% price spike triggered by anonymous newsletters, the allegation of a pump-and-dump scheme or an insider trade – though serious – is not necessarily very improbable. In that context, it may be at least as likely, if not more so, than the suggestion that the company suddenly made a genuine breakthrough.

131.In my view, extraordinary allegations of insider trading, market manipulation, or Ponzi schemes – although mercifully rare in broader commercial practice – are not uncommon within certain contexts. Courts cannot treat them as inherently improbable just because they raise a serious allegation. On the contrary, where theoverall factual context is known to be conducive to such misconduct, a serious allegation might well turn out to be the more probable account. That allegation must, of course, still be proved – but it is to be tested against the ordinary civil standard. That, I think, is the broader point Lady Hale was making in Re B (supra). If one sees an animal in a park, it is probably a dog. But if one sees it in the lions’ enclosure with the cage door open, it may well be a lion. Context governs probability. In law, as in life, serious allegations must be tested against the surrounding context – not dismissed because of their gravity, nor assumed to be improbable merely because they carry serious consequences.

132.As for Re a Solicitor (supra), I do not consider that it materially alters the analysis. At §113, Bokhary PJ was simply applying the principle in Re H (supra) to the context of professional disciplinary proceedings in Hong Kong. He did not suggest that there exists any rigid link between the seriousness of an allegation and the likelihood of its truth.

133.To the contrary, at §112, his Lordship emphasised that:

“[The] standard of proof in disciplinary proceedings must be clear and, at the same time, capable of accommodating the variety of circumstances in which it has to be applied from case to case …. .”

134.That language confirms the overarching principle: context is paramount. Bokhary PJ’s formulation – that the standard of proof must be capable of adjusting to the facts – underscores that the need for more compelling evidence is driven not by the seriousness of the allegation in the abstract, but by the improbability of the conduct in the circumstances. But if there is in any meaningful divergence between the tests as propounded by the parties (which I doubt in truth there is), this would be of no moment on the facts of this case and hence would not make any difference as the result of my analysis and conclusions would be the same.

D1. First Asia Transaction

135.The Plaintiffs allege that REFF’s subscription for the First Asia Stake at US$2.50 per share was not a bona fide investment, but a deliberate overpayment engineered by Giant HK – acting through its then sole director, Jason (D9) – at the direction of Masterminds. On their case, this transaction was one component of a broader Scheme to strip REFF of value and divert its assets to the Masterminds and their associates.

136.The Defendants deny any impropriety. They contend that REFF’s investment in FAH (D12) was justified by reference to a proposed Uplisting Plan – an initiative that, if successful, would see FAH (D12) listed on a prominent exchange such as NASDAQ, with a projected valuation of at least US$4.00 per share. While they accept that the uplisting never materialised, they say that the plan was abandoned only in 2017, after a campaign of disruption by a “problematic shareholder”, Tsoi, who filed complaints with the U.S. Securities and Exchange Commission (“SEC”) and posted what they describe as “defamatory comments” online.

137.For the reasons that follow, I am persuaded that the First Asia Transaction was not undertaken for any genuine or otherwise legitimate commercial purpose. Rather, it was intentionally structured by the Masterminds to secure an inflated payment from REFF to FAH (D12), in furtherance of the Scheme designed to enrich those directing it.

D1.1. The Uplisting Plan was not seriously pursued by late 2016.

138.I begin with the Defendants’ key defence: the Uplisting Plan.

139.While I accept it is possible that such a plan might have been genuinely contemplated by the Defendants at an earlier stage, I do not believe it remained a realistic or genuinely pursued objective by December 2016, when REFF entered into the First Asia Transaction because:

(1) The evidence is devoid of any indication that meaningful steps were taken to advance the plan by late 2016. Had the uplisting been seriously contemplated, one would reasonably expect to find evidence of planning or progress: budget allocations, instructions to U.S. counsel, audit schedules, or board-level resolutions. No such documentation was presented.

(2) FAH (D12) ceased publication of its financial statements after the second quarter of 2016. If the company genuinely anticipated an uplisting, one would expect consistent financial disclosure. The failure to maintain even this basic level of financial reporting sits uneasily with Alan (D1)’s claim that FAH (D12) was “very close to the finish line”.

(3) The evidence of Nickson, an external financial advisor engaged by FAH (D12), reinforces this. Over the course of a three-year engagement, he neither signed an engagement letter nor carried out any substantive work relating to the uplisting. Nor did he issue any invoices relating to the plan.

140.The handful of emails from a depositary agent in mid-2017, relied on by the Defendants, do not establish a coordinated effort to pursue uplisting. Rather, they reveal an absence of strategic direction. Nearly four years after the plan was allegedly conceived, FAH (D12) was still inquiring about basic listing procedures, including whether “moving upward to Nasdaq” was possible. That kind of elementary inquiry is inconsistent with any serious claim that the uplisting was near completion.

141.There is also a fundamental problem at the heart of the Defendants’ case. If, as they claim, the Uplisting Plan was “very near” completion in December 2016, it is difficult to reconcile that assertion with REFF’s subsequent decision to dispose of the First Asia Stake less than two years later, in July 2018, during the Note Portion Transaction, for around HK$45.8 million. It will be recalled that the latter sale price represents barely a third of the HK$125 million that REFF had paid in the First Asia Transaction. If FAH (D12)’s uplisting was indeed on the verge of execution in late 2016, it is not easy to explain why, in under 24 months, the plan disintegrated so completely, and the share price collapsed by over 60%. Such a steep devaluation suggests one of two possibilities. Either there was an external shock in 2017 that rendered the uplisting abruptly unviable, forcing REFF to realise a substantial loss, or the transaction’s original valuation was never commercially defensible in the first place.

142.In response, the Defendants point to the alleged disruptive conduct of Tsoi – a disgruntled shareholder who, along with Shanty, had previously sold FAT (D11) to Kimmy (D2) – as the event that supposedly derailed the Uplisting Plan. I find that explanation not credible:

(1) Tsoi’s campaign began in 2011 and culminated in litigation in 2015, well before the alleged Uplisting Plan gathered momentum. If her conduct posed a genuine threat to the plan, one would expect that threat to have materialised at an earlier stage.

(2) There is no credible evidence of any triggering event in 2017 that caused the plan to collapse. The Defendants made vague references to a possible SEC complaint by Tsoi in that period, but provided no contemporaneous correspondence, no email trail, and no record of any resulting regulatory investigation.

(3) Nickson, the external adviser engaged to assist with the plan, offered no support for the Defendants’ theory. When asked whether the plan was abandoned due to Tsoi’s actions, his reply was clear: “To my recollection, that was not the case”.

143.In short, I do not accept that Tsoi’s conduct in 2017 was the catalyst for the failure of a genuine Uplisting Plan. There was nothing sudden, surprising, or materially new about her conduct at that time. If the Plan was, as the Defendants contend, on the verge of completion in December 2016, it is implausible that it could be derailed by a shareholder campaign that had long since run its course. As a matter of inherent probabilities, the far more credible explanation is that there was no plan to derail, because no viable plan was on track by late 2016. Or, if such a plan had once existed, it had long since stalled. The Defendants’ version of events is unsupported by contemporaneous documentation, inconsistent with commercial logic, and undermined by their own subsequent conduct.

144.I have also considered the Defendants’ eleventh-hour suggestion, introduced by Alan (D1) during cross-examination, that the execution of a reverse share split in November 2016 corroborates the existence of a genuine Uplisting Plan. That argument does not withstand scrutiny. While a reverse split may be one of several steps taken to satisfy NASDAQ listing requirements, it does not, in itself, establish that uplisting was actively underway. Aside from passing references in the witness statements of Alan (D1) and Kimmy (D2), there is no contemporaneous documentation linking the share split to any uplisting plan.

145.Moreover, as Kimmy (D2) acknowledged in evidence, NASDAQ requires a minimum post-split bid price of US$4.00 per share. If the share split had truly been undertaken with that target in mind, one would have expect the post-split share price to approach somewhere close to that threshold. It did not. That outcome further undermines the Defendants’ assertion that the reverse split was motivated by a genuine effort to uplist FAH (D12). The more probable explanation is that the alleged connection between the share split and uplisting was a convenient afterthought – raised in hindsight.

D1.2. The First Asia Transaction was a fraudulent transaction pursued contrary to the interests of REFF and its investors.

146.Once the Uplisting Plan is set aside, the rationale for REFF’s subscription of the First Asia Stake collapses. It becomes highly improbable – indeed, commercially implausible – that REFF acquired those shares with any genuine intention of profiting from a prospective uplisting. On the evidence, I find that REFF’s investment in FAH (D12) at US$2.50 per share was not made as a result of a bona fide commercial judgment, but a transaction orchestrated to serve the interests of the Masterminds.

147.First, the subscription price of US$2.50 was selected based on a single-day trade of just 100 shares, executed on 21 December 2016. By contrast, REFF was subscribing for over 6.4 million shares – i.e., 64,000 times that volume. In a thinly traded over-the-counter market, it is inconsistent with commercial logic for REFF to treat a lone day’s price, based on negligible turnover, as the benchmark for a multi-million-dollar transaction. No negotiation was attempted. No valuation was commissioned. No diligence was undertaken. The US$2.50 price was accepted wholesale.

148.The surrounding circumstances only reinforce the commercial implausibility of REFF’s valuation of the First Asia Stake:

(1) In the months leading up to the First Asia Transaction, FAH (D12)’s stock had traded at around the level of US$0.40 in October and November 2016, rising only to US$1.27 in early December. The jump to US$2.50, effectively a doubling of the most recent trading price, ought to have prompted serious question. Yet there is no evidence that any was made.

(2) Jason (D9)’s own evidence is telling. He testified that the investment decision had been made a week prior to 22 December, when the shares were trading closer to US$1.27. Yet, following a 100-share trade on the eve of the transaction, REFF accepted US$2.50 without question. I am unable to find any reasonable explanation for why REFF would voluntarily pay over twice what it had been prepared to accept just days earlier.

(3) Under cross-examination, Alan (D1), Kimmy (D2), and Jason (D9) admitted that FAH (D12)’s shares were highly illiquid and prone to volatility. They were aware that the last traded price could not reliably reflect the stock’s intrinsic value. And yet, they proceeded to fix the subscription price based on that very benchmark – drawn from a single 100-share trade.

149.The ultimate outcome of REFF’s investment further underscores the artificial nature of the First Asia Transaction. By the time REFF liquidated its stake in July 2018, the shares fetched only HK$45.8 million, equivalent to around US$0.92 per share, representing a significant loss exceeding 60%. Yet the Defendants have identified no plausible external factor between December 2016 and July 2018 – aside from their rejected theory of interference by Tsoi – that could justify such a significant decline. The far more compelling inference, supported by the weight of the evidence, is that the shares were not genuinely worth US$2.50 per share. Rather, REFF was deliberately induced into acquiring them at an artificially inflated, wholly unjustifiable price from the outset.

150.Second, I find that Jason (D9), acting as the sole director of Giant HK – the holder of REFF’s management share – exercised no independent judgment, conducted no meaningful due diligence, and made no effort to negotiate the subscription price of US$2.50. On the evidence, that figure was dictated to him at the direction of the Masterminds.

151.The picture that emerged from Jason (D9)’s cross-examination is clear. He lacked the qualifications to evaluate a transaction of this magnitude, and even if he had possessed the relevant information, it is doubtful he could have appreciated its commercial implications. Several aspects of his evidence illustrate the point:

(1) Jason (D9) admitted that he owed his appointment at Giant HK, and later Giant Seychelles (D13), to Kimmy (D2), and acknowledged that from 2012 to 2017, he reported to her.

(2) On the viability of the Uplisting Plan, Jason (D9) testified that he relied entirely on what he had been told by Alan (D1), Kimmy (D2), and Nickson. He had no background in corporate finance and no experience with listed-company transactions. The First Asia Transaction was his first involvement in a public company acquisition. Indeed, he could not identify any concrete steps he took to assess whether the proposed subscription was in REFF’s best interests. When pressed on this issue, his answers were vague and evasive.

(3) Jason (D9) admitted that he merely “took a glance” at publicly available materials relating to FAH (D12), and professed ignorance as to the fact that Alan (D1) had become a substantial shareholder in the company – an omission that would be surprising even for a less than diligent director.

152.Although Jason (D9) claimed that the decision to invest in FAH (D12) was his alone, I do not find that evidence credible. His account was riddled with contradictions. At one point, he claimed that the idea to subscribe originated in November 2016. When confronted with documentary evidence showing that the Worldwide PPM had already been amended in August 2016 to allow for such a subscription, he abruptly changed tack, claiming the idea had arisen “definitely before” August 2016. His account also conflicted with Alan (D1)’s version of events, which was that the subscription had been under consideration since 2013 as part of an effort to enhance FAH (D12)’s public profile by listing AXA as a cornerstone investor. In the end, it was Ricky (D3) who implemented the amendment to the PPM – further confirming that Jason (D9) played no meaningful role in shaping the First Asia Transaction.

153.The overall impression left by Jason (D9)’s evidence is that he was – in reality – simply taking instructions from Alan (D1) and Kimmy (D2). He did not exercise independent judgment, and he displayed no discernible concern for REFF’s fiduciary obligations to its investors. His role was, in substance, to endorse a decision already made. His conduct could fairly be described as: “I did what Kimmy (D2) told me, regardless of the consequences—REFF’s interests were not my concern”. Stepping back, that posture is, on the evidence, unsurprising. Jason (D9)’s position at Giant HK and Giant Seychelles (D13) was entirely dependent on Kimmy (D2)’s patronage. Before joining the First Asia group, he had worked as a foreman and safety officer in a construction company, earning approximately HK$144,000 annually. By mid-2017, he found himself nominally responsible for managing a fund worth over HK$400 million—at more than double his prior salary. It is difficult to avoid the conclusion that his elevation to such a role was not as a result of merit, but loyalty.

154.Third, the First Asia Transaction bears the hallmarks of a transaction not grounded in commercial reality. In a deal of this scale, approximately HK$125 million, one would have expected REFF, acting properly, to seek independent legal and financial advice, especially given the obvious and serious conflict of interest. REFF owed its investors a duty to negotiate the most favourable terms. FAH (D12), by contrast – controlled by Kimmy (D2), to whom REFF’s nominal decision-maker, Jason (D9), reported – had every incentive to inflate the price. That tension becomes even more pronounced when one considers that Alan (D1) and Kimmy (D2), who stood to gain most from any inflated subscription price, collectively held approximately 40.5% of FAH (D12)’s shares at the time.

155.Despite this glaring tension, REFF neither engaged separate legal representation nor consulted an external financial adviser. Instead, as Jason (D9) conceded, he turned to the very same person – Kimmy (D2) – who stood to gain if the subscription price were raised. At trial, Jason (D9) even confirmed that REFF adopted the previous day’s market price simply because Kimmy (D2) “told me that to use the market price would be fair to everyone, and at that time we would not think of a better way”.

156.Fourth, even if I were to assume, contrary to my findings, that the Uplisting Plan remained under active pursuit as of December 2016, I still cannot accept the Defendants’ point that Giant HK, acting through Jason (D9), was entitled to approve any subscription price below the aspirational uplisting target of US$4.00 per share.

(1) Even the most seriously pursued uplisting offers no guarantee of success. Any rational investor – particularly an investment fund managing others’ funds – would factor in a discount to account for the inherent risk that the uplisting might not materialise. To adopt US$4.00 as a benchmark without any discount for execution risk is not realistic.

(2) Giant HK, as REFF’s sole director, was under a fiduciary obligation to secure the best available terms for REFF. Accepting any price below US$4.00—much less US$2.50—without so much as seeking a discount or valuation exercise from FAH (D12) runs counter to that duty. It is difficult to imagine any competent fiduciary agreeing to such terms without robust justification. Jason (D9) did not provide one.

157.Fifth, I agree with the Plaintiffs that the path taken by the subscription proceeds from the First Asia Transaction was not merely unusual – it was suspect. It is not in dispute that the HK$125 million paid by REFF never entered FAH (D12)’s corporate accounts. Instead, the funds were diverted to First Asia Capital, a private company owned by Kimmy (D2). From there, the entire sum was transferred to Kimmy (D2) personally, who, in turn, passed it to Ricky (D3). Within days, he deposited the HK$125 million into his personal futures trading account.

158.From any commercial perspective, this sequence of transfers is anomalous. It is difficult to conceive of a legitimate capital-raising arrangement where newly subscribed funds bypass the company for which they were ostensibly intended – routed instead through a private vehicle owned by a major shareholder and ultimately ending up in a related party’s personal brokerage account. That structure is not consistent with prudent financial management or governance. But it is consistent with an orchestrated diversion of funds – designed to prioritise private gain over REFF’s interests.

159.Although the Defendants have offered various explanations to justify how the HK$125 million came to rest in Ricky (D3)’s personal account, their efforts have only deepened concern. The inconsistencies in their evidence were not minor misstatements but material contradictions:

(1) In her witness statement, Kimmy (D2) claimed that First Asia Capital acted merely as FAH (D12)’s agent, accepting funds on its behalf because FAH (D12) lacked a Hong Kong bank account. She maintained that Ricky (D3) was also investing the funds as FAH (D12)’s agent, such that any profits would accrue to the company. But that version was later disavowed by Kimmy (D2) in oral evidence. She claimed that the HK$125 million reached Ricky (D3) through a chain of “on-demand loans”: FAH (D12) loaned the money to her; she then on-lent it to Alan (D1); and he, in turn, loaned it to Ricky (D3). This version converted the company’s status as one of beneficial ownership of the funds to one of a creditor.

(2) Though Kimmy (D2) sought to downplay this glaring shift as a mere “omission”, it was a direct contradiction. The “agent” version and the “loan” version cannot both be true. Under the latter, Ricky (D3) was not acting for FAH (D12)’s benefit at all, but rather as a borrower entitled to use the HK$125 million proceeds – and retain any gains – for his own benefit.

(3) Ricky (D3)’s testimony was also inconsistent. In the morning when he gave evidence, Ricky (D3) initially claimed that the funds were placed in his account by Kimmy (D2) so that she could invest them through him – consistent with her earlier “agency” thesis. And when asked whether this arrangement was a loan, he flatly denied it. But following the lunch adjournment, Ricky (D3) reversed course, now asserting that there had been a chain of loans involving Kimmy (D2), Alan (D1), and himself. He acknowledged this reversal but offered no explanation for the discrepancy.

160.It is not the Court’s task to speculate as to why these accounts shifted so abruptly. What matters is that the evidence of both Kimmy (D2) and Ricky (D3) on this critical issue was contradictory, unsupported by documentation, and ultimately unconvincing. Their credibility has been significantly diminished. Even taking the “loan” version at face value, the ultimate beneficiaries of the HK$125 million were not FAH (D12) or its shareholders, but Kimmy (D2) and Ricky (D3), who used the funds for personal investment purposes. That fact further calls into serious question the legitimacy of the First Asia Transaction.

161.In sum, the path by which REFF’s subscription funds were channelled – through a private entity owned by a controlling shareholder and into a related party’s personal trading account – combined with the Defendants’ shifting and irreconcilable explanations, strongly supports the Plaintiffs’ case. The First Asia Transaction was not a genuine investment executed for the benefit of REFF or FAH (D12). It was a transaction designed to enrich those controlling it, at the direct expense of the fund.

162.For completeness, I note the Defendants have raised a number of ancillary points and forensic arguments to justify the First Asia Transaction. While exhaustive treatment of every point is neither required nor proportionate, I shall briefly address the more significant of these point

(1) The Defendants claim that the Plaintiffs’ claim must fail due to the absence of expert valuation evidence demonstrating the true value of the First Asia Stake in December 2016. But this misses point. The question here is not the precise market valuation of the First Asia Stake – whether US$1.50, US$2.00, or another figure entirely, but rather, whether the price actually paid, US$2.50 per share, was defensible under the circumstances prevailing at that time. On the evidence presented, it plainly was not. The lack of an exact, retrospective valuation does not mean there was therefore an unjustifiable overpayment. Moreover, I also accept the explanation by the JOLs, that producing a retrospective valuation was impractical due to elapsed time and doubts surrounding the reliability of FAH (D12)’s financial records.

(2) The Defendants further argue that the trading history after December 2016, showing monthly closing prices above US$2.50 on numerous occasions through July 2018, retrospectively validates REFF’s purchase as commercially sound. I am unable to accept this. The mere appearance of higher prices in subsequent months, without evidence of meaningful trading volume, does not support the assertion that REFF could have liquidated its substantial 6.4 million-share stake at such inflated levels. The vast difference between a modest, isolated transaction of a few shares and the sale of millions of shares in an illiquid market, is obvious. Paying US$500 for 100 shares might be acceptable, whereas investing US$32.5 million for over 6 million shares in similarly thin market conditions is fundamentally different.

(3) The Defendants next contend that reliance upon the previous day’s closing price as the subscription benchmark was consistent with FAH (D12)’s purported past practice. I reject this submission. There is no contemporaneous evidence to support this – instead, this so-called past practice emerged for the first time, conspicuously late, during cross-examination of Alan (D1) and Jason (D3). Had this been an established corporate practice genuinely relied upon at the relevant time; the Defendants would have asserted it immediately when challenged on the US$2.50 price. And even if FAH (D12) had previously resorted to single-day closing prices in informal friends-and-family arrangements, extending that approach uncritically to a multi-million-dollar transaction involving professional investors, such as AXA’s policyholders, defies prudence and common sense. In a thin, illiquid market, casual reliance on an isolated trade might pose limited risks for minor allotments; but when large-scale investments are at stake, adherence to such purported past practice becomes not merely reckless, but indefensible. Any such practice would, in any event, depend on the context and size of the investment.

D1.3. The Defendants’ involvement in the First Asia Transaction.

163.For the reasons below, I find that Alan (D1), Kimmy (D2), Ricky (D3), Jason (D9), and FAH (D12) each played substantial roles in the First Asia Transaction, fully aware – or at a minimum strongly suspecting – that REFF’s subscription to the First Asia Stake was deliberately overpriced and thus contrary to the fund’s best interests. By contrast, the evidence does sufficiently not support a similar finding against any other Defendant, whose involvement in this transaction was, at most, negligible.

(a) Alan (D1)

164.Alan’s (D1) role in the First Asia Transaction was instrumental. He conceived the transaction as early as 2011 or 2013, personally discussed its terms with Jason (D9), who was then director of Giant HK, and ultimately oversaw the movement of REFF’s HK$125 million subscription through various bank accounts under his direct control.

165.I am also satisfied on the evidence that Alan (D1) fully understood the transaction was not in REFF’s interests but was instead designed to facilitate an inflated purchase, thereby diverting REFF’s assets:

(1) At trial, Alan (D1) acknowledged that the subscription price of US$2.50 per share was based solely upon a single day's trade involving only 100 shares. He proceeded despite knowing that FAH (D12)’s shares were thinly traded, illiquid, and therefore, that the result of a single day’s trade of 100 shares was unsuitable for establishing a fair market valuation.

(2) Alan (D1) admitted that he was the architect behind the Uplisting Plan, which purportedly justified the share price appreciation anticipated from the First Asia Stake purchase. Given my earlier finding that the Uplisting Plan was not genuinely pursued by FAH (D12) by December 2016, Alan (D1) must have been aware that the plan was neither viable nor genuinely motivating the transaction. He knew that acquiring shares at US$2.50 offered no legitimate commercial benefit to REFF.

(3) Alan (D1) was the driving force behind the First Asia Transaction. Though the Defendants attempted to paint the decision as one independently made by Jason (D9), I reject this. The evidence demonstrates clearly that Jason (D9) did not exercise independent judgment or meaningful oversight but relied entirely on the direction from Alan (D1), who had responsibility for implementing the transaction delegated to him by Kimmy (D2). In these circumstances, I find that Alan (D1) was fully involved in all aspects of this transaction – right down to the pricing of the stake. I specifically reject both the suggestion that Alan (D1) was unaware of the significantly lower trading range of FAH (D12)’s shares, between US$1.27 and US$1.51m in the weeks preceding the transaction and the suggestion that Alan (D1) was not involved in the determination of the eventual sale price of US2.50 apiece.

166.It is also significant, as Plaintiffs have pointed out, that Alan (D1) knew the principal beneficiaries of the First Asia Transaction were Kimmy (D2) and his brother Ricky (D3). Indeed, he admitted under cross-examination that he was fully aware that the HK$125 million ultimately flowed through Kimmy (D2)’s accounts before reaching Ricky (D3), where the funds were deployed in futures trading. Given his awareness that the First Asia Stake was substantially overpriced and knowledge that the primary beneficiaries were his brother and close business partner, Alan (D1) plainly appreciated that the transaction operated as a fraud on REFF.

(b) Kimmy (D2)

167.Kimmy (D2) was involved in the First Asia Transaction. As CEO of FAH (D12), she approved REFF’s acquisition of the First Asia Stake and admitted at trial that she discussed key aspects of the transaction with Alan (D1) over a period of two or three days. REFF’s HK$125 million subscription payment passed first through Kimmy (D2)’s personal bank accounts before being transferred onward to Ricky (D3).

168.I am equally satisfied that Kimmy (D2) knew the First Asia Transaction was executed at an inflated price, resulting in the improper diversion of REFF’s assets. Given her position as CEO of FAH (D12), it is implausible that she did not play a meaningful role in determining the subscription price of the First Asia Stake. Indeed, Jason (D9) specifically testified that Kimmy (D2) herself instructed him to rely upon the single-day trading price as the basis for pricing the shares, purportedly “to be fair to everyone”. Furthermore, given Kimmy (D2)’s close partnership with Alan (D1), the acknowledged architect of the Uplisting Plan, it is not credible that she was unaware that by December 2016 the plan had ceased to be a realistic prospect. Consequently, she knew that subscribing to shares at the inflated price of US$2.50 offered no legitimate expectation of future commercial benefit to REFF.

(c) Ricky (D3)

169.As for Ricky (D3), the evidence also establishes that he was integrally involved in the First Asia Transaction. As director of Worldwide, he was directly involved in amending its PPM – an essential step enabling REFF to invest in both “listed and unlisted equities,” including the First Asia Stake. Most significantly, the HK$125 million REFF ultimately paid for that stake was deposited directly into Ricky (D3)’s personal bank account, purportedly for him to facilitate his futures investment.

170.Nor do I doubt that Ricky (D3) was aware that the First Asia Transaction was detrimental to REFF’s interests. During cross-examination, Ricky (D3) initially admitted – and later sought unsuccessfully to retract – that he requested a loan of precisely HK$125 million from Alan (D1), exactly matching REFF’s subscription payment. In my judgment, it defies common sense to accept that Ricky (D3) was unaware Alan (D1) intended to secure the exact sum from REFF through the First Asia Transaction. The more logical inference is that Alan (D1) and Kimmy (D2) informed him of their plan to use REFF’s subscription at an inflated valuation, with the proceeds channelled to Ricky (D3).

171.Although Ricky (D3) denies knowledge of the inflated subscription price, I do not find this denial credible. As the direct beneficiary and a key facilitator of the transaction, Ricky (D3) stood to receive substantial personal benefit from REFF’s payment. In these circumstances, it is not believable that he did not know why or how the HK$125 million flowed from REFF’s assets into his personal accounts.

(d) Iris (D4)

172.In contrast, there is no cogent evidence that Iris (D4) played any meaningful role in the First Asia Transaction. Her involvement in the broader Scheme is solely in relation to the subsequent Paris Sky Transaction. The Plaintiffs have not identified any direct connection between Iris (D4) and REFF’s June 2016 subscription to the First Asia Stake, which preceded the Paris Sky Transaction by nearly two years.

173.Although the Plaintiffs argue that a portion of the subscription proceeds for the First Asia Stake reached Iris (D4) through her husband, Ricky (D3), to finance her acquisition of Paris Sky, I do not accept this:

(1) The evidence of the funds flow is inconclusive. At best, it shows that Ricky (D3) transferred HK$22 million to Iris (D4) on 25 April 2018. But this alone does not establish that these specific funds originated from the First Asia Transaction in December 2016. Given the nearly two-year gap between the two transactions, it is entirely plausible that the funds had been commingled, obscuring any link to REFF’s subscription.

(2) Even assuming some of the subscription proceeds eventually reached her, the evidence does not establish that Iris (D4) knew the origin of these funds. It is more likely, on the available facts, that Iris (D4) simply trusted her husband to arrange financing without inquiring into the source of the funds. I thus conclude she did not know that proceeds from the First Asia Transaction funded her purchase of Paris Sky.

174.In this regard, I also decline to draw adverse inferences from Iris (D4)’s decision not to testify at trial. Consistent with the principle articulated in China NPL v. Mo Haidan [2021] 1 HKLRD 344, adverse inferences may not be drawn unless the Plaintiffs have presented affirmative evidence warranting such an inference. Here, no such affirmative evidence has been offered. Iris (D4)’s absence thus cannot independently support the conclusion that she knowingly participated in – or understood – the implications of the First Asia Transaction.

(e) Clara (D5)

175.I likewise do not find that Clara (D5) was involved in the First Asia Transaction. The Plaintiffs rely primarily on the fact that she served as a director of Worldwide when amendments to its PPM were made, which facilitated the First Asia Transaction and that some portion of the subscription proceeds passed through bank accounts under her control.

176.In my judgment, Clara (D5)’s position is not dissimilar to Iris (D4) in that both were married to the Sun brothers and likely placed their complete trust in their husbands' judgment without independently assessing or fully understanding the transactions in which they were nominally involved. This is particularly true with regard to Alan (D1), who, as I have previously observed, possessed significant influence and could readily command loyalty from those close to him.

177.Against this context, I do not find either of the points cited by the Plaintiffs is enough to tie Clara (D5) to the transaction or to find that she knew the First Asia Transaction was detrimental to REFF’s interests:

(1) Merely holding a directorship in Worldwide is not sufficient evidence of her involvement in the transaction. Worldwide itself was not a direct participant in the First Asia Transaction; its role was limited to amending the PPM, which enabled REFF’s investment. There is no evidence proving Clara (D5) participated in, or had knowledge of, that amendment process.

(2) Nor does the directorship itself imply she had knowledge of the transaction's specifics. It is, in my view, far more plausible Alan (D1), appointed her as a nominee director without involving her substantively. There is no indication she knew the transaction was overpriced, or that she understood the subscription proceeds were deposited into Kimmy’s (D2) account before ultimately being transferred to Ricky (D3).

(3) The movement of funds through accounts bearing Clara’s (D5) name does not, without more, demonstrate her knowledge or involvement. Unlike Kimmy (D2) and Ricky (D3), who actively managed and benefited from these funds, Clara (D5) derived no identifiable personal benefit. What is more likely is that Clara (D5) simply deferred entirely to her husband’s decisions concerning these transfers, without independently investigating or appreciating their nature or purpose.

(f) Madam Lin (D6)

178.Similarly, the evidence does not tie Madam Lin (D6) to the First Asia Transaction. Although the Plaintiffs point out that portions of the subscription proceeds passed through accounts apparently controlled by Madam Lin (D6), this alone is insufficient. She derived no demonstrable personal benefit from these funds. More likely, given the family relationship, she deferred entirely to her son-in-law, Alan (D1), regarding financial matters without independently verifying the details or purposes of the transactions. Like Iris (D4), Madam Lin’s (D6) documented involvement commenced only with the Note Portion Transaction, around two years after the First Asia Transaction. For the same reasons, I decline to draw adverse inferences from her decision not to testify at trial.

(g) Elvis (D8)

179.So far as Elvis (D8) is concerned, I am prepared to accept that he played some role in the First Asia Transaction given that he was a director and CFO of FAH (D12). That said, I am not prepared to go so far and find that he knew the transaction was contrary to REFF’s interests:

(1) Though Kimmy (D2) testified that Elvis (D8), acting for FAH (D12), engaged in negotiations with Jason (D9) (representing REFF), it is clear from the evidence that the terms of the subscription was dictated by Kimmy (D2) and Alan (D1).

(2) There is no indication that Elvis (D8) exercised independent judgment or recognised that REFF was overpaying for the shares. Nor is there evidence that Elvis (D8) knew of the Uplisting Plan or that REFF’s investment was intended to capitalise on FAH (D12)’s share-price appreciation.

180.It is more likely that Elvis (D8) carried out the instructions given to him by Alan (D1) and Kimmy (D2), without independently questioning the transaction’s terms or their potential implications for REFF. In short, while Elvis’s (D8) passive acceptance of instructions may raise concerns about his diligence, it does not establish dishonesty or knowing complicity in harming REFF’s interests.

(h) Jason (D9)

181.Jason’s (D9) involvement in the First Asia Transaction is plain. As sole director of Giant HK, which served as REFF’s sole director, it was Jason (D9) who approved REFF’s acquisition of the First Asia Stake.

182.Less immediately apparent is whether Jason (D9) approved this transaction knowing it would harm REFF’s interests. The evidence indicates that Jason (D9), much like Elvis (D8), was likely appointed by Kimmy (D2) as a nominee to promote the interests of Kimmy (D2) and Alan (D1). Yet, beyond this similarity, I consider that Jason (D9) was likely kept apprised of the intent of the transaction to a far greater extent:

(1) Jason (D9) testified that he believed the Uplisting Plan was “90% complete”, purportedly based upon due diligence and online inquiries he claimed to have conducted. I have found this representation false. By December 2016, no meaningful steps toward an uplisting had been undertaken, and Jason (D9), had he performed the investigations claimed, would necessarily have known this. His misleading evidence strongly indicates that he deliberately sought to justify a transaction lacking genuine commercial merit.

(2) Jason (D9) admitted during cross-examination that, at the time he negotiated the subscription price with Kimmy (D2), he knew FAH (D12)’s shares had recently traded at approximately US$1.27. Had REFF acquired shares at that price, its HK$125 million would have secured roughly 30% of FAH (D12). Nevertheless, on the transaction’s closing date, the subscription price doubled overnight to US$2.50 based on a single, isolated trade of only 100 shares, reducing REFF’s stake to approximately 16.6%. Despite recognising this abrupt price increase, and the conflict of interest between Kimmy (D2) and REFF, Jason (D9) proceeded without objection.

(3) Jason (D9) acknowledged awareness of FAH’s thin trading volume. Thus, he must have understood that the 21 December 2016 closing price, derived from a single 100-share trade, did not represent a fair or reliable valuation. His prior knowledge that FAH (D12)’s shares had traded for approximately half that amount mere weeks earlier further underscores that he was aware REFF was substantially overpaying for the stake.

183.What is also significant is that, unlike Elvis (D8), Jason (D9) has not shied away from claiming responsibility for the First Asia Transaction. In his witness statement, Jason (D9) explicitly stated that he caused REFF to subscribe to the First Asia Stake based on the Uplisting Plan and FAH (D12)’s purportedly promising performance trajectory. He reinforced this position during cross-examination, asserting unequivocally that the decision was his own. given the extent of his involvement, and the specificity of his admissions, it is not credible for Jason (D9) to claim ignorance of the transaction’s material terms or their effect on REFF.

(i) Bruce (D10) and Asia One AM (D16)

184.I find no sufficient evidence linking Bruce (D10) or Asia One AM (D16), of which he is CEO and director, to the First Asia Transaction. The Plaintiffs’ case rests on the assertion that some of the subscription proceeds for the First Asia Stake passed through bank accounts held by Asia One AM (D16). I do not accept that this establishes their involvement. The fund flow evidence is limited and inconclusive. The only identified transfer is a HK$15 million payment from Asia One AM (D16) to Ricky (D3) on 22 August 2016 – nearly two years after the First Asia Transaction. That timing weakens any inference that this transfer related to the transaction in question. Accordingly, I do not find that either Bruce (D10) or Asia One AM (D16) participated in the First Asia Transaction.

185.Even if I am incorrect as to the extent of their involvement, I am not persuaded that either Bruce (D10) or Asia One AM (D16) knew the transaction was contrary to REFF’s interests. Their involvement, if any, appears to have been limited to facilitating a payment. Such conduct is akin to an administrative act in nature and, without more, does not support a finding of participation in misconduct. The impropriety of the First Asia Transaction lay in the overpayment for the shares, not in the mechanical act of payment. There is no sufficient evidence that either party was aware the shares were overpriced or that the transaction was otherwise detrimental to REFF.

(j) FAH (D12)

186.FAH (D12), by contrast, was directly involved in the First Asia Transaction. As the entity that issued the First Asia Stake to REFF, it participated in determining the subscription price. I accept the Plaintiffs’ submission that the knowledge of Kimmy (D2), who acted as FAH (D12)’s director and CEO (and is consequently its directing mind and will), is attributable to the company. That knowledge includes her awareness that the subscription price was set at an overvalue and that, by December 2016, the Uplisting Plan was no longer being actively pursued. I find that FAH (D12), through Kimmy (D2), acted with full knowledge of the material circumstances surrounding the transaction.

(k) Vicki (D7), FAT (D11), Giant Seychelles (D13), FAF (D14), Asia Group (D15), SGOCO (D17), SGOCO HK (D18), Giant Connection (D19), and Lanca (D20)

187.As for the remaining Defendants, the evidence does not support a finding that any of them participated in or played a role in the First Asia Transaction. While the Plaintiffs suggest that some of these parties may have facilitated the transfer of, or briefly handled, portions of the subscription proceeds, the fund flow evidence is either incomplete or too attenuated to support such a conclusion. In any event, there is no sufficient evidence that any of these Defendants knew that the transaction was at an overvalue or was otherwise contrary to REFF’s interests. Accordingly, I do not find that any of these entities or individuals participated in, or were aware of the impropriety of, the First Asia Transaction.

D2. Mortgages Transaction

188.The Plaintiffs contend that the UOB Mortgage and CITIC Mortgage (both, the “Mortgages”) over the Hau Fook Street Properties and First Asia Tower were not entered into for any legitimate purpose but intended as a means to obtain a HK$295 million loan, though taken out by Asia One AM (D16), was diverted for Kimmy (D2)’s personal use.

189.The Defendants submit that the Mortgages served a valid commercial objective. They claim the loan proceeds were intended to support the expansion of Asia One AM (D16)’s brokerage business, particularly through the marketing and sale of Evolution insurance policies to a broader client base. As consideration for REFF’s subsidiaries pledging their assets to obtain the loan, Asia One AM (D16) is said to have paid them HK$3.3 million. According to the Defendants, the remaining proceeds were transferred to Kimmy (D2) pursuant to a referral agreement (the “Kimmy Referral Agreement”), under which she was expected to introduce new clients to Asia One AM (D16) in exchange for commissions.

190.I have significant reservations about the Defendants’ explanation. If Asia One AM (D16) genuinely required the financing for its own operations, it is unclear why the loan proceeds were not retained for that purpose. If REFF’s subsidiaries assumed the risk of encumbering HK$295 million in property assets, the rationale for compensating them with only HK$3.3 million is unexplained. And if the transaction was truly commercial, it is difficult to reconcile that with the fact that the bulk of the funds was transferred into Kimmy (D2)’s personal account, rather than being used to support the stated business expansion. By the end of trial, none of these core issues were satisfactorily addressed.

D2.1. The Defendants’ justifications for the Mortgages Transactions are neither commercial nor believable.

191.As I have alluded to earlier, the Defendants’ justification for the commerciality of the Mortgages Transactions rests on two planks – that the REFF group was compensated for entering these transactions and that the transfer of HK$183 million by Asia One AM (D16) to Kimmy (D2) was a legitimate advance under the Kimmy Referral Agreement, pursuant to which she was intended to refer clients to Asia One AM (D16).

192.I do not accept the first justification by the Defendants.

193.There is no contemporaneous documentation – no emails, contracts, or board minutes – that supports the assertion that the HK$3.3 million was pre-agreed compensation. The only document produced is an internal accounting entry referencing “Investment Income (UOB Loan)” for FAT (D11). But this document undermines rather than supports the Defendants’ case. It categorises the HK$3.3 million as “investment income”, not as compensation. If this had been a negotiated fee intended to compensate the REFF group for pledging its assets, one would expect to see it properly recorded as a security fee or arrangement fee, not as income from investment. At any rate, the provenance of the accounting entry is also unconvincing. It is an Excel spreadsheet allegedly prepared by Carmen To, an assistant to Kimmy (D2), who was not called to give evidence. In the absence of evidence from the document’s author, and without independent corroboration, I am not prepared to assign it significant evidential weight.

194.Even if I were to attach some weight to that accounting entry, I am not satisfied that it reflects a genuine intention to compensate REFF:

(1) Kimmy (D2)’s oral evidence undermines the Defendants’ position. In her statement, she asserted that the HK$3.3 million was agreed in advance between herself and Bruce (D10), as compensation to FAT (D11) and HFS Limited. At trial, she was unable to confirm whether the agreement was reached before or after the mortgages were executed – despite having earlier stated it predated them. When confronted with the Plaintiffs’ case that no such agreement existed, she did not offer a clear denial, responding only: “No, I don’t remember”.

(2) The logic of the transaction is unconvincing. It is not credible that REFF would take on HK$295 million in liabilities in exchange for HK$3.3 million in compensation – even if the risk REFF was taking was not high – amounting to just 1% of the exposure. A fund acting in the interests of investors would be expected to seek terms proportionate to the risk undertaken. The Defendants offer no explanation as to how this figure was determined, nor why it would have been acceptable to REFF’s management. On any objective view, the compensation is disproportionately low and commercially implausible.

(3) The timing of the purported compensation also raises concerns. The Mortgages were executed in March and September 2017. Yet the HK$3.3 million payment appears only in an internal accounting record dated January 2018. If the payment were truly intended as compensation, it would be expected to coincide with the underlying transactions. The fact that it arises months later, without contemporaneous agreement or explanation, suggests it was created after the fact to justify a transaction that lacked commercial basis from the outset.

195.In these circumstances, I reject the first pillar of the Defendants’ case. I find that the HK$3.3 million payment was not genuine compensation, but rather a retrospective attempt to rationalise a transaction that lacked commercial merit when undertaken.

196.The second limb of the Defendants’ justification, relying on the Kimmy Referral Agreement, is similarly contrived.

197.The Defendants say that the HK$183 million transferred to Kimmy (D2)’s personal investment account represented an interest-free advance on commissions under the Kimmy Referral Agreement. Under this arrangement, Kimmy (D2) was expected to refer clients to Asia One AM (D16), and was required to repay the advance – interest-free – if she failed to generate policy premiums amounting to five times the amount advanced.

198.The evidence does not support this account. The only contemporaneous document relating to the HK$183 million payment is a board resolution of Asia One AM (D16), signed by its then-chairman Bruce (D10), which categorises the payment as an on-demand loan “with interest.” This is inconsistent with the terms of the Kimmy Referral Agreement, which allegedly provided for an interest-free commission advance. If the HK$183 million had been paid pursuant to the referral agreement, one would expect to see documentation characterising the funds as a commission advance—not as a loan, and certainly not as a loan bearing interest. There is no such supporting record. The absence of any contemporaneous material linking the HK$183 million payment to the Kimmy Referral Agreement strongly suggests that, even if the agreement existed, it was not the operative basis for the transfer.

199.In any event, I do not accept that the Kimmy Referral Agreement was a genuine commercial arrangement. If enforced as written, it would have been economically catastrophic for Asia One AM (D16). The evidence demonstrates that in order for Asia One AM (D16) to generate HK$1 of revenue, it needed to sell between HK$2 to HK$4 worth of insurance policies. Its profit margin on these sales was a mere 1.5% to 2.5%, meaning that for every HK$1 in revenue, it retained only HK$0.05 to HK$0.06 in profit. Yet, the Kimmy Referral Agreement purportedly required Asia One AM (D16) to pay Kimmy (D2) 20% of policy premiums as commission – more than ten times its actual profit margin. In my judgment, it defies commercial logic that any rational entity would agree to such a structure. Had the Kimmy Referral Agreement been implemented, Asia One AM (D16) could not have turned a profit, as it would be paying out multiple times its earnings. A 20% commission on policy premiums is extraordinarily high, and the absence of a credible explanation from Kimmy (D2) for how such a commission could be viable leads me to conclude that the agreement was little more than a pretext to legitimize sending funds to her account.

200.The Defendants’ position is rendered even less plausible by the fact that Kimmy (D2), as a principal shareholder of Asia One group, had long been referring business to Asia One AM (D16) without any such agreement. One is left to wonder why a formal contract suddenly became necessary, especially given the lack of any evidence that she tried to meet referral targets or that Asia One AM (D16) tracked her performance. The absence of monitoring, performance reviews, or verification mechanisms further strips the Kimmy Referral Agreement of any credibility.

201.Taken as a whole, these circumstances are telling. I do not accept that the Mortgage Transactions were intended to benefit Asia One AM (D16) in exchange for HK$3.3 million, nor do I believe that the HK$183 million was transferred to Kimmy (D2) under the Kimmy Referral Agreement. The evidence indicates a made up rationale to mask a misappropriation of funds for the benefit of Kimmy (D2).

D2.2. The Mortgages Transaction was a fraudulent transaction pursued contrary to the interests of REFF and their investors.

202.Having dismissed the Defendants’ justifications, I have no doubt that the Mortgages Transactions are contrary to REFF’s interests. Not only did they provide no benefit to REFF or its subsidiaries (FAT (D11) and HFS Limited), but they also exposed REFF’s assets to a real risk.

203.The fundamental flaw in the Defendants’ position is the complete absence of any material upside for REFF. None of the loan proceeds from the Mortgages were used for REFF’s benefit. Instead, the funds were transferred to Asia One AM (D16) and subsequently channelled to Kimmy (D2). REFF bore the burden of the mortgages yet received nothing in return. As I have explained above, the supposed HK$3.3 million compensation was not a genuine arrangement, and its insignificance relative to the HK$295 million of risk exposure makes it meaningless. That alone disposes of any suggestion that REFF’s interests were safeguarded.

204.Alan (D1)’s attempt to fabricate a purported benefit is even more implausible. He contends that the Mortgages were intended to fund an advance payment under the Kimmy Referral Agreement, which incentivised Kimmy (D2) to sell more Evolution policies. More sales, he argues, would result in greater policyholder funds flowing into Worldwide-HKIF(2), ultimately increasing REFF’s valuation.

205.I have no hesitation in rejecting this argument:

(1) I have already found that the Kimmy Referral Agreement was not a genuine commercial arrangement but an ex post facto justification intended to divert mortgage loan proceeds into Kimmy’s personal investment account. If the agreement itself was fabricated, then any purported link between it and REFF’s financial position should also fall away.

(2) Even if the Kimmy Referral Agreement were genuine, I fail to see how it establishes any benefit for REFF. The agreement was not limited to Evolution policies – it covered all AXA policies and products from other insurers. Alan (D1)’s argument, therefore, rests on the tenuous premise that REFF would benefit from insurance sales generally, regardless of whether those sales were tied to REFF.

206.Stepping back, Alan (D1)’s reasoning in this respect is plainly flawed. It is akin to a car manufacturer lending money to a dealership that sells multiple brands, on the premise that if the dealership grows, it might sell more of its cars. This reasoning is too indirect and speculative such that no commercially rational entity would rely on it as a financing strategy. Alan (D1) is an intelligent and experienced businessman. It is inconceivable that he would genuinely endorse such a roundabout justification. If the true intention had been to benefit REFF, the financial advantage would have been explicitly tied to Evolution policies – and even then, this structure would have been an extraordinarily convoluted and unorthodox means of achieving that goal.

207.In short, I do not accept that there is any upside arising from the Mortgage Transactions that could benefit REFF or its subsidiaries.

208.This brings me to the downside of the Mortgage Transactions.

209.The reality is that these transactions exposed REFF and its subsidiaries to possible real financial risk. The sums at stake were substantial, HK$295 million in liabilities, and the flagship assets of REFF, namely First Asia Tower and Hau Fook Street Properties, were pledged as security. Had the mortgages been called upon, these properties would have been at risk of foreclosure, with potentially severe financial consequences.

210.The Defendants argue that no prejudice was suffered by REFF because the mortgages, as it happens, were ultimately repaid. I do not agree that this provides a justification for the transactions. That the loans were later repaid does not alter the fundamental issue of whether it was proper or commercially reasonable for REFF’s assets to have been pledged in the first place. It is akin to a scenario where one person pawns another’s watch, redeems it, and then seeks to justify the act on the basis that no ultimate harm was done. The risk to the property existed regardless, and where, as here, there is no benefit to the owner, the transaction remains problematic.

211.Nor is there any merit in the Defendants’ claim that REFF itself did not suffer a loss, as any harm arising from the Mortgages was borne solely by its subsidiaries, which alone would have standing to claim damages. I do not accept this. The inquiry is not limited to where the loss is recorded, but whether the Mortgage Transactions – taken as part of the broader Scheme – were carried out dishonestly. That the loss may have occurred at the subsidiary level, or be reflective in nature, does not alter the underlying concern: that those controlling REFF exposed its key assets to significant risk under arrangements that were not commercially genuine.

212.For all these reasons, I find that the Defendants’ explanation for the Mortgage Transactions is contrived. On the balance of probabilities, I conclude that these Mortgages were, instead, entered for the personal enrichment of the Masterminds at REFF’s expense – in the sense of putting REFF at risk. The justifications advanced are not genuine explanations but retrospective rationalisations for what was a deliberate and dishonest scheme to divert funds under the guise of a legitimate financial transaction.

D2.3. The Defendants’ involvement in the Mortgages Transaction.

213.For the reasons below, I find that Alan (D1), Kimmy (D2), Ricky (D3), FAT (D11), the 15^th Defendant (“Asia Group (D15)”) Asia One AM (D16), and 20^th Defendant (“Lanca (D20)”) each played a role in the Mortgage Transactions and did so knowing that the creation of the Mortgages was adverse to REFF’s interests. By contrast, the evidence does not support a finding that the remaining Defendants participated in this part of the Scheme or knew that the transactions were detrimental to REFF.

(a) Alan (D1)

214.Alan (D1)’s involvement in the Mortgage Transactions is clear. The facility letters for both the UOB and CITIC loans were addressed to him, despite the fact that he held no formal position within Asia One AM (D16), the named borrower. In his own evidence, Alan (D1) confirmed that he was the one who initiated contact with the lending banks and facilitated the transaction. Notably, he also agreed to personally guarantee loans totalling HK$290 million and requested Ricky (D3) to do the same.

215.It is equally clear that Alan (D1) understood the Mortgages were detrimental to REFF’s interests. His evidence confirms that the UOB and CITIC loans were obtained for the purpose of expanding the Asia One Group (D15)’s brokerage operations – an objective that conferred no direct benefit on REFF or its subsidiaries. Alan (D1) further acknowledged that the loan proceeds were not used for REFF’s purposes. Instead, a substantial portion of those proceeds was transferred to Kimmy (D2)’s personal accounts and used to support elements of the Restructuring Plan. In light of these admissions, I find that Alan (D1) acted fully understanding the adverse impact the Mortgages would have on REFF’s interests.

(b) Kimmy (D2)

216.Kimmy (D2) also played a central and direct role in the Mortgage Transactions. As the sole director of FAT (D11) and HFS Limited – the entities holding the mortgaged properties – she executed the facility letters and charges relating to both the UOB and CITIC loans. In addition to her corporate role, she personally guaranteed the CITIC loan.

217.I also find that Kimmy (D2) knew the Mortgages were inconsistent with REFF’s interests. The effect of the transactions was to place significant encumbrances on REFF’s principal assets without any corresponding commercial benefit to REFF or its subsidiaries. The evidence demonstrates that the primary beneficiary of the loan proceeds was Kimmy (D2) herself. Part of the UOB loan was used to discharge a mortgage on her personal property at Laguna City. More significantly, HK$183 million of the HK$185 million CITIC loan was transferred to her personal bank and futures accounts in September 2017.

218.In all the circumstances, I am satisfied that Kimmy (D2) knew the Mortgages would disadvantage REFF and that the transactions were structured to advance her personal interests. Her reliance on the Kimmy Referral Agreement as a commercial justification for the transfer has already been found to lack credibility. The disparity between the benefit to her and the risk to REFF makes clear that she understood the Mortgages were not legitimate transactions undertaken for REFF’s benefit.

(c) Ricky (D3)

219.Ricky (D3) was closely involved in the Mortgage Transactions. He personally guaranteed both the UOB and CITIC loans and pledged three of his own properties as security. His actions were instrumental in facilitating the Mortgages Transactions.

220.Nor do I doubt that Ricky (D1) knew and recognised that the Mortgages Transactions were not entered in the interests of REFF:

(1) During cross-examination, Ricky (D3) acknowledged that the creation of the Mortgages over the Hau Fook Street Properties and First Asia Tower carried risk for REFF. He accepted that, if Asia One AM (D16) defaulted on the loans, the lenders could enforce against REFF’s assets.

(2) When asked to explain what benefit REFF might have derived from the Mortgages Transactions, Ricky (D3) relied on the same rationale offered by Alan (D1) – that the loans would be used to support the sale of Evolution policies by Asia One AM (D16). As explained above, I have found that rationale unconvincing and lacking any credible foundation.

(3) A portion of the UOB loan proceeds was ultimately used to redeem mortgage liabilities on properties co-owned by Alan (D1) and Ricky (D3). That Ricky (D3) personally benefited from the loan, while being unable to identify any material benefit to REFF, further supports the conclusion that he did not view the Mortgages as serving REFF’s interests.

(d) Iris (D4) and Madam Lin (D6)

221.The Plaintiffs say that Iris (D4) and Madam Lin (D6) participated in the Mortgage Transactions because certain CITIC loan proceeds were later transferred into their accounts. I do not accept that submission. The payments in question – substantial sums transferred between March and May 2018– occurred nearly a year after the Mortgages were executed. In light of the considerable passage of time and the ongoing dispute regarding the flow of funds, I am not prepared to find that either Iris (D4) or Madam Lin (D6) received proceeds directly traceable to the loan. Even if such a link could be established, mere receipt of funds – particularly long after the fact – does not, without more, amount to participation in the negotiation, approval, or execution of the Mortgage Transactions. To treat a passive recipient as a participant would be to stretch the concept of “participation” beyond its proper meaning.

222.In any event, there is no evidence that either Iris (D4) or Madam Lin (D6) had knowledge of the purpose or effect of the Mortgages. There is nothing to suggest that either was aware that the transactions were inconsistent with REFF’s interests. On the contrary, the evidence suggests that both relied on the guidance of Alan (D1) and Ricky (D3), and acted at their direction without independent understanding or inquiry. In these circumstances, I do not find that either Iris (D4) or Madam Lin (D6) participated in, or knowingly contributed to, the Mortgage Transactions.

(e) Vicki (D7) and SGOCO HK (D18)

223.The Plaintiffs say that Vicki (D7) and SGOCO HK (D18) facilitated the receipt, by SGOCO HK (D18), of the CITIC Loan proceeds obtained by Asia One AM (D16) in 2018. I disagree. The transfer of these funds took place nearly a year after the mortgages were created in 2017, and there is nothing to suggest that either Vicki (D7) or SGOCO HK (D18) had any hand in arranging the loans or Mortgages. The mere fact that the proceeds eventually reached SGOCO HK (D18) does not indicate that they were involved in procuring the loans or the Mortgages. Nor do I see any evidence that either of them knew about the existence of the Mortgages Transactions and the deleterious effects they had on REFF.

(f) Elvis (D8)

224.I accept that Elvis (D8) played a role in the Mortgages Transaction by putting up his property as security for the CITIC Loan and by signing on the CITIC facility letter. Even so, I do not agree that he knew or believed the Mortgages Transaction would harm REFF’s interests. Pledging his own property for Asia One AM (D16)’s loan might have run counter to his personal interests, but it does not prove he knew REFF had pledged its properties or that the arrangement detracted from its interests.

(g) Bruce (D10)

225.I accept that Bruce (D10) played a significant role in the Mortgages Transaction: he served as the CEO and director of Asia One AM (D16), the entity that obtained the CITIC and UOB loans secured by REFF’s assets. But I do not find that Bruce (D10) knew that these Mortgages would harm REFF’s interests. There is no evidence indicating he was aware of REFF’s reasons for pledging its properties or what it was receiving in return. Nor is there any evidence that he realised the loan proceeds were ultimately channelled to Kimmy (D2) and Ricky (D3) – rather than benefiting REFF. I therefore decline to conclude that Bruce (D10) understood the Mortgages Transaction to be detrimental to REFF.

(h) FAT (D11)

226.I find that FAT (D11) played a role in the Mortgages Transaction by pledging First Asia Tower as collateral for Asia One AM (D16)’s borrowings – without receiving any benefit in return. Because Kimmy (D2) served as FAT (D11)’s sole director then, her knowledge can be imputed to FAT (D11). Given my earlier determination that Kimmy (D2) knew and believed that the Mortgages Transaction was detrimental to REFF, I likewise conclude that FAT (D11) shared that knowledge.

(i) Asia Group (D15)

227.Asia Group (D15) also played a role in the Mortgages Transaction. Beyond offering a guarantee for the UOB loan, both the UOB and CITIC loans were ostensibly intended to support Asia One Group (D15)’s brokerage business. I agree with the Plaintiffs that Kimmy (D2)’s knowledge can be imputed to Asia Group (D15), given her directorship. Thus, just as Kimmy (D2) appreciated the Mortgages Transaction’s detrimental effect on REFF, Asia Group (D15), through her did as well.

(j) Asia One AM (D16)

228.Asia One AM (D16) played an essential role in the Mortgage Transactions, having been the borrower under the UOB and CITIC loans. These loans were secured by properties held by entities in the REFF group.

229.The question of Asia One AM (D16)’s knowledge must be addressed through the individuals whose actions may be attributed to it. On the evidence, I conclude that the relevant knowledge is that of Kimmy (D2):

(1) Although Bruce (D10) was the sole director of Asia One AM (D16), the company was wholly owned by Asia Group (D15), where Kimmy (D2) served as controlling shareholder and director. Through her position at the parent company, Asia Group (D15), Kimmy (D2) exercised effective control over Asia One AM (D16) and functioned as its directing mind.

(2) Kimmy (D2) also held operational authority within Asia One AM (D16), notwithstanding her lack of formal title within Asia One (AM). She was a signatory on the company’s bank accounts and had control over the disposition of its funds.

(3) The loan proceeds received by Asia One AM (D16) were transferred almost entirely into Kimmy (D2)’s personal bank and futures accounts. Although she sought to attribute these transfers to Bruce (D10)’s decision under the so-called Kimmy Referral Agreement, I have already found that explanation to lack credibility. The more probable conclusion is that Kimmy (D2) used Asia One AM (D16) to obtain funding for her own purposes, with Bruce (D10) acting under her direction and without exercising independent judgment.

230.In light of my finding that Kimmy (D2) knew and believed the Mortgage Transactions were contrary to REFF’s interests, I conclude that her knowledge is attributed to Asia One AM (D16). The company thus acted with knowledge that the transactions were not in REFF’s interests.

(k) Lanca (D20)

231.I also accept that Lanca (D20) played a role in the Mortgages Transaction. It not only provided a guarantee for the CITIC Loan but also pledged its own property as collateral for that loan. I agree with the Plaintiffs’ submission that, because Ricky (D3) was Lanca (D20)’s sole director, his knowledge can be imputed to Lanca (D20). Accordingly, just as Ricky (D3) recognised the Mortgages Transaction’s detrimental impact on REFF, Lanca (D20), through him, also shared that belief and knowledge.

(l) Jason (D9), FAH (D12), Giant Seychelles (D13), SGOCO (D17), and Giant Connection (D19)

232.With respect to Jason (D9), FAH (D12), Giant Seychelles (D13), SGOCO (D17), and Giant Connection (D19), the evidence does not sufficiently support a finding that they participated in, or otherwise facilitated, the Mortgage Transactions. There is no sufficient evidence that they were involved in the negotiation, execution, or implementation of the loans or the related Mortgages. Nor is there sufficient evidence that they had knowledge of the purpose or effect of these transactions, or that they understood the transactions to be contrary to REFF’s interests. Absent such evidence, I am unable to conclude that these parties played any role in this aspect of the Scheme.

D3. HFS Transaction

233.The Plaintiffs allege that Vagas Lane, a subsidiary of REFF, sold HFS Limited to the SGOCO group at a substantial undervalue – less than half the amount Vagas Lane had paid for it just two years earlier. They argue that this significant reduction in price reflects a fraudulent transaction orchestrated by the individuals in control of REFF group to effectively strip it of valuable assets. In support, the Plaintiffs highlight the absence of meaningful negotiations, the lack of independent documentation or valuation, and the fact that the same individuals effectively controlled both sides of the transaction, depriving REFF of any real arm’s length protection.

234.The Defendants reject this characterisation. They maintain that the transaction formed part of a broader Restructuring Plan aimed at converting REFF’s real estate assets into equity in SGOCO (D17), a publicly traded company. According to the Defendants, the objectives of the transaction were twofold: to improve liquidity and to allow REFF to benefit from any future appreciation in SGOCO (D17)’s share price by transferring property in exchange for shares to be issued to Vagas Lane.

235.Having considered the totality of the evidence, I find that the HFS Transaction was not driven by legitimate commercial reasons. Rather, it operated to the detriment of REFF and was structured to benefit those in control. The transaction lacked the characteristics of arm’s length dealings and failed to secure a fair bargain for REFF. I therefore conclude that the transaction was fraudulent in nature and executed at REFF’s expense.

D3.1. The Restructuring Plan was not pursued by the Defendants for any legitimate or otherwise genuine justification.

236.The Defendants have advanced two principal justifications for the Restructuring Plan: first, that it was intended to address liquidity concerns within REFF; and second, that it would allow REFF to benefit from a potential increase in the share price of FAH (D12).

237.On the evidence, I do not find either explanation to be credible.

238.Starting first with the liquidity justification, I reject the claim that the Restructuring Plan was necessary to address a shortfall in liquidity. Under the terms of the Worldwide HKIF(2) PPM, Giant Seychelles (D13) was contractually obligated, via a put option, to purchase REFF shares from redeeming policyholders. This mechanism would in principle, have insulated REFF from the illiquidity of its real estate holdings, since Giant Seychelles (D13) was responsible for providing redemption cash.

239.The Defendants have given no satisfactory reason as to why a wholly new liquidity arrangement was needed. While they raise the possibility that Giant Seychelles (D13) might not honour its put option obligations, there was no suggestion of any liquidity crisis, corporate governance problem at Giant Seychelles (D13), or prior difficulty in meeting redemptions that would give rise to such a real – as opposed to a merely theoretical – liquidity risk. The claim that REFF’s liquidity was compromised by “the financial stability of GMC Seychelles” thus appears to be mere speculation – insufficient on its own to justify the Restructuring Plan. I reject the liquidity justification.

240.Alternatively, even there was a genuine liquidity concern, I do not believe the Restructuring Plan satisfactorily addressed it. The SGOCO (D17) shares and the Note Portion (convertible into additional SGOCO (D17) shares) that REFF received in exchange for relinquishing real estate were restricted securities, effectively depriving REFF of any immediate liquidity:

(1) Under the HFS Transaction, Vagas Lane acquired 2.9 million shares of SGOCO (D17). Schedule 1, Clause 13.1 of the contract between Vagas Lane and Giant Connection (D19) describes these shares as “restricted securities”, further clarifying that they are acquired “not with a view to or for distributing or reselling … in violation of the Securities Act”.

(2) The Note Portion that REFF obtained via the Note Portion Transaction was likewise classified as “restricted securities” under Clause 3(d) of the contract between Madam Lin (D6) and REFF, which states that REFF must “hold the Securities indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available”.

241.Given these restrictions, the SGOCO (D17) shares were not intended for immediate distribution or resale. It is not easy to see how trading valuable real estate for restricted stock could possibly alleviate any purported liquidity shortfall. It is true that Alan (D1) attempted to fill this evidentiary gap during oral testimony, claiming that any lock-up on on-exchange sales lasted no more than six months and that off-exchange transfers were feasible. But I find this unpersuasive. None of the contemporaneous documentation mentions a six-month time limit or suggests immediate off-exchange transfers were allowed. The contractual prohibitions include no temporal restriction, and a whiteboard diagram – which was drawn up by Alan (D1) and Ricky (D3) – also labels the shares as “restricted” with no reference to a six-month period or off-exchange trading. Matters grew even more puzzling when, under cross-examination, Alan (D1) abandoned the notion of partial restrictions and insisted the shares were liquid. Notably, when asked whether the shares REFF acquired were illiquid “because there were some restrictions on the sale and they couldn’t dispose of it freely, immediately, correct?”, one might have expected him to say “yes” if his case was that the restriction was only six months, and that off-exchange transfers were possible. Instead, Alan (D1) simply said “disagreed”.

242.Faced with these conflicting and shifting explanations and given the overall lack of credibility in Alan (D1)’s evidence, I find that the shares in SGOCO (D17) obtained by REFF under the Restructuring Plan were restricted and thus not suitable to address any genuine liquidity concerns.

243.Stepping back, even if the shares in SGOCO (D17) had been freely tradable, the decision to use the Restructuring Plan to pursue liquidity remains difficult to understand. If REFF sought to convert real estate into liquid assets, the logical course would have been to sell the properties outright or to contribute them to a vehicle with experience in real estate – such as a real estate investment trust (or at least a listed company with a high market capitalisation and high daily turnover on the stock market). By contrast, the Restructuring Plan involved transferring real estate to SGOCO (D17), a company focused on technology, with no apparent track record in real estate operations. The Defendants have provided no credible explanation for how such a strategy would have enhanced REFF’s liquidity. On the evidence, I find that the stated rationale for the Restructuring Plan was not supported by either the surrounding circumstances or commercial logic.

244.I now turn to the share price appreciation justification: that the Restructuring Plan was intended by the Defendants to enable REFF to benefit from an anticipated increase in SGOCO (D17)’s share price.

245.As the Plaintiffs have noted, the most valuable assets injected into the SGOCO group – namely the Hau Fook Street Properties and First Asia Tower – came from REFF’s subsidiaries, in exchange for SGOCO shares. This was essentially a left-pocket-to-right-pocket transfer for REFF: it gave up real estate and received SGOCO (D17) shares. I find it difficult is to see how REFF could conceivably benefit from an uptick in share price arising from the transfer of REFF’s own assets to SGOCO (D17).

246.Confronted with this difficulty, Alan (D1) claimed at trial that the most valuable assets flowing into SGOCO (D17) did not originate from REFF, but rather from a fintech entity called Giant Financial Services, owned by his brother-in-law, “Victor Or”. I reject this explanation:

(1) Alan (D1) conceded in cross-examination that when the Restructuring Plan took shape in early 2018, there was no valuation report for Giant Financial Services. He also admitted he had not seen its 2018 accounts before these proceedings. There was thus no sufficient basis for him to believe, at the inception of the Restructuring Plan, that injecting Giant Financial Services would boost SGOCO (D17)’s share price.

(2) Those 2018 accounts show shareholders’ equity of US$800,000 – negligible compared to the HK$400 million value of REFF’s properties, First Asia Tower and the Hau Fook Street Properties. It is not credible that Alan (D1) anticipated SGOCO’s share price would rise materially on the back of acquiring Giant Financial Services.

(3) Confronted with these accounts, Alan (D1) pointed to the background of his brother-in-law and father-in-law, whom he described as hailing from a “prominent banking family”, to argue that their network would ensure the fintech’s success. With respect, this is speculation unsupported by contemporaneous evidence.

247.In short, I see no credible basis to find that Alan (D1) viewed Giant Financial Services as SGOCO (D17)’s (or the broader Restructuring Plan’s) value driver. His intent from the outset was that REFF’s valuable real-estate assets would underpin any rise in SGOCO (D17)’s share price under the Restructuring Plan. Accordingly, he could not plausibly have expected REFF to reap gains from an alleged share-price surge fuelled by his brother-in-law’s fintech venture. I therefore reject the suggestion that the Plan was structured to remedy REFF’s liquidity challenges, or that it was designed to benefit REFF through share price gains.

248.That conclusion gives rise to the more fundamental question: if REFF was not intended to benefit from the Plan, who was? The evidence points clearly to the Masterminds. In the lead-up to Phase Two of the Restructuring Plan, Alan (D1) and Kimmy (D2) began acquiring a significant stake in SGOCO (D17). Their family members, including Iris (D4) and Clara (D5), followed suit. Collectively, they came to control a substantial portion of the SGOCO group’s equity. In this light, the rationale behind the Restructuring Plan becomes easier to discern. Transferring high-value REFF real assets into SGOCO (D17) had the foreseeable effect of enhancing the financial position of a company in which the Masterminds had both a controlling and substantial economic interests. The benefit would be all the greater if, as discussed below, the assets were transferred at an undervalue. In that scenario, SGOCO (D17) would acquire valuable real estate on favourable terms, while REFF bore the corresponding economic loss. It is of course true that in some bargains, one party’s gain does not necessarily translate into another party’s loss but this was the case here.

249.Kimmy (D2) conceded under cross-examination that the Restructuring Plan stood to benefit her as a shareholder in SGOCO (D17): if the share price increased, her personal gain would similarly increase. Alan (D1) was equally candid in stating that “we all expect” to profit from an uptick in share price. But when Kimmy (D2) was asked whether the Restructuring Plan would also benefit REFF or its parent company, Worldwide, she answered: “I have no idea.”

250.Of course, the possibility of profit for the Masterminds does not, by itself, prove fraud. There might be cases where both a company and its controllers benefit. But that is not what occurred here. The Masterminds bought their SGOCO (D17) shares at roughly US$1 per share, whereas REFF, through the Restructuring Plan, “paid” close to US$20 per share when factoring in the value of the real estate it relinquished. Nothing in the transaction injected new value into the group; assets merely moved from REFF’s pocket to SGOCO’s. The imbalance is clear: the Masterminds kept their low-cost stake and stood ready for a windfall; REFF exchanged valuable assets for shares priced at a twenty-fold premium. The advantage lies wholly with the Masterminds – at REFF’s expense.

251.Before leaving this topic, I should address a submission raised by the SGOCO Group Defendants. They argue that regardless of whether the Restructuring Plan was fraudulent, it does not affect their position. From their perspective, the sole concern was implementing the Reverse Takeover, whereby Alan (D1) and his associates would assume control of SGOCO (D17) by injecting REFF’s assets into the listed group, while Mr (the prior controller) exited by selling its existing businesses. On their case, this Reverse Takeover is entirely legitimate, and the Court has no basis to deem it fraudulent – especially without hearing from Mr Wai himself.

252.That argument, with respect, is not on point. There is no serious contention that the Reverse Takeover itself was not genuinely pursued, nor do I suggest Mr Wai was a party to any fraud. Rather, the central question is whether the SGOCO group knew (or had reason to know) that the Restructuring Plan was conceived as a fraud upon REFF and its investors. Their state of mind is decisive: if the SGOCO group truly believed the asset injection formed part of an ordinary reverse takeover, unaccompanied by any intent to injure REFF, they may well face no liability – even if the Restructuring Plan is ultimately shown to be a sham. Conversely, as I will come to below, if the evidence shows that the SGOCO group knew of the fraudulent nature of the Restructuring Plan and nevertheless chose to participate in it, then it cannot simply invoke the Reverse Takeover as a defence. The two plans are not mutually exclusive: the group can simultaneously execute a legitimate change in control (replacing Mr Wai with Alan (D1) and his close associates) and be complicit in a fraudulent Restructuring Plan designed to acquire REFF’s assets at undervalue. For example, if the SGOCO group had agreed to let Alan (D1) take control while fully aware that he intended to dissipate REFF’s assets at undervalue by this takeover, their knowledge and facilitation would give rise to liability. It would be no answer for them to claim, “We were pursuing a real Reverse Takeover”.

D3.2. The HFS Transaction was a fraudulent transaction pursued contrary to the interests of REFF and its investors.

253.I next turn to the question of whether the HFS Transaction was a fraud pursued contrary to REFF’s interests. Given my finding that the Restructuring Plan was never intended to address any liquidity issue but devised to enrich the Masterminds, it follows that the core component of that plan – the HFS Transaction – is tainted by the same dishonesty.

254.Further I have also been persuaded by the stark discrepancy between what REFF initially paid for HFS Limited – HK$50 million (purchased from Alan (D1) and Kimmy (D2)) – and the HK$26.1 million REFF ultimately received from SGOCO (D17) only two years later. This nearly 50% price drop cannot be attributed to a decline in the property market. Indeed, both Alan (D1) and Kimmy (D2) concede that market conditions were on an upward trajectory during this period.

255.In response, the Defendants principally rely on a single valuation – the so-called Graval HFS Report – which pegs HFS Limited’s value at HK$26.1 million. They say that given that the independent valuer is above suspicion, the Graval HFS Report must reflect HFS Limited’s true value, thus defeating any allegation of a fraud against them.

256.I reject that argument.

257.First, property valuations can vary widely, and directors are not obliged to accept the first report they receive without question. Context matters. Here, the property was sold at a 50% discount in a rising market – an alarming prospect for any prudent seller, suggesting an immediate and substantial loss. One would normally expect a rational seller to seek a second valuation, consider alternatives, or at the very least consider postponing the sale unless compelled by necessity. In this instance, however, there was no evidence of a need to sell. As I have concluded, the supposed “liquidity” rationale was illusory, so there was no pressing reason for Vagas Lane to offload HFS Limited at such a precipitous discount in 2018. Yet rather than pause and reassess, REFF somehow proceeded with the sale without serious scrutiny – a course of action that reflected neither caution nor commercial sense.

258.Second, the evidence before me demonstrates a plain lack of scrutiny regarding the HFS Transaction and is consistent with a deliberate rush to completion without any genuine consideration of REFF’s best interests:

(1) Alan (D1) admitted to having arranged the HFS Transaction between REFF and SGOCO, acknowledging he was unaware of any negotiations between Vagas Lane and SGOCO (D17) regarding the sale terms. Kimmy (D2) corroborated Alan’s responsibility for the transaction and explicitly could not recall any bargaining or negotiation occurring.

(2) The absence of correspondence or other evidence indicating negotiations between REFF and the SGOCO group is striking. Jason (D9)’ assertion at trial that he sought a higher price from SGOCO (D17) is incredible. He initially downplayed the significance of the loss, arguing the property was merely “injected” into the SGOCO group rather than “sold”. Only when confronted with the logical flaw of this reasoning – given that REFF acquired neither full nor controlling interest in the SGOCO group – did he pivot to claim he pursued a better price. This inconsistency, coupled with Jason (D9)’s credibility issues, renders his account unreliable.

(3) The final price of the HFS Transaction of HK$26.1 million exactly mirrors the valuation from the Graval HFS Report. Dominic Li (director at SGOCO (D17)) characterized this as mere “coincidence”, which I find implausible. The evidence strongly suggests SGOCO (D17) adopted the Graval valuation as a predetermined price, imposed swiftly upon Vagas Lane (where Jason (D9) was a director). Dominic Li's evidence, that the transaction concluded within 24 hours of receiving the Graval valuation, reinforces my view that the price was effectively fixed without a meaningful or genuine negotiation.

(4) Equally striking is SGOCO (D17)’s decision to leave the UOB Mortgage encumbering the Hau Fook Street Properties. These assets secured a loan benefiting Asia One AM (D16), with funds ultimately deposited into Kimmy’s (D2) account. In fact, Dominic Li had conceded at trial that the borrower had no relationship with the SGOCO group, rendering the group’s decision not to discharge the mortgage extraordinary and commercially indefensible, as it exposed the properties to potential – or at least theoretical – foreclosure to satisfy an unrelated third-party debt.

259.Third, I see little reason to accord weight to the Graval HFS Report when the Defendants themselves implicitly reject its HK$26.1 million valuation. During trial, Alan (D1) explicitly contested any comparison between the original HK$50 million cash sale and the subsequent share-based consideration. By suggesting a hypothetical scenario where SGOCO’s share price might rise, thereby restoring the property's value closer to HK$50 million, he effectively for practical purposes repudiated the HK$26.1 million valuation as fair or accurate.

260.Alan (D1)’s position was vividly clear during cross-examination, as he urged the Court to disregard the HK$26.1 million figure:

“It’s not apple to apple, by the way, my Lord. Two years ago, I sold it, me and Kimmy sold it, for 50 million cash … Then now you are saying, in comparison, the price has dropped to 26, please don’t listen to the … my Lord, don’t listen to 26. It’s not apple to apple.”

261.Kimmy (D2) was similarly forthright, acknowledging that property prices in Hong Kong had generally increased from 2016 to 2018 and conceding “one would have thought” the Hau Fook Street Properties “would be worth more than 50 million by 2018”.

262.Taken together, these admissions indicate that neither Alan (D1) nor Kimmy (D2), the prime orchestrators of the HFS Transaction, viewed the Graval HFS Report’s valuation as genuinely reflective of fair market value. Further reinforcing this view, Dominic Li confirmed that the valuation was prepared exclusively for SGOCO’s internal use, without REFF’s reliance or reference before finalising the transaction.

263.In light of this, coupled with the haste in executing the sale, the lack of any genuine negotiation over the terms of sale, and the absence of any need or urgency to dispose of the property at a 50% discount, I conclude that the HFS Transaction was indeed dishonest and fraudulent.

264.For completeness, I have also considered the Defendants’ remaining arguments. Although it is unnecessary to address each of these points exhaustively, I specifically address and reject the following:

(1) The Defendants contend that the HFS Transaction caused no recoverable loss to REFF, thereby negating any allegation of dishonesty. This argument is flawed. The legal bar on recovering reflective loss does not equate to an absence of harm. Rather, it establishes that it is Vagas Lane, rather than REFF, who is the proper party to claim damages in respect of the HFS Transaction. It does not change the reality that REFF, as a shareholder in Vagas Lane, suffered adverse consequences from the undervalued sale of HFS Limited.

(2) The Defendants point to a UOB facility letter valuing the property at HK$13.6 million and a subsequent Vigers valuation report dated 16 April 2018, two months after the HFS Transaction, valuing the properties at HK$14 million. These valuations are equally unpersuasive. There is no indication that the Defendants genuinely relied on either valuation; indeed, the Vigers valuation postdates the transaction, would thus not reflect the parties' contemporaneous considerations. Furthermore, having already found that Alan (D1) and Kimmy (D2) themselves did not accept the higher valuation from the Graval HFS Report (HK$26.1 million) as fair, the even lower valuations cited here offer no support. Additionally, these valuations do nothing to justify the Defendants’ haste in completing the sale without meaningful negotiations despite incurring a 50% loss.

(3) The Defendants also criticise the Plaintiffs for failing to produce a valuation demonstrating the fair market value of the Hau Fook Street Properties as of February 2018. Although such a valuation could indeed have been helpful, it is not invariably necessary. In the particular circumstances of this case, undervaluation is manifest without a formal appraisal. The architects of the transaction themselves rejected the fairness of the Graval valuation; the sale occurred at half the price achieved just two years earlier; there was no compelling reason to expedite the transaction; and genuine commercial negotiations were notably absent. Collectively, these circumstances sufficiently establish that the sale price was undervalued and clearly detrimental to REFF’s interests.

D3.3. The Defendants’ involvement in the HFS Transaction.

265.For the reasons below, I find that Alan (D1), Kimmy (D2), Ricky (D3), Vicki (D7), Jason (D9), Giant Seychelles (D13), SGOCO (D17), and Giant Connection (D19) each played a role in the HFS Transaction, fully aware that the sale was detrimental to REFF’s interests. By contrast, I do not find that any of the remaining Defendants participated in and appreciated the fraudulent nature of the HFS Transaction.

(a) Alan (D1)

266.Alan (D1) was clearly involved in the sale of HFS Limited. He arranged the transaction between Vagas Lane and the SGOCO group, speaking with Mr Wai – who was formerly in control of the SGOCO group – to facilitate the Restructuring Plan. Under cross-examination, Alan (D1) even confirmed that selling HFS Limited to the SGOCO group as part of the Restructuring Plan was his “whole idea”.

267.I also have no doubt that Alan (D1) knew or believed that the HFS Transaction ran contrary to the interests of REFF:

(1) In March 2016, two years before the HFS Transaction, Alan (D1) and Kimmy (D2) sold HFS Limited for HK$50 million to Vagas Lane. Given that he knew that Vagas Lane ultimately resold HFS Limited to Giant Connection (D19) for just over half that price, at HK$26.1 million, he knew and must have realised this was a significant undervalue.

(2) Alan (D1) was the architect of the Restructuring Plan. In light of my determination that the plan was not genuinely undertaken for any legitimate or commercial purpose, it follows that Alan (D1) knew and must have known that the purported justifications of “liquidity” and “share-price appreciation” were contrived and lacked a factual basis.

(b) Kimmy (D2)

268.Kimmy (D2) also participated in the HFS Transaction:

(1) She was the sole director of HFS Limited – the subject matter of the HFS Transaction. The Graval HFS Report confirmed that the management of HFS Limited, which necessarily includes Kimmy (D2), had reviewed and agreed on the report.

(2) Although it was Jason (D9), as Vagas Lane’s sole director, who formally authorised the sale of HFS Limited, I have noted that Jason (D9) was a loyal subordinate who basically followed Kimmy (D2)’s instructions. He would not have approved the sale without her consent. On the stand, Kimmy (D2) candidly admitted that Jason (D9) was “a staff accountable to” her.

(3) Kimmy (D2) admitted in cross-examination that she was privy to the discussions with Alan (D1) over the Restructuring Plan and had even “delegated Alan to” execute it.

269.As to her knowledge, I similarly find that Kimmy (D2) fully understood the HFS Transaction was contrary to REFF’s interests. Together with Alan (D1), she previously sold HFS Limited to Vagas Lane for HK$50 million in 2016, yet she later approved the Graval HFS Report’s HK$26.1 million valuation in 2018. I further agree with the Plaintiffs that her evidence on the stand reveals she recognised the Restructuring Plan was designed to enrich her personally and that she was unable to identify any tangible benefit the Restructuring Plan might have yielded to REFF.

(c) Ricky (D3)

270.Ricky (D3) similarly played a central role in the Restructuring Plan, particularly with regard to the HFS Transaction. Not only did he serve as solicitor for Vagas Lane during the sale of HFS Limited (seemingly without charging any fees), but he also witnessed Jason (D9)’s signature on the share transfer documents transferring HFS Limited to Giant Connection (D19). Alan (D1)’s evidence during cross-examination further supports this conclusion; he recalled discussing the Restructuring Plan with Ricky (D3), including illustrating it on a whiteboard.

271.As for Ricky (D3)'s knowledge, I find that he knew and believed the HFS Transaction was significantly undervalued and designed to misappropriate value from REFF's assets to enrich the Masterminds.

272.I have not lost sight of Ricky (D3)’s claim, advanced during cross-examination, that he could not recall if he knew at the time that Alan (D1) and Kimmy (D2) had previously sold HFS Limited to Vagas Lane in 2016 for HK$50 million. I find this bald denial not credible:

(1) As solicitor for Vagas Lane in the HFS Transaction, he would – by his own admission – have conducted basic “know your client” checks. It is scarcely credible that he did not discover the property’s prior sale at twice the price being charged now.

(2) Alan (D1) admitted to discussing the Restructuring Plan with Ricky (D3). Given the importance of the HFS Transaction to the plan, it defies logic that Alan (D1) would omit mentioning that HFS Limited was previously sold for HK$50 million: over twice the price now proposed for the HFS Transaction.

(d) Vicki (D7)

273.Vicki (D7)’s involvement in the HFS Transaction is likewise plain. She was not only the sole director of Giant Connection (D19), the entity that acquired HFS Limited from Vagas Lane, but also a director of SGOCO (D17), which issued over 2.9 million shares to Vagas Lane as consideration for the acquisition of HFS Limited.

274.The issue is whether Vicki (D7) shared Alan (D1)’s knowledge and belief that the HFS Transaction harmed REFF’s interests.

275.Despite Vicki (D7)’s efforts to distance herself from the HFS Transaction, I find that attempt not credible. As noted previously, Vicki (D7) was a close associate of Alan (D1) who, notwithstanding her lack of experience, was appointed as a director at both Giant Connection (D19) and SGOCO (D17). This was because Alan (D1) needed a trusted ally inside SGOCO to facilitate the Restructuring Plan. Instead of exercising independent judgment, she acted as his loyal “right hand” and was certainly privy to his broader objectives – including the HFS Transaction.

276.How Vicki (D7) handled the Mortgages after the HFS Transaction is also indicative. Despite the SGOCO group having no apparent connection with Asia One AM (D16) (the entity that took out the loan secured by the UOB Mortgage), Vicki (D7) continued to allow the UOB Mortgage to remain on the Hau Fook Street Properties even after Giant Connection (D19) acquired those assets. Worse, she even agreed to increase Asia One AM (D16)’s loan facility from HK$110 million to HK$127 million, thereby burdening Giant Connection (D19)’s newly acquired property with risks entirely unrelated to its interests. In a genuine arm’s-length transaction, a prudent director would not expose valuable corporate assets to foreclosure risk without deriving any discernible benefit. Indeed, under cross-examination, Vicki (D7) was unable to identify even a single advantage accruing to SGOCO (D17). Her actions strongly suggest an intent to advance the interests of Alan (D1) and his associates rather than protect those of the SGOCO group.

277.Equally troubling is Vicki (D7)’s justification for the price of the HFS Transaction, which precisely matched the Graval HFS Report figure, being the product of “genuine negotiation”. She explained that “after they had negotiation and relayed the price to me, I found it matched that one in the valuation report, so I thought that it was okay” and, when pressed on whether she inquired why they were exactly the same, she replied, “as far as I can remember, yes, that’s right”. This is, with respect, implausible. While improbable coincidences can sometimes occur, genuine negotiations rarely produce results that precisely replicate valuations – much less twice in related transactions. Here, the consideration for the 2^nd Paris Sky Agreement (which also formed part of the Restructuring Plan) matched the Colliers FAT Report valuation precisely (HK$205 million). That such exact congruence appeared twice in interconnected transactions in the same Restructuring Plan undermines any suggestion that genuine negotiation occurred and instead raises the unavoidable inference that Vicki (D7) was not truthful in an effort to shield Alan (D1).

278.Collectively, these facts lead to the clear conclusion that Vicki (D7) was deliberately installed by Alan (D1) in the SGOCO group to facilitate the execution of the Restructuring Plan. It is inherently unlikely that she was ignorant of that plan’s underlying rationale, methods, and evident lack of genuine commercial justification.

279.The following factors also bolster my view that Vicki (D7) knew and believed that the HFS Transaction was harmful to REFF:

(1) I accept Dominic Li’s evidence under cross-examination that the board of SGOCO (D17), including Vicki (D7), was informed that HFS Limited had been acquired for HK$50 million just two years prior, yet was now being sold for merely HK$26.1 million. Although Dominic Li’s evidence diverged from his written statement, I find his oral account credible, as consistent with the inherent probabilities, and likely reflective of reality based on the undisputed and undisputable evidence. In contrast, Vicki (D7)’s denial was evasive and, given my earlier finding that she was likely installed as a nominee director in the SGOCO group by Alan (D1), inherently improbable. I therefore find that she was indeed aware of this disparity in price.

(2) Given that Vicki (D7) knew HFS Limited had previously been transacted at HK$50 million in 2016 and now was purportedly worth half as much amid an appreciating property market, it is inherently unlikely she would have believed this transaction benefited either Vagas Lane or REFF. Indeed, Vicki (D7)’s own evidence acknowledges the persistent upward trajectory of the property market in Hong Kong during that period. A 50% loss incurred by Vagas Lane over two years would unmistakably signal that the transaction was detrimental.

(3) I similarly reject any suggestion that Vicki (D7) had acted “reasonably” as she “had no reason to doubt” the Graval HFS Report. While I do not suggest that this valuation report was fraudulent, even an honest valuation may sometimes fall significantly short of what a diligent seller should expect, particularly in an otherwise bullish property market. The problem here is that REFF accepted the HK$26.1 million figure without seeking alternative valuations or negotiating for a better price. Her passive acceptance, especially under the pretense of a Restructuring Plan with no genuine liquidity imperative, is very irregular. Considering her awareness of both the robust property market and the Restructuring Plan’s fictitious rationale, Vicki (D7) must have known that REFF’s controlling individuals were not merely indifferent to the entity’s interests – they were actively undermining them.

(e) Jason (D9)

280.As for Jason (D9), he participated in the Paris Sky Transaction in his capacity as sole director of Vagas Lane. Although he had a duty to secure the best possible sale price of HFS Limited, he did not do so.

281.I am satisfied that Jason (D9) recognised that the HFS Transaction was manifestly disadvantageous to REFF and Vagas Lane. Indeed, he conceded in evidence that the sale of HFS Limited formed part of the overarching Restructuring Plan and acknowledged his awareness that the underlying properties had previously been valued at HK$50 million, nearly twice the price accepted in the resale. Yet he did nothing beyond accepting, without objection, SGOCO (D17)'s HK$26.1 million offer. He neither challenged that valuation, sought independent appraisals, nor proposed deferring the sale to avoid incurring a substantial loss.

282.When questioned on this inexplicable complacency, Jason (D9) tried to justify his actions by characterising the transaction as “not really a sale”, but an “injection” of assets into a target company in exchange for shares. That justification does not withstand scrutiny. As I pointed out to him during cross-examination, Vagas Lane was acquiring merely a 15% stake in SGOCO (D17). Thus, if 11 Hau Fook Street had been valued at HK$1, only 15 cents of that value would accrue to Vagas Lane, while the remaining 85 cents would represent an unequivocal loss.

283.I reject any suggestion that Jason (D9) was incapable of comprehending this simple arithmetic; at trial, he quickly grasped the logic of this analysis. Despite recognising the transaction’s irrationality, he persisted in his assertion of legitimacy merely because it formed part of the Restructuring Plan. The more plausible explanation is that Jason (D9) deliberately (but perhaps with some reluctance) disregarded the unfavourable economics of the sale, approving it fully aware that it served Alan (D1) and Kimmy (D2)’s personal interests at the direct expense of the interests of Vagas Lane and REFF. In truth, Jason (D9) was placed in an uncomfortable position, and it was unfortunate he acted in the way he did.

(f) Giant Seychelles (D13)

284.Giant Seychelles (D13), as director of REFF, procured its wholly owned subsidiary, Vagas Lane, to enter into the HFS Transaction. I therefore conclude it participated directly in this aspect of the Scheme.

285.Turning to its state of mind, although Sudjono nominally served as its sole director at the relevant period, the evidence overwhelmingly demonstrates she functioned merely as a figurehead for the Masterminds. Several considerations reinforce this conclusion:

(1) The circumstances surrounding her appointment are highly suspicious. Jason (D9), the previous sole director of Giant Seychelles (D13), claimed to have stepped down shortly before the commencement of the Restructuring Plan because of the purported failure of the Uplisting Plan. But I have already rejected his explanation as untruthful. What more likely happened was that Jason (D9) formally resigned precisely because he understood the fraudulent nature of the Restructuring Plan and sought to shield himself from further potential liability (civil or criminal) by installing a disposable successor. As a result, Sudjono was deliberately selected as a convenient scapegoat, positioned from the outset to bear responsibility in the event that the fraudulent Scheme become exposed.

(2) In this regard, Sudjono was an “ideal” candidate for such a role. Based in Australia and never having visited Hong Kong, despite REFF’s assets being centered there, she was strategically positioned out of reach, practically insulating her from practical accountability. Predictably, once the Scheme unravelled, Sudjono entirely disappeared from the narrative, with the Defendants providing the convenient explanation that they had somehow “lost contact” with her. Such circumstances strongly corroborate the view that she was deliberately installed as a disposable figurehead.

(3) Further supporting this conclusion, the evidence establishes that Sudjono, on its face, lacked the relevant qualifications, experience, or demonstrable ability to manage an entity of REFF’s scale. Indeed, no credible documentation or contemporaneous communications reflect any meaningful managerial activity by her during the execution of the Restructuring Plan. This lack of documentary trail is precisely what one would expect if she were nothing more than a figurehead – no record existed because no genuine control was exercised by Sudjono.

286.Instead, I find that the true directing minds of Giant Seychelles (D13) in relation to the Restructuring Plan (including the HFS Transaction, the Paris Sky Transaction, and the Note Portion Transaction) remained at all material times Alan (D1), Kimmy (D2), and Jason (D9):

(1) Alan (D1) was unquestionably the architect of the Restructuring Plan. Indeed, Kimmy (D2) delegated its implementation to him, which necessarily involved directing Giant Seychelles (D13), as sole director of REFF, to undertake the HFS, Paris Sky, and Note Portion Transactions.

(2) Kimmy (D2) was integral not merely as Alan (D1)’s business partner, but as the person responsible for initially appointing Jason (D9) as director of Giant Seychelles (D13). The evidence further supports that she, together with Alan (D1), orchestrated and approved Sudjono’s appointment. Kimmy herself conceded during cross-examination that she has continued instructing Giant Seychelles (D13)’s solicitors even though Sudjono remained the nominal director. She further acknowledged that Alan (D1) and Jason (D9) periodically reported to her regarding the operations of Giant Seychelles (D13), which is inconsistent with the notion that real control over Giant Seychelles (D13) rested with Sudjono.

(3) Jason (D9), despite his purported resignation from Giant Seychelles (D13), maintained practical control over its finances. Even after stepping down formally, he was appointed as the authorised signatory of its Avia Trust account in December 2017 – an arrangement that belies any genuine intention to sever his involvement. His continued financial control suggests that his resignation was a mere formality, designed to conceal continued, behind-the-scenes influence. In fact, Jason (D9)’s evidence during cross-examination confirms that he remained apprised of, and indeed participated in, critical aspects of the Restructuring Plan.

287.In sum, because Giant Seychelles (D13) operated at the direction and under the control of Alan (D1), Kimmy (D2), and Jason (D9), their knowledge and intent must be imputed to it. Just as these three individuals clearly understood that the HFS Transaction was detrimental to REFF. Similarly, Giant Seychelles (D13) must be held to that same knowledge.

(g) SGOCO (D17)

288.SGOCO (D17) also participated directly in the HFS Transaction. As the parent company of Giant Connection (D19), it explicitly approved Giant Connection (D19)’s acquisition of HFS Limited and, in consideration, issued more than 2.9 million shares to Vagas Lane.

289.I further accept that the knowledge and actions of Vicki (D7), as a director of SGOCO (D17), should be imputed to the company itself. Consequently, just as Vicki (D7) recognized the detrimental nature of the HFS Transaction to REFF’s interests, SGOCO (D17) must similarly be held to that knowledge.

290.The Defendants respond by noting that Vicki (D7)’s knowledge should not be attributed to SGOCO group, asserting instead that the “directing mind and will” of the group remained Mr Wai, who allegedly retained overall control until the completion of the Restructuring Plan.

291.I reject that submission. As Hoffmann LJ observed in El Ajou v. Dollar Land [1994] 2 All ER 685, the identification of a company's “directing mind and will” is transaction-specific; the decisive question is whether, in the context of the particular transaction at issue, an individual “exercised powers on behalf of the company” such that their actions and knowledge are effectively those of the company itself: at p.706e.

292.In relation to the HFS Transaction – and equally, the related Paris Sky and Note Portion Transactions – there is no credible evidence evidencing that Mr Wai exercised meaningful control or influence over the SGOCO group. By contrast, Vicki (D7)’s involvement was substantial. She was the sole director of Giant Connection (D19), the principal counterparty in both the HFS and Paris Sky Transactions, and she personally executed the agreements acquiring HFS Limited and Paris Sky. Moreover, as I have found, her directorial appointment in the SGOCO group was specifically intended to facilitate implementation of the Restructuring Plan. Given her active and substantial role in the Restructuring Plan, I find that Vicki (D7) must be identified as the directing mind and will of both SGOCO (D17) and Giant Connection (D19) with respect to these specific transactions.

(h) Giant Connection (D19)

293.Giant Connection (D19) likewise participated directly in the HFS Transaction; it acted as Vagas Lane’s counterparty and received the shares in HFS Limited. As for its knowledge and belief, Giant Connection (D19) necessarily takes on that of Vicki (D7), who served as its sole director at the relevant time and thus represented its directing mind and will. For the same reasons that Vicki (D7) recognised the HFS Transaction as detrimental to REFF’s interests, Giant Connection (D19) must have as well.

(i) Iris (D4), Clara (D5), Madam Lin (D6), Elvis (D8), Bruce (D10), FAT (D11), FAH (D12), FAF (D14), Asia Group, (D15), Asia One AM (D16), SGOCO HK (D18), and Lanca (D20).

294.With respect to Iris (D4), Clara (D5), Madam Lin (D6), Elvis (D8), Bruce (D10), FAT (D11), FAH (D12), FAF (D14), Asia One Group (D15), Asia One AM (D16), SGOCO HK (D18), and Lanca (D20), there is no or no sufficient evidence before the Court suggesting that any of these Defendants participated in the HFS Transaction in any way. Nor does the evidence demonstrate that they possessed knowledge of the transaction’s purpose, its harmful consequences, or indeed any awareness that the transaction was contrary to REFF’s interests. Without such evidence, I cannot conclude that these parties dishonestly participated in this aspect of the Scheme.

D4. Paris Sky Transaction

295.The Plaintiffs’ case regarding the Paris Sky Transaction is straightforward. REFF sold Paris Sky (which held the First Asia Tower) to Iris (D4) for HK$205 million; just 10 days later, she resold the same asset to Giant Connection (D19) for HK$368.4 million, partially satisfied by CSL and BOCA shares contractually valued at over HK$310 million. According to the Plaintiffs, this rapid “flipping”, yielding Iris (D4) a gain exceeding HK$150 million, occurred at REFF’s expense, demonstrating that REFF’s initial sale substantially undervalued Paris Sky.

296.Apart from reliance on the Restructuring Plan, already rejected earlier, the Defendants also justify the Paris Sky Transaction by asserting that the HK$368.4 million resale price should not be accepted at face value, claiming the CSL and BOCA shares were effectively worthless. On this theory, Iris (D4) actually received only around HK$57 million in genuine consideration, generating no meaningful profit from the onward sale to Giant Connection (D19). The Defendants thus characterise Iris (D4)’s purported HK$150 million gain as merely “illusory”.

D4.1. The Defendants’ justifications for the Paris Sky Transaction are neither commercial nor believable.

297.I reject the Defendants’ justifications for the Paris Sky Transaction. Having already determined the Restructuring Plan was not a genuine attempt to address liquidity issues, I similarly reject the claim that CSL and BOCA shares were worthless. Instead, I conclude that the Paris Sky Transaction formed part of a dishonest scheme deliberately orchestrated to divert valuable assets from REFF and its external investors.

298.I begin by addressing the Defendants’ contention that CSL and BOCA shares lacked real value. The logical starting point is Clause 3.1 of the 2^nd Paris Sky Agreement, which explicitly identifies the consideration agreed upon by Iris (D4) and Giant Connection (D19):

“The aggregate consideration … of the Sale Share [i.e., shares in Paris Sky] to be paid by the Purchaser to the Vendor is HK$368,406,000.00 (equivalent to US$47,231,358.46) … which shall be satisfied by [among others] … the transfer of the CSL Shares [at an] agreed value of HK$126,126,000 [and] the transfer of the BOCA Shares [at an] agreed value of HK$184,842,000.”

299.The contractual language is clear and unequivocal: both parties explicitly assigned substantial values – HK$126.1 million for CSL shares, and HK$184.8 million for BOCA shares. There is no credible suggestion that this agreement was a sham, nor any allegation that Giant Connection (D19)’s directors breached fiduciary duties by paying an inflated price. Is there any evidence to contradict the parties’ plainly expressed contractual intent?

300.Nothing presented at trial shows that CSL and BOCA’s contractually assigned valuations were illusory. For example:

(1) During cross-examination, Dominic Li confirmed that the Clause 3.1 figures were derived from a 11 May 2018 valuation report from HF Appraisal and Advisory Services (“HF Valuation Report”), which attributed HK$258 million of value to CSL and HK$378 million to BOCA.

(2) Vicki (D7)’s evidence was to similar effect – she confirmed that the HF Valuation Report’s figures were based on “projections of SGOCO; they are not the appraiser’s own projection”, indicating that the SGOCO group itself regarded CSL and BOCA as highly valuable – a statement rendering it difficult for them to resile from that position now.

(3) When Alan (D1) – who was unquestionably the driver of the Paris Sky Transaction – was challenged on whether shares in CSL or BOSCA were transferred to Iris (D4) at an “inflated value”, he emphatically denied it (“no, no, no”), adding that the valuation was “of course” genuine.

(4) Equally telling, Alan (D1) admitted under cross-examination that nearly a year after the 2^nd Paris Sky Agreement, he arranged for the SGOCO group to sell its remaining 51% stake in CSL to one Mr Ho Pui Lung for HK$99 million – a transaction Alan (D1) also confirmed under cross-examination as “genuine”. Even on his own evidence, therefore, CSL retained substantial value a year into the deal.

301.In response, the Defendants argue it matters little how CSL and BOCA were valued if Alan (D1) truly saw them as worthless.

302.I am unable to accept that submission. Not only did Alan (D1) testify that the valuations were not inflated, but he also claimed to have arranged for his sister-in-law, Iris (D4), to “borrow” HK$205 million to purchase Paris Sky. If in truth he deemed CSL and BOCA valueless, he would have left Iris (D4) with only HK$57 million of real value when reselling Paris Sky to Giant Connection (D19), creating a shortfall of nearly HK$150 million – to be repaid in loans. It is improbable that a sophisticated individual like Alan (D1) would force such a bad bargain on his close relative. I conclude he never believed CSL and BOCA were valueless.

303.Another significant indicator that CSL and BOCA were not worthless – or worth less than their contractually stated valuations – is the May 2018 Graval report (“Graval FAT Report”), commissioned by the SGOCO group, which valued FAT (D11) at HK$368.4 million. That valuation formed the basis for the price paid to Iris (D4) in the 2^nd Paris Sky Agreement and went unchallenged by the Defendants. In my judgment, this is consistent with the Plaintiffs’ position that the CSL and BOCA shares represented genuine and substantial value for Iris (D4).

304.For completeness, I briefly address additional arguments advanced by the Defendants aimed at undermining the value of CSL and BOCA shares:

(1) The Defendants argue that the sale of CSL and BOCA shares to Iris (D4) facilitated their divestment from the SGOCO group to effect the Reverse Takeover. But divestments regularly occur at varying prices, and the fact of divestment itself does nothing to prove the shares were without value.

(2) The Defendants also say that if Iris (D4) genuinely sought to profit by arbitrage, acquiring Paris Sky at HK$205 million and reselling it at HK$368.4 million, she would have insisted upon cash rather than accept minority equity stakes. This argument is similarly unpersuasive. Transactions sometimes involve mixed consideration; accepting shares instead of cash does not demonstrate that such shares lack value.

(3) The Defendants also rely on Iris (D4)’s disposal of her BOCA and CSL shares (in July 2018 and October 2020) to persons affiliated with Mr Wai, at nominal prices, arguing this proves the shares had no value. I disagree. The nominal sale was merely a spinout of assets under an agreed divestment plan between Alan (D1) and Mr Wai. Indeed, if BOCA and CSL were genuinely worthless, it is difficult to see why Mr Wai would bother reacquiring them. Moreover, Alan (D1) himself confirmed the genuineness of SGOCO’s May 2021 sale of its remaining 51% stake in CSL for HK$99 million – further undermining the notion that these shares were valueless.

(4) The Defendants say the consideration for the 2^nd Paris Sky Agreement had to be inflated to “satisfy” SGOCO group’s “US auditors” and to “avoid regulatory pitfalls”. I agree with the Plaintiffs that this argument is a non-starter. This consideration was calculated by reference to the HF Valuation Report, which was prepared using SGOCO’s own figures – and there is no evidence those numbers were inflated or fraudulent. Nor have the Defendants produced contemporaneous documents corroborating these “regulatory pitfalls” or audit concerns; instead, they rely on Alan (D1)’s bald assertion. As I have found Alan (D1) to be less than candid, his mere say-so alone carries little weight in dispelling the evidence that CSL and BOCA shares were credibly valued.

305.Accordingly, I find that the CSL and BOCA shares were neither worthless nor materially overstated in value and thus see no reason to depart from their contractually agreed valuations.

D4.2. The Paris Sky Transaction was a fraudulent transaction pursued contrary to the interests of REFF and its investors.

306.Once the claim that CSL and BOCA shares were “worthless” is cast aside, the dishonesty underlying the Paris Sky Transaction becomes plain. What must be underscored is that REFF sold Paris Sky to Iris (D4) for HK$205 million. Barely 10 days later, Iris (D4) proceeded to resell the same asset to Giant Connection (D19) for over HK$368 million – a substantial difference of HK$160 million that should properly have accrued to REFF. It is difficult to conceive of a legitimate commercial basis for two sales at such divergent prices within a mere two-week span.

307.Beyond the now-rejected contention that the HK$368 million paid to Iris (D4) was illusory, the Defendants have also sought to explain the price discrepancy by reference to the Colliers FAT Report, which valued First Asia Tower at approximately HK$205 million.

308.I am unable to accept that explanation. Alan (D1) and Kimmy (D2) plainly did not accept the Colliers valuation as the genuine worth of Paris Sky. Had they genuinely believed the Colliers figure, they would not have agreed, almost simultaneously, to resell the same asset for HK$368 million. Indeed, the evidence at trial unequivocally demonstrates that both Alan (D1) and Kimmy (D2) regarded First Asia Tower – and consequently Paris Sky – as far more valuable than HK$205 million:

(1) Alan (D1) admitted he was aware of a 2012 valuation by the WMH FAT Report valuing the First Asia Tower at HK$379 million, further describing that surveyor as “very independent and professional”. What is more, Alan (D1) acknowledged that SGOCO (D17)’s 2018 audited accounts, which listed First Asia Tower's value at over HK$400 million, were accurate, though he preferred to “leave it for the auditor”.

(2) Kimmy (D2) also confirmed that FAH (D12) had publicly promoted First Asia Tower as a HK$400 million asset since as early as 2015. She explained that, while promotional materials might involve minor puffery, she would never intentionally mislead investors. Her belief in the property's worth, she claimed, was derived from the WMH FAT Report.

(3) The property market between 2016 and 2018 was indisputably trending upward. Kimmy (D2) herself conceded under cross-examination that during that period “market sentiment was good” and “property prices were going up”.

(4) In the same way, Dominic Li testified that, in May 2018, Alan (D1) himself proposed increasing the consideration for Iris (D4)'s resale of Paris Sky to Giant Connection (D19) from approximately HK$220 million to around HK$360 million.

309.This evidence underscores that the architects of the Paris Sky Transaction never genuinely believed in the correctness of the Colliers FAT Report’s valuation of HK$205 million. On the contrary, their evidence unequivocally indicates that Alan (D1) and Kimmy (D2) considered the asset’s true market value to be significantly closer to HK$400 million. Despite this, they caused REFF to sell Paris Sky to Iris (D4) for a mere HK$205 million under the 1^st Paris Sky Agreement. This action is plainly averse to the interests of REFF and investors and can rightly be regarded as dishonest.

310.In determining that the Paris Sky Transaction amounted to a fraud, I also account for the lack of commercial reality in its execution.

311.First, there was a plain conflict of interest arising from Iris (D4)’s role as a nominee for Alan (D1) in effecting the 1^st Paris Sky Agreement. In particular, I find that Iris (D4) was a front for Alan (D1):

(1) Although nominally Iris (D4) was the purchaser, Alan (D1) himself provided the purchase price. According to his own evidence, which I accept, Madam Lin (D6) “loaned” the funds to Iris (D4), but that debt was immediately set off against another “loan” from Alan (D1) to Madam Lin (D6). In substance, the purchase price was funded by Alan (D1).

(2) While I accept that the money originated from Alan (D1), I do not accept that there was any genuine loan between Iris (D4) and either Madam Lin (D6) or Alan (D1). Iris (D4) was earning a modest salary of under HK$17,000 per month as a manager at Optical 88. It is inherently improbable that she could assume a loan liability of HK$205 million with over HK$200,000 in monthly interest. The more likely explanation is that Alan (D1) advanced the funds through Iris (D4) to pay the consideration for the 1^st Paris Sky Agreement on his behalf.

(3) Under cross-examination, Alan (D1) admitted that any losses from the Paris Sky Transaction would ultimately fall on him and confirmed that none of the so-called “loans” had been repaid. This sits uncomfortably with the notion of a genuine debtor-creditor relationship with Iris (D4), because in a true lending arrangement, the borrower would remain liable for repayment irrespective of the investment outcome. On the evidence, Iris (D4) was plainly nothing more than Alan (D1)’s conduit.

312.Given that Alan (D1) was the architect of the Restructuring Plan and was the principal driver for REFF’s entry into the Paris Sky Transaction, Iris (D4)’s role as his nominee rendered the 1^st Paris Sky Agreement a self-dealing arrangement, with the same controlling person behind both sides. The conflict of interest could not be more evident.

313.Indeed, Alan (D1) appeared to acknowledge that conflict. When asked on the stand why he arranged for Iris (D4) to be the buyer (rather than himself) in the 1^st Paris Sky Agreement, he candidly replied:

“Why can’t it be me? Because Sudjono – it’s a good question. Very sharp. Let me think. Why was it? Because I don’t – it seems like a conflict. When I was a marketing director at the time.”

314.This response is revealing. It demonstrates that Alan (D1) recognised that, given his position of influence over REFF, there would be a conflict for him to stand directly against REFF in the 1^st Paris Sky Agreement. Just as critically, it shows that Iris (D4) was deliberately chosen by Alan (D1) as purchaser for no reason but to mask that conflict.

315.Second, the commercial implausibility of the deal is compounded by the lack of independent safeguards when negotiating the 1^st Paris Sky Agreement. Normally, if a lower sale price favoured someone who controlled the seller and stood behind the purchaser, one would expect checks and balances – such as disinterested directors, separate legal advice, or independent valuations. None of these took place. Especially telling is that Alan (D1) arranged for REFF to commission the Colliers FAT Report. This is highly unusual while obtained by REFF (the vendor), in reality it was procured at the behest of the very individual behind the purchaser.

316.Third, no genuine negotiation over the price of Paris Sky occurred – whether under the 1^st or 2^nd Paris Sky Agreement.

317.In relation to the 1^st Paris Sky Agreement, the HK$205 million sale price mirrors Collier’s valuation exactly. This alignment is suspect. Alan (D1), who financed the transaction, was also the one who arranged for REFF to engage Colliers – and, by his own admission, learned of the HK$205 million figure from “friends inside” Colliers before the valuation was finalised. It is difficult to see how REFF could have bargained for a higher price when Alan (D1) effectively controlled both sides of the deal.

318.Stepping back, one must also ask why REFF proceeded to sell at HK$205 million in the first place. Even if the Colliers FAT Report’s valuation had been fair, those orchestrating the transaction knew that First Asia Tower – Paris Sky’s prime asset – had been valued at upwards of HK$400 million between 2012 and 2015. Given that knowledge, rushing to conclude a sale at what appears to be a 50% discount makes no commercial sense, particularly in the absence of any pressing need. While the Defendants point to the Restructuring Plan and purported liquidity concerns to justify the sale, I have already rejected those as untrue

319.In relation to the 2^nd Paris Sky Agreement, the final price of HK$368.4 million tracks the valuation from the Graval FAT Report commissioned by the SGOCO group. Iris (D4) ultimately sold Paris Sky to Giant Connection (D19) for HK$368.4 million – Graval’s valuation.

320.Far from suggesting any arm’s-length negotiation, Dominic Li’s admission under cross-examination revealed a lack of bargaining:

(1) He admitted sharing a preliminary Graval valuation of HK$360 million with Alan (D1) before the Graval FAT Report was finalised, prompting Alan (D1) to increase the sale price for the 2^nd Paris Sky Agreement by HK$140 million.

(2) As soon as Graval settled on its final valuation figure of HK$368 million, Dominic Li relayed that figure to Alan (D1), who again revised the proposed price, this time by HK$8 million, to match Graval’s final estimate.

321.If Dominic Li had genuinely represented Giant Connection (D19) or the broader SGOCO group's legitimate interests, he would not have disclosed confidential internal valuations to a counterparty across the negotiating table – particularly when such disclosure directly increased the price the SGOCO group would pay. The Defendants have offered no plausible justification for this conduct. Dominic Li’s actions defy any credible commercial rationale. In my judgment, his conduct demonstrates an absence of genuine negotiation and reinforces the inevitable conclusion: these transactions were designed to defraud REFF and its investors.

322.For completeness, I have also considered the additional arguments raised by the Defendants seeking to justify the Paris Sky Transaction. Although it is unnecessary for this Court to address each submission in exhaustive detail, I specifically reject the following:

(1) The Defendants contend that the Plaintiffs’ failure to produce a retrospective valuation for Paris Sky is necessarily fatal to their claim. I disagree. The law does not impose upon a plaintiff alleging fraudulently undervalued transactions the obligation to retroactively quantify an exact “true” valuation—particularly where, as here, compelling evidence shows that those controlling the seller did not genuinely regard the stated sale price as fair. In the present case, ample evidence demonstrates that REFF’s controllers internally valued Paris Sky around HK$400 million. Yet they sold it to a closely connected party, who promptly resold the asset for HK$368.4 million—very nearly matching REFF’s internal assessment. Viewed alongside the absence of independent safeguards, the glaring conflicts of interest, the clear arbitrage, and the lack of genuine negotiations, these circumstances sufficiently demonstrate fraud without necessitating an exact valuation.

(2) The Defendants criticise the WMH FAT Report as outdated, noting it was issued “almost six years prior to the sale”, and therefore purportedly unreliable. I reject this contention as well. The WMH FAT Report was commissioned and actively relied upon by Kimmy (D2) and FAH (D12) themselves to market First Asia Tower. Nor does the mere passage of time undermine the reliability of that valuation – particularly when the Hong Kong property market was indisputably appreciating during the relevant period. As Alan (D1) himself acknowledged, “everything is going up, 2017, 2019, 2018”.

(3) The Defendants argue there is no basis to question the Colliers FAT Report, since there is no allegation of dishonesty on the part of Colliers. With respect, this misses the point. Less than two years earlier, First Asia Tower had been credibly valued at nearly HK$400 million, and market conditions had improved substantially since. Faced with the significant discrepancy reflected by the Colliers FAT Report, a rational seller would have obtained an additional valuation or at least paused before proceeding with a heavily discounted sale. Instead, REFF pressed ahead without hesitation, despite having no real impetus – financial or otherwise – to consummate the Restructuring Plan or the Paris Sky Transaction. Ignoring such an evident red flag defies rational commercial judgment and strongly indicates the transaction was structured solely to advance the Masterminds’ interests or objectives at the expense of REFF’s investors.

D4.3. The Defendants’ involvement in the Paris Sky Transaction.

323.For the reasons set forth below, I conclude that Alan (D1), Kimmy (D2), Ricky (D3), Vicki (D7), Jason (D9), Giant Seychelles (D13), SGOCO (D17), SGOCO HK (D18), and Giant Connection HK (D19) each participated in various aspects of the Paris Sky Transaction, fully aware or believing it would harm REFF’s interests. Conversely, I find no sufficient basis to conclude that any of the remaining Defendants participated in, or were aware of, the fraudulent nature of this transaction.

(a) Alan (D1)

324.Alan (D1)’s involvement in the Paris Sky Transaction is unmistakable. During cross-examination, he acknowledged that the HK$250 million paid by Iris (D4) to REFF formed part of his Restructuring Plan and that First Asia Tower was among the “quality assets” he intended to inject into the SGOCO group. In fact, his involvement went well beyond high-level coordination of the Paris Sky Transaction:

(1) It was Alan (D1) who arranged for Iris (D4) to be placed in the chain of transactions between REFF and Giant Connection (D19). He admitted at trial that he chose Iris (D4) as he trusted her not to “run away” with First Asia Tower.

(2) Alan (D1) confirmed that he negotiated the terms of both the 1^st and 2^nd Paris Sky Agreements on Iris (D4)’s behalf.

(3) It was also Alan (D1) who procured the Colliers valuation underlying the 1^st Paris Sky Agreement’s price. According to Alan (D1)’s evidence, he learned of the valuation figure for Paris Sky even before Colliers officially issued its report. In fact, he was also the one who facilitated Iris (D4)’s payment of the purchase price under the 1^st Paris Sky Agreement.

325.As for Alan (D1)’s state of mind, I have no doubt he recognised that the Paris Sky Transaction would be detrimental to REFF’s interests. Having found that the Restructuring Plan – his creation and the justification for the Paris Sky Transaction – had no genuine commercial purpose, it follows that he knew it was merely a façade.

326.What is also significant is that Alan (D1) knew that the price that Iris (D4) paid under the 1^st Paris Sky Agreement was at undervalue:

(1) He was aware that WMH FAT Report had valued the First Asia Tower at HK$379 million in August 2012 and – in the context of a rising property market – must have recognised that Iris (D4)’s purchase price was not reflective of the property’s true worth.

(2) He negotiated the 2^nd Paris Sky Agreement with Dominic Li, in which Iris (D4) resold Paris Sky to Giant Connection (D19) at HK$368 million – a substantial markup from her earlier purchase.

327.For these reasons, I find that Alan (D1) knew that REFF had sold Paris Sky to Iris (D4) on terms detrimental to its interests.

(b) Kimmy (D2)

328.Kimmy (D2) was involved in each facet of the Paris Sky Transaction. Not only was she the director of Paris Sky until August 2018, executing the 1^st Paris Sky Agreement on its behalf, but she was also the sole director of FAT (D11), a wholly owned subsidiary of Paris Sky that held First Asia Tower, until June 2018. Her own evidence also confirmed that the Restructuring Plan was devised jointly by her and Alan (D1).

329.As for her state of mind:

(1) Under cross-examination, Kimmy (D2) accepted that the Restructuring Plan aimed to enrich her personally, and she admitted having “no idea” how it might benefit REFF. This indicates she did not genuinely believe the Paris Sky Transaction served REFF’s best interests.

(2) Kimmy (D2) also confirmed that she knew First Asia Tower had a value of around HK$400 million as early as 2016, whilst recognising that Hong Kong property prices were generally rising between 2016 and 2018. Nonetheless, she consented to selling Paris Sky to Iris (D4) for HK$205 million. When asked on the stand if she questioned Alan (D1) about this lower price, she answered, “I trusted him so I did not ask”.

330.Equally telling, Kimmy (D2) conceded in evidence that she knew Iris (D4) had paid only HK$205 million for Paris Sky and quickly resold it to the SGOCO group for HK$368 million, netting a large profit.

331.Yet when pressed on whether she knew Iris (D4) made a “handsome profit” in 10 days, Kimmy (D2) reversed course, denying knowledge of the HK$368 million resale. She attributed this inconsistency to having “delegated” the details for executing the Restructuring Plan to Alan (D1) as she was “not feeling well”. I do not accept this part of her evidence. Not only does it conflict with her prior admission, but it also contradicts the Graval FAT Report’s statement that management of FAT (D11), which included Kimmy (D2) as its director, reviewed and approved its valuation of First Asia Tower at HK$368 million. On balance, I find that Kimmy (D2) knew that Iris (D4) flipped Paris Sky for a profit exceeding HK$150 million and that the transaction was contrary to REFF’s interests.

(c) Ricky (D3)

332.Ricky (D3) also participated in the Paris Sky Transaction. His law firm, WKSS, served as the escrow agent for the parties under the 1st Paris Sky Agreement. Beyond that, Ricky (D3) also prepared the documentation enabling his wife, Iris (D4), to purchase Paris Sky under the 1^st Paris Sky Agreement, funded around HK$85 million of the purchase price, and witnessed her signature on the share transfer records for CSL and BOCA (transferred to Iris (D4) under the 2^nd Paris Sky Agreement).

333.I am also persuaded that Ricky (D3) knew that the Paris Sky Transaction undermined REFF’s interests. Having helped design the Restructuring Plan with Alan (D1), Ricky (D2) must have realised it lacked any commercial basis for REFF. What is more, Ricky (D2) had also admitted during cross examination that he prepared the paperwork for Iris (D4)’s acquisition of Paris Sky from REFF at HK$205 million (1^st Paris Sky Agreement) and acted as her solicitor in reselling it to Giant Connection (D19) for HK$368 million a mere ten days later (2^nd Paris Sky Agreement). The staggering HK$150 million price discrepancy over such a short period point, which he knew or must have known of, to the fact that he knew this arrangement could not have served REFF’s best interests.

334.In this regard, I reject Ricky (D3)’s evidence that he was unaware the Paris Sky Transaction was disadvantageous to REFF:

(1) I considered Ricky (D3)’s evidence that, in his view, the true consideration for the 2^nd Paris Sky Agreement was HK$57 million – because, he says, the CSL and BOCA shares were “worthless”. I reject this explanation for the same reasons set out above. If that were true, it would mean his wife had entered a heavily disadvantageous transaction (buying Paris Sky at HK$205 million to sell it for HK$57 million), which sits uneasily with his own claim that he “would not put” his wife in any “improper” deal. More plausibly, Ricky (D3) understood that the transaction would generate a quick profit for Iris (D4), benefiting her while harming REFF’s interests, and fabricated the notion of CSL’s and BOCA’s “worthlessness” to deflect scrutiny of the resale.

(2) I also reject Ricky (D3)’s contradictory evidence about the price of the 2^nd Paris Sky Agreement. When asked directly whether he knew Iris (D4) would resell Paris Sky to the SGOCO group – and at what price – he initially claimed awareness only of the resale itself, claiming ignorance of the exact price. This claim does not sit well with his earlier testimony that the effective consideration was HK$57 million plus two purportedly worthless companies, and that he had, as he suggested at trial, “talked to” Iris (D4) about it. If indeed Ricky (D3) discussed the consideration with Iris (D4), as he admits, it necessarily follows that he knew, and had discussed, the price set out in the 2^nd Paris Sky Agreement.

335.For these reasons, I find that Ricky (D3) knew that the Paris Sky Transaction was advanced contrary to the interests of REFF.

(d) Iris (D4)

336.Iris (D4)’s role in the Paris Sky Transaction is plain. She stood between REFF and Giant Connection (D19) and profited from the sale.

337.The real question is whether Iris (D4) knew that the Paris Sky Transaction was detrimental to REFF. By all appearances, she was relatively unsophisticated (at least compared to Alan (D1) and Ricky (D3), holding a junior position at Optical 88 with a modest monthly salary of around HK$17,000. It is improbable that she fully grasped the intricacies of the Restructuring Plan. More likely, she simply followed the instructions of those she perceived to be more knowledgeable or familiar with the plan – namely, her husband Ricky (D3) or her brother-in-law Alan (D1).

338.This aligns with the fact that none of the funds used on her behalf for the 1^st Paris Sky Agreement originated from her own resources; rather, they came from Ricky (D3) or Alan (D1). Indeed, Alan (D1) even suggested that he interposed Iris (D4) as she was trustworthy and unlikely to “bolt” with the First Asia Tower. The result is that she had no true “skin in the game” and functioned primarily as a front, with any monetary gains she made from the transaction ultimately benefiting Ricky (D3) or Alan (D1).

339.I therefore find that Iris (D4)’s role was that of a figurehead, and there is no indication before me that she understood or recognised that the Paris Sky Transaction ran contrary to REFF’s best interests.

(e) Madam Lin (D6)

340.I accept that Madam Lin (D6) participated in the Paris Sky Transaction as part of the purchase price Iris (D4) paid under the 1^st Paris Sky Agreement originated from Madam Lin (D6) at Alan (D1)’s direction.

341.Even so, I do not find that Madam Lin (D6) knew or understood that the sale was detrimental to REFF. A sale of Paris Sky is not inherently damaging to REFF; the harm lies in the undervaluation. Nothing suggests Madam Lin (D7) knew the price at which REFF sold Paris Sky or that Iris (D4) resold it at a higher figure. Nor is there evidence that she was apprised of the finer details of the Restructuring Plan. Like Iris (D4), she appears to have been insulated from these specifics by her son-in-law, Alan (D1). Indeed, Alan (D1) himself noted that money attributed to Madam Lin (D6) in the transaction came from him, through a convoluted system of loans and set-offs. I do not find Madam Lin (D6) to have appreciated the harm inflicted on REFF’s interests.

(f) Vicki (D7)

342.As for Vicki (D7), I accept that she played a clear role in the Paris Sky Transaction – as the sole director of Giant Connection (D19) she executed the 2^nd Paris Sky Agreement. It is also plain that she was a director of SGOCO (D17), which allotted over 3.8 million shares in SGOCO (D17) to Iris (D4) as consideration under the 1^st Paris Sky Agreement.

343.The remaining issue is whether Vicki (D7) knew that the Paris Sky Transaction was harmful to REFF’s interests. I find that this was so:

(1) As I have observed earlier, she was a close associate of Alan (D1) who knew she was placed in key positions within the SGOCO group to implement the Restructuring Plan. It follows that she was most likely privy to Alan (D1)’s intentions concerning the Paris Sky Transaction.

(2) I specifically reject Vicki (D7)’s evidence that she had been unaware Iris (D4) had purchased Paris Sky from REFF only 10 days prior to her dealings with Iris (D4) under the 2^nd Paris Sky Agreement. Indeed, Jason (D9) has confirmed that Alan (D1) specifically informed Dominic Li (a director of SGOCO (D17)) – and thus, by extension, SGOCO (D17)’s board, including Vicki (D7) – that Iris (D4) was interposed as an intermediary in the Paris Sky Transaction, with Giant Connection (D19) intended to be the ultimate purchaser. It is inherently improbable Dominic Li would not have relayed this information to Vicki (D7), who served alongside him on SGOCO (D17)’s board and, more critically, was the sole director of the entity that ultimately acquired Paris Sky.

(3) Equally improbable is the suggestion that none of SGOCO (D17)’s or Giant Connection (D19)’s directors conducted due diligence on a HK$368 million acquisition – especially regarding how the seller, Iris (D4), acquired Paris Sky only 10 days prior. Any director would have at least examined, or at least clarified, the background and previous purchase price. It strains belief to suggest Vicki (D7) remained ignorant of Iris (D4)’s very recent purchase at a much lower cost, given her close relationship with Alan (D1).

344.I therefore find that Vicki (D7) was aware that Iris (D4) acquired Paris Sky at a huge discount and appreciated the harm to REFF’s interests arising from the resale to Giant Connection (D19) at a premium.

(g) Jason (D9)

345.Jason (D9) played a role in the Paris Sky Transaction. He admitted preparing the sale documents for Paris Sky’s disposal to Iris (D4) after he had been replaced by Sudjono as director of Giant Seychelles (D13). Despite no longer holding a directorial post at Giant Seychelles (D13), he remained the sole signatory for REFF’s escrow account with WKSS, into which Iris (D4)’s HK$205 million payment was deposited.

346.Concerning his knowledge and intent, I have little doubt that Jason (D9) grasped that the Paris Sky Transaction was adverse to REFF’s interests. He was aware that the WMH Valuation Report of 2012 placed First Asia Tower’s valuation at HK$379 million. Given the Hong Kong property market’s upward trend between 2012 and 2018, Jason (D9) must have known that selling Paris Sky at HK$205 million under the 1^st Paris Sky Agreement was plainly undervalued – yet he voiced no objections.

347.I note that Jason (D9) tried to place responsibility for the 2^nd Paris Sky Agreement on Sudjono and feigned ignorance of the ultimate resale price Iris (D4) received from the SGOCO group. I find that unpersuasive. Kimmy (D2) had “delegated” him to facilitate the Restructuring Plan, and he must have known that REFF’s sale of Paris Sky to Iris (D4) would be followed by a further resale to Giant Connection (D19) under the 2^nd Paris Sky Agreement. Indeed, Jason (D9) admitted under cross-examination that he knew Iris (D4) was inserted into the Paris Sky Transaction merely as an intermediary, with the SGOCO group as the actual intended purchaser. In these circumstances, I do not accept that Jason (D9) remained unaware of Iris (D4)’s imminent and profitable resale, or of its negative implications for REFF’s interests.

(h) Bruce (D10) and Asia One AM (D16)

348.There is no evidence tying Bruce (D10) or Asia One AM (D16), where Bruce (D10) served as the sole director, to the Paris Sky Transaction. The Plaintiffs point out that a portion of the funds used for this transaction can be traced back to Asia One AM (D16). In my judgment, however, this connection is too tenuous. The funds in question traversed a circuitous path: originating from Asia One AM (D16), flowing sequentially through Lanca (D20), Alan (D1), Ricky (D3), Madam Lin (D6), and finally reaching Iris (D4). Nothing in the evidence convincingly demonstrates that these indirect and multi-layered transfers were necessarily designed to fund the 1^st Paris Sky Agreement. I am unable to find that Bruce (D10) or Asia One AM (D16) participated in the Paris Sky Transaction. For the same reason, I also find insufficient evidence to establish that either knew or appreciated the harmful nature of this transaction to REFF’s interests.

(i) FAT (D11)

349.Nor do I find FAT (D11) participated in the Paris Sky Transaction. Once again, the Plaintiffs cite a trail of funds flowing from FAT (D11) to Madam Lin (D6) and Hung Lee Development Limited. Yet this proves little; there could be many explanations for such transfers, and the mere fact that some fraction of the money reached Iris (D4) for the Paris Sky purchase does not establish that these funds were originally intended to finance the purchase price under the 1^st Paris Sky Agreement.

(j) Giant Seychelles (D13)

350.Giant Seychelles (D13), as the sole director of REFF, caused REFF to approve the 1^st Paris Sky Agreement and executed it on REFF’s behalf. For the same reasons above, I also find that the knowledge of Alan (D1), Kimmy (D3), and Jason (D9) – as its directing mind and will – can be imputed to the company. So, just as they recognised that the Paris Sky Transaction was detrimental to REFF, so was Giant Seychelles (D13).

(k) SGOCO (D17)

351.SGOCO (D17) participated in the Paris Sky Transaction – its board had approved the acquisition of Paris Sky through Giant Connection (D19) and issued over 3.8 million shares to Iris (D4) as consideration for the Paris Sky Transaction. I also accept that the knowledge of Vicki (D7) can be imputed to SGOCO (D17) so just as she recognised that the Paris Sky Transaction was detrimental to REFF so too did SGOCO (D17).

(l) SOGOCO (D18)

352.SGOCO HK (D18) participated in the Paris Sky Transaction by transferring a 49% interest in CSL and a 48.9% interest in BOCA to Iris (D4) as consideration for Paris Sky. I also accept that Vicki (D7)’s awareness is imputed to SGOCO HK (D18), so just as she acknowledged the transaction’s detriment to REFF, so did SGOCO HK (D18).

(m) Giant Connection (D19)

353.Giant Connection (D19) was a counterparty in the 2^nd Paris Sky Agreement. I further agree with the Plaintiffs that the knowledge of its sole director – Vicki (D7) – may be imputed to Giant Connection (D19), so just as she recognized that the Paris Sky Transaction was harmful to REFF, so too did Giant Connection (D19).

(n) Clara (D5), Elvis (D8), FAH (D12), FAF (D14), Asia Group (D15), and Lanca (D20)

354.As to Clara (D5), Elvis (D8), FAH (D12), FAF (D14), Asia One Group (D15), and Lanca (D20), there is no evidence indicating their involvement or participation in the Paris Sky Transaction. Given their complete absence from this transaction, I am unable to conclude that they contributed to this aspect of the Scheme. Likewise, there is insufficient evidence to establish that these Defendants knew or appreciated that the Paris Sky Transaction harmed REFF’s interests. I therefore find that they did not participate dishonestly in this portion of the Scheme.

D5. Note Portion Transaction

355.The Plaintiffs say that the Note Portion Transaction was the capstone of the Scheme. In their account, Madam Lin (D6) – Alan (D1)’s mother-in-law – first acquired the Convertible Note from SGOCO (D17) at its face value of around HK$45 million. She then resold a portion of this note (i.e., the Note Portion), with a face value of around HK$18 million, to REFF for a price of HK$251 million. They also say that even the HK$18 million face value is itself inflated, being premised on a US$20 per share valuation of SGOCO (D17). In reality, SGOCO’s shares were trading at around US$1, or just 5% of the conversion price. On this view, the Note Portion Transaction not only grossly enriched the Masterminds but also underscored the fraudulent nature of the Scheme.

356.The Defendants respond as follows:

(1) First, they submit it is wrong to compare the acquisition price that Madam Lin (D6) paid SGOCO (D17) with what she received from REFF. They suggest Madam Lin (D6) got a special “philanthropist’s discount” from SGOCO (D17) because her renowned charitable pursuits are said to confer market credibility on the company. This, they say, account for why Madam Lin (D6) paid less than what she eventually sold it for.

(2) Second, as for the sale price, the Defendants say REFF’s aim was to lift the overall weighted average price of shares in SGOCO (D17) to US$6.50 per share (derived from SGOCO (D17)’s net asset value, minus a liquidity discount). Having bought 2.9 million shares in the Hau Fook Transaction at just US$1.14/share, REFF decided to pay US$20/share for the Note Portion to raise the average to the US$6.50 target.

357.For the reasons below, I reject the Defendants’ justification for the Note Portion Transaction. In my view, the Note Portion Transaction was an obvious fraud pursued at the expense of REFF and its investors.

D5.1. The Defendants’ justifications for the Note Portion Transaction are neither commercial nor believable.

358.Neither of the Defendants’ justifications are believable.

359.I reject the “philanthropist’s discount”. There is no cogent evidence that SGOCO (D17), the issuer of the Convertible Note, offered Madam Lin (D6) a lower price on account of her reputation. Dominic Li’s evidence was that “the board had no reason to veto” her investment; that is far away from the notion that SGOCO (D17) courted her for philanthropic prestige, let alone offered a discount.

360.Alan (D1)’s evidence is also inconsistent with any discount being given. He claimed in his witness statement that Madam Lin (D6) “had to pay such a high premium” for the shares. At trial, Alan (D1) doubled down, going so far as to suggest that “even this philanthropist bought at 40 per cent premium, at 40 per cent premium from the market, let’s say it’s sitting on 90 cents or $1, and then this lady buying at $1.50, so this would really send a positive signal”. I therefore see no credible basis for attributing Madam Lin (D6)’s extraordinary HK$232 million profit to some artificial philanthropic discount arising from her social standing. I accept that, on occasions, a blue chip “cornerstone investor” might be given a slightly better price when acquiring a company’s pre-IPO shares – but that is a far cry from what is alleged to have happened here.

361.Nor does the “weighted average” theory hold water. The suggestion that REFF would deliberately “average up” its acquisition cost in SGOCO (D17) shares to a contrived target is not credible

362.A rational buyer seeks to minimise its purchase price, not to inflate it. Paying well above market (indeed, many times over) simply so the blended average hits a self-imposed figure is unpersuasive. In my judgment, the very fact that such an improbable rationale is advanced to justify REFF’s extravagance towards Madam Lin (D6) reinforces my view that this was no more than an attempt to defraud REFF.

363.In addition, the “weighted average” proposition was not consistent with what was pleaded in their Defence:

(1) In his Defence, it was pleaded that the “consideration for the sale” of the Note Portion was calculated based on “US$20 per share” as Madam Lin (D6) had sold another portion of the Convertible Note to Giant Seychelles (D13) at the same price in May 2018. In his pre-trial witness statement, Alan (D1) added that US$20/share was chosen because Sudjono believed in the Restructuring Plan and expected SGOCO’s share price to appreciate. Nowhere in the statement was there any mention of a “weighted average” methodology.

(2) Only at trial did Alan (D1) claim that US$20 per share was devised so REFF could “average up” its costs in SGOCO (D17) shares to US$6.50 per share, factoring in the earlier US$1.14/share acquisition in the HFS Transaction. He also asserted that the Giant Seychelles (D13) consideration was set by referencing this US$20 figure to ensure price “alignment”.

364.I agree with the Plaintiffs that Alan (D1)’s evidence is plainly inconsistent. His Defence initially attributed US$20/share conversion price in the Note Portion Transaction to the fact that Madam Lin (D6) sold another portion of the note to Giant Seychelles (D13) on similar terms – a price supposedly underpinned by Sudjono’s optimism in the Restructuring Plan. By contrast, at trial Alan (D1) shifted his position, insisting that the US$20 figure was intended to “average up” REFF’s share cost to US$6.50 and denying any causal link between the Note Portion Transaction’s price and Giant Seychelles (D13) – reversing the logic. In light of this contradictory evidence and based on inherent probabilities, I reject the “weighted average” thesis as being a genuine rationale for REFF to enter into the Note Portion Transaction.

365.I therefore find the Defendants’ justifications for their price arbitrage in the Note Portion Transaction to be untrue. I do not accept that Madam Lin (D6) obtained the Convertible Note at a philanthropist’s discount. Nor do I find their profits explicable by an attempt to average up REFF’s costs for acquiring shares in SGOCO (D17).

D5.2. The Note Portion Transaction was a fraudulent transaction pursued contrary to the interests of REFF and its investors.

366.With both justifications discredited, the position is clear: Alan (D1), acting through Madam Lin (D6), reaped over HK$200 million in a brief buy-and-resell manoeuvre. The plain speed and size of her gain – some HK$232 million – would be unattainable in any genuine transaction.

367.Five further hallmarks of dishonesty reinforce this conclusion.

368.First, the gross overpayment. REFF paid over HK$250 million for a Note Portion with a HK$18 million nominal value.

369.The Defendants say the Note Portion’s “true” value lay in the prospect of converting it into valuable SGOCO (D17) shares. I am unable to accept that submission. In my judgment, the Note Portion price was set by valuing SGOCO (D17) shares at US$20, a clearly inflated figure:

(1) At the relevant time, SGOCO was trading around US$1–1.30, implying REFF paid 15 to 20 times the publicly quoted price.

(2) A valuation by HK Appraisal Advisory Limited dated 31 July 2018 (“HK Appraisal Report”), which set the fair market value of the Note Portion at HK$13.4 million.

370.Second, there is no indication that the Defendants believed SGOCO (D17) shares to be worth US$20 each. Alan (D1) all but conceded that this number was contrived as a post-hoc “weighted average” device to “lift” REFF’s overall share costs to US$6.50, a target he claims was “fair”.

371.I have explained why I did not accept this account. But even if I accept this rationale, it merely confirms that Alan (D1) never genuinely valued the shares at US$20 apiece; on his own account, the price he deemed “genuine” was US$6.50. As he put it, the US$20 figure was merely an “illusion”, underscoring that it did not reflect the true value of the shares.

372.Third, I agree with the REFF’s overpayment for the Note Portion hoped to return the monies Alan (D1) used to finance the Paris Sky Transaction back to him, effectively letting him (and Iris (D4)) acquire Paris Sky along with First Asia Tower, free under the 1^st Paris Sky Agreement, then profit again by reselling it to Giant Connection (D19) at a grossly disproportionate markup under the 2^nd Paris Sky Agreement.

373.To recap the fund flows:

(1) There is no doubt that Alan (D1) was the source of funds for the 1^st Paris Sky Agreement. Under that agreement, Iris (D4) bought Paris Sky from REFF for HK$205 million, financed by Alan (D1). It was also Alan (D1) who secured the Colliers FAT Report (through his “insiders” at Colliers), which conveniently valued Paris Sky at HK$205 million.

(2) After the HK$205 million was paid to REFF, it sat with WKSS – Ricky (D3)’s law firm – pending completion of the Note Portion Transaction, under which REFF purchased the Note Portion from Madam Lin (D6) for the grossly inflated price of HK$205 million. When that transaction closed, WKSS released the HK$205 million back to Alan (D1).

374.Iris (D4) – and by extension, Alan (D1 – effectively received a full refund of the HK$205 million initially paid for Paris Sky, enabling them to pocket the entire resale proceeds under the 2^nd Paris Sky Agreement (HK$368.4 million) without incurring any net cost.

375.Fourth, there was an absence of genuine negotiation.

376.There is no documentary record, and neither Madam Lin (D6) nor REFF felt any need for independent legal or financial advice. What more likely happened was that Alan (D1) simply decided REFF must refund him the HK$205 million that he (via Iris (D4)) transferred for the Paris Sky Transaction; he did so by fixing the consideration for the Note Portion Transaction at HK$250 million (which included a cash component of HK$205 million), thereby enabling this circular flow of funds.

377.Alan (D1)’s own words at trial is consistent with this finding:

So $1 in March, [REFF] bought 3 million shares at $1, and then – because the May deal, when I arranged Iris and I prepared the 205 million cash for Iris, it’s because Lidya agreed it’s a one restructuring plan, it formed part of the restructuring plan, when I arranged 205 million cash for Iris to buy that building, … Because Lidya agreed, so I arranged that money, otherwise I would not arrange that money. And she knew that 205 million cash would buy [Madam] Lin’s note in early July.

378.This statement underlines how the Paris Sky Transaction and the Note Portion Transaction were but two sides of the same coin. Alan (D1) raised HK$205 million for Iris (D4) so that it could return to him through Madam Lin (D6)’s note “sale” – a brazen round-trip of funds at REFF’s expense. In my judgment, this circular fund flow also explains how the US$20/share figure for SGOCO (D17) was devised: reverse-engineered to ensure REFF paid exactly HK$205 million, matching the cost of the Paris Sky Transaction – rather than the far-fetched “average-up” rationale Alan (D1) put forward at trial.

379.Fifth, the timing and structure of the Note Portion Transaction is highly suspicious. If REFF wished to acquire SGOCO (D17) shares to benefit from any potential price appreciation, the straightforward approach would have been to participate directly in a share subscription from SGOCO (D17). If that for whatever reasons could not be done, the rational response would not be to use a circuitous route and paying over the odds for it. What is especially striking is that, in June 2018, SGOCO (D17) announced a rights offering enabling existing shareholders – including REFF, which by then held about 2.9 million shares following the Hau Fook Street Transaction – to subscribe for more shares at roughly US$0.99 per share. Yet, only weeks later, in July 2018, REFF instead paid Madam Lin (D6) effectively US$20 per share via the Note Portion Transaction. It is hard to see why REFF, acting prudently, would agree to pay twenty times as much. Confronted with this during cross-examination, Alan (D1) could only respond: “I didn’t force [Sudjono] to” enter into the Note Portion Transaction – this is hardly a credible answer.

380.I also do not accept the Defendants’ remaining arguments:

(1) The Defendants highlight that SGOCO’s share price reached US$29 on 12 July 2021 and remained above US$6 from July to November  2021, purportedly validating REFF’s “long-term growth strategy”. I am unpersuaded. If REFF (and those behind it) genuinely believed in SGOCO’s long-term prospects, they would not have paid a grossly inflated US$20/share rather than the contemporaneous US$0.99 rights-offering price. Paying so far above market would drastically limit any upside potential – a notion inconsistent with generating strong returns for investors. By the same logic, I reject the claim that Alan (D1), Sudjono, or Madam Lin (D6) pursued the Note Portion Transaction due to genuine optimism about SGOCO’s future. Their real objective was to reclaim the HK$205 million Alan (D1) had injected into REFF for the Paris Sky Transaction. I also accept the Plaintiffs’ point that the single-day spike to US$29 in July 2021 carries little evidentiary weight, especially considering that, from July 2018 to June 2021, SGOCO (D17)’s share price never closed above US$2.60.

(2) The Defendants next suggest that the HK Appraisal Report, which valued the Note Portion at HK$13.4 million, is unreliable as it “ignores the commercial rationale” behind the Restructuring Plan. Since I have concluded that the Restructuring Plan lacked any genuine justification – and that there was no basis for REFF to expect SGOCO (D17)'s share price to rise – this objection falls flat. I consider that the Defendants’ attack on the HK Appraisal Report rings hollow, given that REFF (under Alan (D1)’s control) commissioned it. They cannot now credibly question the qualifications of a report they themselves procured.

(3) The Defendants also suggest that, from the SGOCO group’s standpoint, the Note Portion Transaction was entirely irrelevant to it because all SGOCO (D17) did was issue the Convertible Note to Madam Lin (D6), which is “not inherently harmful to REFF”. I disagree. The Convertible Note was a linchpin of the Restructuring Plan, enabling Madam Lin (D6) to exploit a price arbitrage and creating the pretext for routing the funds for the Paris Sky Transaction back to Alan (D1). Whether this alone suffices to establish conspiratorial liability on the SGOCO group’s part depends on the extent of its knowledge and involvement – an issue I will come back to below.

D5.3. The Defendants’ involvement in the Note Portion Transaction.

381.For the reasons below, I find that Alan (D1), Kimmy (D2), Ricky (D3), Vicki (D7), Jason (D9), Giant Seychelles (D13), Asia One AM (D16), SGOCO (D17), SGOCO HK (D18), and Lanca (D20) each participated in various aspects of the Note Portion Transaction, fully aware that it was detrimental to REFF’s interests. Conversely, I find no sufficient evidence establishing that any of the remaining Defendants participated in, or possessed knowledge of, the fraudulent nature of this transaction.

(a) Alan (D1)

382.Alan (D1)’s role in the Note Portion Transaction is plainly substantial. He accepted in cross-examination that the Note Portion and Paris Sky Transactions amounted to “one deal”, explaining that “otherwise I would not prepare that money”. From the outset, Alan (D1)’s plan was to reclaim the HK$205 million he had paid to REFF under the First Paris Sky Agreement by using it to acquire the Note Portion from Madam Lin (D6).

383.What is also significant is that, when REFF purchased the Note Portion, Alan (D1) devised the underlying valuation by assigning a US$20-per-share price to the shares in SGOCO (D17). Alan (D1) then suggested the use of the First Asia Stake as part of the consideration for Madam Lin (D6). From the high-level timing to the specific pricing, Alan (D1)’s involvement permeated every part of the Note Portion Transaction.

384.Concerning Alan (D1)’s state of mind:

(1) The Note Portion Transaction formed a cornerstone of the Restructuring Plan, which I have found to lack any genuine commercial purpose. Since the Restructuring Plan was Alan (D1)’s own creation, it follows that he knew or must have known there was no legitimate basis for pursuing it.

(2) Alan (D1) knew that pricing SGOCO (D17) shares at US$20 grossly overstated their value – a valuation method he himself devised, acknowledged to be illusory. By his own admission, Alan (D1) also recognised the Note Portion Transaction would saddle REFF with an unrealised loss.

(3) Alan (D1) accepted that valuing SGOCO (D17)’s shares at US$1.50 represented an over 40% premium relative to the market. Elevating that to US$20 made it disproportionate.

385.I therefore conclude that Alan (D1) knew and believed that the Note Portion Transaction was detrimental to REFF’s interests.

(b) Kimmy (D2)

386.I am satisfied that Kimmy (D2) participated in the Note Portion Transaction. By her own evidence, both Alan (D1) and Jason (D9) also kept her updated on the Restructuring Plan’s key developments – which included the Note Portion Transaction. Indeed, she also admitted to having delegated to Jason (D9) the task of implementing the Restructuring Plan (including releasing the HK$205 million from REFF’s WKSS escrow account to Madam Lin (D6) as cash consideration for the Note Portion).

387.As for her state of mind, I find that Kimmy (D2) knew the Note Portion Transaction was detrimental to REFF’s interests. During cross-examination, she accepted that the Note Portion Transaction was “for restructuring”, and in light of her evidence indicating the Restructuring Plan was meant to enrich her – and her inability to identify any upside for REFF – I am satisfied that she recognized its detrimental effects on REFF.

388.I have also considered Kimmy (D2)’s claim during cross examination that she did not concern herself with REFF’s payment of HK$205 million for the Note Portion because “I don’t care how he got the money”. I reject that explanation. It is undisputed that, following REFF’s HK$205 million payment, Kimmy (D2) received HK$127 million from Alan (D1) – funds that originated from Madam Lin (D6)’s sale of the Note Portion to REFF. It is inherently improbable that someone so deeply involved in orchestrating the Restructuring Plan would not ask or investigate where such a large sum originated. Her professed indifference is inherently unlikely. The more probable scenario is that she acceded to the Note Portion Transaction, fully aware it would ultimately benefit her.

(c) Ricky (D3)

389.Ricky (D3) also participated in the Note Portion Transaction. Not only was he instrumental in planning the Restructuring Plan with Alan (D1), but Ricky (D3) also – in his capacity as escrow agent for REFF – released HK$251 million held at WKSS to Madam Lin (D6).

390.I further accept that Ricky (D3) played a role in arranging Madam Lin (D6)’s initial acquisition of the Convertible Note. The funds-flow evidence shows that in March 2018, Lanca (D20) borrowed HK$45 million from CITIC, then paid that sum to a joint account belonging to Ricky (D3) and Alan (D1). From there, the money was transferred to Madam Lin (D6) to enable her purchase of the Convertible Note. This purchase served as a precursor to the Note Portion Transaction; without Madam Lin (D6) holding the original Convertible Note, she could not resell any portion of it to REFF at an inflated price.

391.As for Ricky (D3)’s state of mind, I find that he was aware that the Note Portion Transaction was contrary to REFF’s interests:

(1) He admitted knowing that REFF acquired the Note Portion for HK$251 million, valuing SGOCO shares at US$20 each, even though Madam Lin (D6) bought the entire Convertible Note for just HK$45 million three months earlier. Indeed, he assisted her in that April 2018 purchase at US$1.50 per share, acknowledging under cross-examination that “I knew at that time Madam Lin purchased the convertible note at face value but was selling it to REFF for $20 per share”.

(2) He conceded he knew of SGOCO (D17)’s forthcoming rights offering, which would have permitted REFF to obtain shares at a more attractive price. I reject his claim that the Note Portion Transaction needed to be consummated first because it offered REFF a quicker route to acquire SGOCO (D17) shares. As explained above, no urgency existed for the Restructuring Plan – its purported liquidity and share-price motivations were illusory. REFF could have waited for the rights offering if it had truly desired more favourable terms.

392.In any event, given that Ricky (D3) devised the Restructuring Plan with Alan (D1) and knew the Note Portion Transaction was part of it – while also guiding his wife, Iris (D4), through executing the Paris Sky Transaction – it is improbable that he remained ignorant of the details of these two transactions, or that they were effectively interconnected. More likely, in my judgment, Ricky (D3) recognised that he and Alan (D1) could benefit from the Note Portion Transaction, for it facilitated the refund of the HK$205 million initially paid by Iris (D4) for acquiring Paris Sky.

(d) Iris (D4)

393.As for Iris (D4), the Plaintiffs highlight that the monies Madam Lin (D6) received under the Note Portion Transaction ultimately went to Iris (D4), who then used them to subscribe for additional shares in SGOCO (D17). As I have explained earlier, I do not believe Iris (D4) fully appreciated what was transpiring. She appears to have placed trust in her husband, Ricky (D3), and her brother-in-law, Alan (D1), lending her name and banking facilities to carry out the Paris Sky Transaction and Note Portion Transaction without understanding how they intertwined with the Restructuring Plan or whether they served REFF’s interests. I therefore decline to find that she knew that the transaction was detrimental to REFF.

(e) Madam Lin (D6)

394.Madam Lin (D6) was indisputably a participant in the Note Portion Transaction, given that she sold the Note Portion to REFF.

395.However, I am not persuaded that she knew or believed this transaction harmed REFF’s interests. She appeared to play no role in setting the price for which the Note Portion was sold to REFF. As Alan (D1) confirmed under cross examination, the US$20/share valuation was his own creation, with no input from Madam Lin (D6). As is the case for Iris (D4), it is more likely Madam Lin (D6) simply lent her support to Alan (D1) without investigating into the transaction’s complexities. Alan (D1) confirmed as much during cross-examination, noting that Madam Lin (D6)’s involvement was necessary as he needed “to use her profile to go in for the stake, to increase the stake in the stake in the target company”.

396.I therefore decline to find that Madam Lin (D6) knew that the Note Portion Transaction was contrary to REFF’s interests.

(f) Vicki (D7)

397.Vicki (D7), as a director of SGOCO (D17), facilitated the issuance of the Convertible Note to Madam Lin (D6) – a necessary precursor to the Note Portion Transaction. I reject the suggestion that issuing the Convertible Note to Madam Lin (D6) is somehow distinct from her subsequent resale of the Note Portion to REFF; both transactions were closely intertwined. As I have explained above, the Note Portion Transaction was structured in a way to lend Alan (D1) a pretext to recoup the HK$205 million he had previously paid to REFF for the Paris Sky Transaction – effectively having REFF return these funds to him (via Madam Lin (D6)) at a grossly overvalued price. This scheme would not have succeeded absent the initial issuance of the Convertible Note.

398.As for Vicki (D7)’s knowledge and involvement:

(1) As I have explained earlier, she was plainly installed as a director in SGOCO’s entities and entrusted with Alan (D1)’s plans to implement the Restructuring Plan. She must have appreciated that the Note Portion Transaction was not a genuine commercial transaction; it was designed so that Alan (D1) could recover the more than HK$205 million he had previously injected into REFF for the Paris Sky Transaction.

(2) Tellingly, when asked why Madam Lin (D6)’s “investment” had to be structured as a Convertible Note rather than an allotment, Vicki (D7) gave no explanation. Nor is there any evidence of genuine discussion or negotiation between Vicki (D7) (or other SGOCO directors) and Madam Lin (D6) on the note’s pricing. In my judgment, she could not have failed to suspect that this arrangement lacked commercial logic.

399.I have also considered Vicki (D7)’s evidence at trial that she did not know Madam Lin (D6) resold the Note Portion, or that Madam Lin (D6) was, in fact, Alan (D1)’s mother-in-law. I find this incredible. By the time of the Note Portion Transaction, Alan (D1) had acquired nearly two million shares in SGOCO (D17), making him a substantial shareholder. It defies belief that none of SGOCO (D17)’s directors, including Vicki (D7), knew that Madam Lin (D6) was connected to a major shareholder, or that she would soon profit from reselling part of the Note to another connected party, Iris (D4). Indeed, Dominic Li – another SGOCO (D17) director – testified (credibly, in my judgment) that he discussed “the issue of the convertible note regarding Madam Lin” with Alan (D1) and accepted that “everything was to do with Alan Sun”. It is improbable that Dominic Li would not have discussed or shared such information with Vicki (D7), a fellow SGOCO (D17) director and a nominee put in place by Alan (D1).

400.In my judgment, the timing and mechanics of the Note Portion Transaction, taken together with Vicki (D7)’s role as Alan (D1)’s nominee director, suggest that she likely knew the Note Portion Transaction was a coordinated scheme to induce REFF to overpay for the Note Portion, thus returning to Alan (D1) (through Madam Lin (D6)) the monies he had paid (through Iris (D4)) in the Paris Sky Transaction.

(g) Jason (D9)

401.As for Jason (D9), the evidence leaves no doubt that he played an active role in the Note Portion Transaction. He controlled the escrow account that facilitated the payment of HK$205 million back to Alan (D1), serving as consideration for the Note Portion. Moreover, Jason himself admitted participation in critical discussions between Alan (D1) and Sudjono concerning the pricing of the SGOCO stake at US$20 per share.

402.As for his state of mind, I am also satisfied that he was fully aware that the Note Portion Transaction was contrary to REFF’s interests:

(1) His explanation – that he considered pricing shares in SGOCO (D17) at US$20 per share as “fair” as it would elevate the weighted average cost to roughly “US$6-7 per share” – is inherently implausible. A rational buyer in REFF’s position would unquestionably aim to minimise, rather than inflate, its acquisition costs. It defies logic that Jason (D9) would genuinely believe REFF's interests were advanced by voluntarily paying several times above market value to achieve some arbitrary, self-imposed weighted average. In my view, this evidence amounts to little more than parroting Alan (D1)’s own rationale for the overpayment, revealing Jason (D9)’s lack of independent judgment.

(2) Jason (D9) admitted at trial that he knew Madam Lin (D6) had acquired the entire Convertible Note for only HK$45 million just three months earlier, yet REFF was now purchasing merely a portion of this note – the Note Portion – for HK$251 million. It is improbable that an individual with Jason (D9)’s knowledge could genuinely perceive such an arrangement as beneficial to REFF. The magnitude of the price discrepancy and the brevity of the intervening period could not have escaped his notice as highly irregular.

(3) I also agree that Jason (D9) was fully aware that the proceeds REFF used to buy the Note Portion originated from Iris (D4), who had herself received those funds from Alan (D1) via the Paris Sky Transaction. On balance, the evidence indicates that Jason (D9) understood the true nature of the Note Portion Transaction: it was nothing more than a device to funnel money back to Alan (D1), effectively refunding the payment he had previously made in the Paris Sky Transaction. In short, Jason knew the transaction was not structured to benefit REFF, but rather to facilitate the conspirators' self-dealing objectives.

(h) Bruce (D10)

403.So far as Bruce (D10) is concerned, I accept that he played a role in the Note Portion Transaction. As CEO of Asia One AM (D16), he oversaw the financing of Madam Lin (D6)’s acquisition of the Convertible Note. However, I do not find that Bruce (D10) knew or believed this transaction would harm REFF’s interests. No evidence suggests he was aware of the Restructuring Plan or that Madam Lin (D6) would resell the Note Portion to REFF at a grossly inflated price. I decline to find that Bruce (D10) understood the Note Portion Transaction to be detrimental to REFF.

(i) Giant Seychelles (D13)

404.Giant Seychelles (D13) was involved in the Note Portion Transaction. In its capacity as the sole director of REFF, it procured REFF’s acquisition of the Note Portion from Madam Lin (D6) at a price vastly exceeding any reasonable market value. For the reasons already given, the knowledge of Alan (D1), Kimmy (D2), and Jason (D9) – who collectively represented the true directing mind and will of Giant Seychelles (D13) – must be imputed to it. Just as these individuals understood clearly that the Note Portion Transaction was structured to REFF’s detriment, Giant Seychelles (D13), through their agency,

(j) Asia One AM (D16)

405.With respect to Asia One AM (D16), I accept that it played a substantial role in the Note Portion Transaction by financing Madam Lin (D6)’s purchase of the Convertible Note. Although I have found that Bruce (D10), the sole director of Asia One AM (D16), likely did not recognize the transaction’s effects on REFF, the Plaintiffs argue that Kimmy (D2)’s knowledge should be imputed to Asia One AM (D16). On this point, I agree. The evidence indicates that Bruce (D10) took all his instructions from Kimmy (D2), and it seems implausible that any major decision, such as lending funds to Madam Lin (D6) for acquiring the Convertible Note, could have occurred without her approval.

(k) SGOCO (D17)

406.As for SGOCO (D17), the analysis can be briefly dealt with. The company played a significant role by issuing the Convertible Note to Madam Lin (D6) – a critical step preceding the Note Portion Transaction. I also accept that the knowledge of its director, Vicki (D7), can be imputed to SGOCO (D17). Thus, just as Vicki (D7) recognised the Note Portion Transaction as detrimental to REFF, so too did SGOCO (D17).

(l) SGOCO HK (D18)

407.SGOCO HK (D18) likewise played a substantial role in facilitating the Note Portion Transaction by receiving the purchase price paid by Madam Lin (D6) into its bank accounts. I also accept the knowledge of its director, Vicki (D7), may be attributed to SGOCO HK (D18). Accordingly, just as she understood the Note Portion Transaction to undermine REFF’s interests, so did SGOCO HK (D18).

(m) Lanca (D20)

408.I accept that Lanca (D20) likewise played a substantial role in the Note Portion Transaction, having financed Madam Lin (D6)’s purchase of the Convertible Note on 23 March 2018 at the direction of Alan (D1). I reject the Defendants’ submission that “acquiring the Convertible Note” should be viewed in isolation from its subsequent resale to REFF. It was a necessary precursor to the Note Portion Transaction and cannot be severed from Madam Lin (D6)’s eventual resale to REFF at an inflated price.

409.As for Lanca (D20)’s state of mind, its knowledge is imputed through its sole shareholder and director at the material time, Ricky (D3). Consequently, just as Ricky (D3) appreciated that the Note Portion Transaction was inimical to REFF’s interests, so too did Lanca (D20).

(n) Clara (D5), FAT (D11), FAH (D12), FAF (D14), Asia Group (D15), and Giant Connection (D19)

410.With respect to Clara (D5), FAT (D11), FAH (D12), FAF (D14), Asia One Group (D15), and Giant Connection (D19), there is no sufficient evidence demonstrating their participation in the Notes Portion Transaction. Nor is there basis to conclude that any of these Defendants knew or appreciated the detrimental impact this transaction had on REFF’s interests.

D6. Other transactions that do not form part of the Scheme

411.I now turn briefly to two additional transactions that the Plaintiffs allege form part of the fraudulent Scheme designed to dissipate REFF’s assets. Upon careful consideration, I find neither transaction to have been dishonest nor part of any conspiracy to divert value from REFF:

(1) The first involves the alleged misappropriation of investment funds. Specifically, the Plaintiffs assert that Worldwide paid HK$193.7 million to Giant Seychelles (D13) for REFF participating shares, yet none of these funds ultimately reached REFF itself (“Fundraising Transaction”).

(2) The second transaction concerns Worldwide’s payment of HK$1.3 million in management fees to CES Cayman, a company alleged by the Plaintiffs to be a shell with no genuine management activities (“Management Fees Transaction”).

412.I address first the Fundraising Transaction.

413.The Plaintiffs say that payments for shares issued by REFF should logically have been received by REFF itself, rather than Giant Seychelles (D13). However, this argument disregards the specific transactional context. REFF allotted 6,400 participating shares to Giant HK upon incorporation, of which 6,309 were transferred to Giant Seychelles (D13). In 2016 and 2017, REFF issued an additional 2,800 participating shares to Giant Seychelles (D13). These latter shares were then transferred by Giant Seychelles (D13) to Worldwide, in exchange for which Worldwide paid HK$193.7 million directly to Giant Seychelles (D13). At the time Worldwide made this payment, Giant Seychelles (D13) owned the shares in question; it was thus entirely legitimate for Giant Seychelles (D13) rather than REFF to receive this consideration. The premise that the payment to Giant Seychelles (D13) constituted fraud is thus incorrect.

414.For essentially the same reasons, I reject the Plaintiffs’ related argument concerning Giant Seychelles (D13)’ subsequent use of these funds. Specifically, the Plaintiffs object to Giant Seychelles (D13)'s onward payment of HK$200 million, derived from Worldwide’s initial payment, to FAF (D14) – a transaction characterised by the Plaintiffs as part of a fictitious lending arrangement. I find this argument similarly unpersuasive. Having concluded that Giant Seychelles (D13) lawfully received the HK$193.7 million as consideration for the participating shares, it necessarily follows that these funds belonged exclusively to Giant Seychelles (D13). Once ownership of these funds is properly established, further scrutiny into their subsequent deployment becomes unnecessary and inappropriate. Thus, whether Giant Seychelles (D13)’s payment to FAF (D14) was genuine or artificial is legally immaterial.

415.Turning to the Management Fees Transaction, I am unable to accept the Plaintiffs’ allegations of fraud in this regard.

416.The Plaintiffs' argument rests principally on the absence of documentary proof that CES Cayman actually provided services to Worldwide. From this evidentiary void, they infer fraud. Even accepting the Plaintiffs' contention at face value, their case of fraud does not logically follow. At most, CES Cayman's apparent failure to render contracted services as investment manager might establish grounds for a breach-of-contract or restitution claim due to lack of consideration. But mere non-performance, without more, does not equate to dishonesty or fraud.

417.In any event, there is insufficient evidence to establish that Worldwide actually paid these management fees to CES Cayman. Given that no such payment has been shown – and considering the passage of significant time – this aspect of the Plaintiffs’ case is, therefore, largely academic, and further inquiry offers little practical benefit.

418.Even so, I acknowledge troubling irregularities surrounding CES Cayman. Its appointment as a director of Worldwide raises genuine concerns. The Plaintiffs emphasise the scarcity of documentary evidence regarding Alvin Heng, CES Cayman's sole director, and the complete absence of contemporaneous records substantiating his involvement with Worldwide. They also correctly highlight that CES Cayman's name closely resembles CES Hong Kong – entities with which CES Cayman had no credible reason to associate following CES Hong Kong’s resignation as Worldwide's investment manager. Such naming similarity suggests an effort to lend credibility through confusion, if not an attempt to mislead third parties outright. Furthermore, neither Alan (D1) nor Ricky (D3) convincingly demonstrated Alvin Heng’s qualifications or relevant experience sufficient to justify his role as a legitimate investment manager. Despite these irregularities, the Plaintiffs have not satisfied their evidentiary burden to prove that either the Fundraising Transaction or the Management Fees Transaction was dishonest, fraudulent, or otherwise part of a conspiracy to dissipate REFF’s assets. Accordingly, I conclude that neither of these transactions forms part of the fraudulent Scheme alleged.

419.The conclusion above raises a further issue: whether my finding that these particular transactions do not form part of the fraudulent Scheme necessarily undermines the Plaintiffs’ broader claim of conspiracy.

420.The Defendants argue that it does, relying on a so-called “domino effect” theory: they contend that if Plaintiffs fail to prove dishonesty in any one transaction alleged within a unified conspiracy, the remainder of their conspiracy claim must fall as well, citing Rix LJ’s observations in JSC v. Ablyazov (No. 8) [2013] 2 All ER 515 at §52.

421.I am unable to accept this argument. A simple analogy illustrates its flaw. Suppose three individuals conspire to rob Bank A on Day 1 and Bank B on Day 2. If the plaintiffs fail to prove the conspiracy regarding Bank A but successfully demonstrate a conspiracy regarding Bank B, it would plainly be incorrect to dismiss the conspiracy claim entirely. The failure of proof with respect to the first bank does not logically negate proof of conspiracy with respect to the second. Nor is there any reason to insist that plaintiffs must separately plead each robbery as an independent conspiracy to salvage their case. At trial, counsel for the Luk Family Defendants contended this analogy was inapposite, arguing it did not reflect the manner in which the Plaintiffs presented their case. I disagree. The analogy captures the central point: that failing to establish a part of a broader conspiracy does not necessarily invalidate the whole.

422.Nor is it entirely obvious to me why pleading multiple sub-conspiracies – one for each of the impugned transactions alleged to be part of the Scheme – would be any fairer to the Defendants than alleging a single overarching conspiracy spanning various transactions over different periods. In either scenario, the Defendants have the same notice of the specific allegations against them. They must defend each transaction alleged to be part of the conspiracy. I disagree that pleading numerous sub-conspiracies would somehow be less burdensome or more equitable. The essential substance of the claim does not change based on whether it is characterised as one large conspiracy or multiple smaller ones. Ultimately, one is guided by what is fair in all the circumstances – again, this is necessarily a fact-sensitive exercise and depends on context.

423.Returning to the bank robbery analogy, supposing that the plaintiffs had pleaded a single conspiracy covering two days (Day 1 and Day 2) and two banks (Bank A and Bank B), the defendants are on clear notice: they must defend against allegations of robberies on both days. They cannot plausibly claim prejudice if the plaintiffs later place greater emphasis on one of those days at trial, or if the Court ultimately finds liability only for Day 2. Disaggregating the conspiracy into multiple, day-specific schemes would amount to a purely technical rearrangement, adding neither clarity nor fairness.

424.Nothing in Rix LJ’s decision at §52 of Ablyazov (No.8) (supra) changes my analysis. Counsel for the Luk Family Defendants, cites that paragraph for the proposition that if “you are considering a conspiracy claim of this sort, the court needs to be satisfied that the evidence in totality forms a net from which there is no escape. So, obviously, the point here is that the moment you have holes in this net, then the entire case is substantially impacted” (emphasis added).

425.At §52, his Lordship noted:

“It is, however, the essence of a successful case of circumstantial evidence that the whole is stronger than individual parts. It becomes a net from which there is no escape. That is why a jury is often directed to avoid piecemeal consideration of a circumstantial case (see R v Hillier (2007) 228 CLR 618, (2007) 233 ALR 634, cited in Archbold 2012 at para 10–3). Or, as Lord Simon of Glaisdale put it in DPP v Kilbourne [1973] 1 All ER 440 at 462, [1973] AC 729 at 758, ‘Circumstantial evidence … works by cumulatively, in geometrical progression, eliminating other possibilities’. “

426.It seems to me that his Lordship’s focus was thus on the accumulative strength of circumstantial evidence, not on the premise that any shortcoming in the evidence causes the entire case to collapse. The broader context of Ablyazov (No.8) (supra) was a contempt proceeding under the criminal standard of proof. In that setting, a solitary fact might be insufficient to prove guilt “beyond a reasonable doubt”, yet a series of interlocking facts, each reinforcing the others, may meet that burden, thus forming the “net from which there is no escape”. It seems to me that, in a civil conspiracy claim, it would not be correct to suggest that the plaintiff must demonstrate such an unassailable net of evidence that any weakness in one strand destroys the claim. What inferences should be drawn is always fact-sensitive, having regard to the factual matrix and context. While the Courts have set out the approach to take in specific instances and it is helpful to have regard to them, ultimately one needs to consider the actual circumstances and background of any given case.

427.I therefore conclude that the Plaintiffs’ broader conspiracy claim is not undermined by their failure to prove dishonesty in relation to the Fundraising Transaction and Management Fees Transaction.

E. THE STORY AS A WHOLE: HOW IT ALL FITS?

428.Having recounted the facts and assessed the evidence, it is helpful now to step back from the details and consider the broader landscape. Although I have found that the First Asia Transaction and the Mortgages Transactions were dishonest, it is the Restructuring Plan that stands as the core of this fraudulent Scheme. Cloaked behind fictitious claims of “liquidity issues” purportedly affecting REFF, the Masterminds – Alan (D1), Kimmy (D2), and Ricky (D3) – crafted a scheme aimed at stripping value from REFF’s assets to enrich themselves.

429.In substance, their plan involved acquiring a significant stake in the SGOCO group, negotiating with its former controlling shareholder, Mr Wai, to relinquish his control through the spin-off of CSL and BOCA, and then substituting REFF’s valuable real estate assets – the First Asia Tower and the Hau Fook Street Properties – for shares in SGOCO (D17).

430.The Defendants characterise these dealings merely as a reverse takeover. Yet, this label is entirely compatible with a fraud aimed at dissipating value. It is easy to imagine a legitimate scenario where First Asia Tower and the Hau Fook Street Properties are transferred into SGOCO at fair market value, yielding proportionate shares to REFF. Equally plausible, however, is a fraudulent scenario where those properties are deliberately undervalued, leaving REFF with only a fraction of their true worth. Both scenarios might be termed reverse takeovers, but the critical difference is unmistakable: value disappears in the latter scenario.

431.It is precisely this second scenario that occurred here. In the HFS Transaction, HFS Limited – holding valuable real estate – was sold at roughly half its original price, despite a rising property market and without evidence of genuine negotiation or adequate valuation safeguards. Similarly, in the Paris Sky Transaction, Paris Sky (holding the First Asia Tower) was sold to Iris (D4) for HK$205 million, only to be resold just ten days later for nearly HK$370 million to entities again controlled by insiders – a startling 80% premium, which should have accrued to REFF. Plainly, REFF sustained tremendous losses under the Restructuring Plan.

432.Who benefited from this depletion? Primarily Kimmy (D2) and Alan (D1). Having already secured substantial equity stakes in SGOCO (D17), both stood to gain significantly once SGOCO acquired REFF’s properties at discounted prices. Even more revealing is their leveraging of Iris (D4) and Madam Lin (D6) in the Paris Sky and Note Portion Transactions. Paris Sky was deliberately sold at undervalue to Iris (D4) for HK$205 million, then quickly resold at HK$368 million, generating substantial profit. However, the proceeds that fleetingly reached REFF were promptly redirected to Alan (D1) – through Madam Lin (D6) – via the Note Portion Transaction, in which REFF paid HK$205 million for a note worth merely HK$13.4 million. This elaborate mechanism allowed Kimmy (D2) and Alan (D1) not only to acquire Paris Sky at virtually no real cost but also to pocket the difference from Iris (D4)’s price arbitrage, realising profits exceeding HK$300 million.

433.The Defendants argue that no fraud could have occurred because the real estate ultimately ended up within a publicly listed company rather than vanishing into private, untraceable accounts. They metaphorically invoke an “empty suitcase” analogy, arguing that because the assets remain publicly visible and under regulatory scrutiny, the existence of a dishonest scheme is improbable. With respect, this mischaracterises the nature of modern fraud. What the Masterminds appropriated was not the physical real estate itself but its value. Through carefully structured transactions, they methodically diverted substantial worth from REFF into their own hands. Initially possessing assets exceeding HK$418 million, REFF ended up with only 2.9 million SGOCO shares valued at HK$26.1 million and a Note Portion nominally worth HK$18.8 million by the time of liquidation. The enormous discrepancy precisely measures the damage inflicted by the dishonest Scheme.

434.Fraud need not involve literal suitcases of cash or clandestine escapes. Sophisticated frauds routinely unfold within ostensibly legitimate, transparent structures – including publicly listed corporations. The central issue is not whether the conspirators physically absconded with funds, but whether they deliberately structured transactions to divert value from its rightful owners. Deploying a NASDAQ-listed company subject to disclosure obligations does not negate fraudulent intent. On the contrary, sophisticated schemes may well exploit precisely such reputable institutions –banks, multinational corporations, publicly traded companies – as vehicles to cloak their true motives. The appearance of legitimacy merely delays detection; history demonstrates that even the most notorious frauds have on occasions involved public companies. Regulatory oversight alone does not prevent listed entities from fraudulent conduct orchestrated by insiders.

435.For similar reasons, I reject the Defendants’ “whataboutism” – that if a fraud had truly been perpetrated on REFF, they would not have reinvested their funds (including proceeds from the Note Portion Transaction) back into the SGOCO group, but rather diverted them to anonymous offshore accounts. The crucial issue remains whether dishonest transactions diverted value from REFF’s legitimate stakeholders. That the funds ultimately ended up in a publicly listed vehicle rather than hidden elsewhere does nothing to absolve wrongdoing. Fraud is defined by the nature and purpose of the underlying transactions, not by the destination of the misappropriated value. While I of course accept that the Court should always tread cautiously when asked to infer fraud and dishonesty, where the totality of the evidence – when viewed as a whole – demonstrates this is on the facts the only plausible explanation, the Court should not shy away from making such a finding. The Court is of course not there to monitor bargains and the mere fact that a bargain may be uncommercial or that the standards of governance may have been very poor does not evidence fraud or dishonesty. Much depends on degree and extent and the actual evidence before the Court in any given case.

F. UNLAWFUL MEANS CONSPIRACY

436.Much of the law on unlawful means conspiracy is undisputed.

437.This tort consists of a combination of persons including the defendants to do something that is unlawful of itself (which may be tortious, criminal or a breach of contract) with a common intention to injure causing loss to the plaintiff: see Xiamen Xinjingdi v. Eton [2016] 2 HKLRD 1106 at §260 per Yuen JA. Despite the acceptance of this general framework, the parties dispute the manner in which each element of the tort applies.

438.I address these points in more detail below.

F1. Combination between the Defendants

439.It is not disputed that liability for conspiracy does not require an express agreement. As O’Connor LJ noted in R v. Siracusa (1990) 90 Cr App R 340, it is “usually quite impossible to establish when or where the initial agreement was made, or when or where other conspirators were recruited”. Because of this, courts may infer consent “that is agreement or adherence to the agreement” if “it is proved that he knew what was going on and the intention to participate in the furtherance of the criminal purpose is also established by his failure to stop the unlawful activity”: at p.349. Though O’Connor LJ made this remark in the context of criminal conspiracy, it also applies to the civil tort of conspiracy: see Kuwait Oil v. Al Bader [2000] 2 All ER (Comm) 271 at §111 per Nourse LJ.

440.But where the parties part company is whether a plaintiff who pleads only one conspiracy among the defendants is entitled to argue that some defendants participated only in parts of that conspiracy. The Defendants say the Plaintiffs’ “decision to limit its pleading to a single conspiracy would preclude a finding that a particular defendant was party to another unpleaded conspiracy”, citing the English High Court decision of Colliers v. Pandya [2009] EWHC 211 at §108 per HHJ Seymour QC.

441.In my judgment, the question is not whether this Court may find that a defendant was involved in “another unpleaded conspiracy” – a question that implies the existence of a second, distinct agreement not pleaded by the Plaintiffs. That is not the case here. There is no live allegation, from either side, of a separate conspiracy outside the bounds of the one pleaded. The Plaintiffs rely on a single conspiracy: the Scheme to strip value from REFF’s real estate assets, particularly the First Asia Tower and the Hau Fook Street Properties. The real issue here is not whether other conspiracies exist, but whether each of the 20 Defendants participated in the pleaded conspiracy – wholly, in part, or only during a limited timeframe.

442.It is well established that co-conspirators can join at different stages of a single conspiracy. In Kuwait Oil (supra), Nourse LJ cited Huntley v. Thornton [1957] 1 All ER 234, finding that (at §132):

“No doubt it is not necessary that all the conspirators should join at the same time, but it is I think necessary that they should know all the facts and entertain the same object.”

443.That is precisely what occurred here. The conspiracy was initially devised by three principal actors: Alan (D1), Kimmy (D2), and Ricky (D3). Over time, additional participants, including various SGOCO and First Asia entities, entered and exited the scheme. But their staggered involvement does not undermine the unity of the conspiracy. The Plaintiffs allege only one overarching Scheme: a concerted plan to strip REFF of its real estate assets. They do not rely on multiple, unpleaded conspiracies.

444.I do not accept that Pandya (supra) compels a different conclusion on the facts of the present case. There, a plaintiff employee, acting at the behest of her partner, used fabricated invoices to divert funds through a corporate vehicle, “Secure”. The English court declined to find Secure liable as a co-conspirator because its involvement post-dated the formation of the initial conspiracy. The deputy judge observed that, had a second conspiracy been pleaded, Secure might have been liable on that basis – but no such pleading had been made. In the end, the point proved academic because Secure was found liable on other grounds.

445.Properly understood, the ratio from Pandya (supra) is a narrow one: a plaintiff cannot rely on an unpleaded conspiracy. Nothing in the judgment suggests that a third party can never join an ongoing conspiracy. Indeed, the question of whether Secure could have joined the original scheme was not addressed. Instead, the deputy judge considered only whether liability might have arisen under a hypothetical second conspiracy. Consistently with this, the Court of Appeal in Kuwait Oil (supra) recognises the possibility of staggered entry and exit in a single conspiracy: see Civil Fraud (1^st ed), at §2-127. I agree.

446.That position is also consistent with basic principles of procedural fairness. The purpose of pleadings is to define the case and give fair notice. The Plaintiffs have pleaded a single, overarching conspiracy, naming each Defendant as a party. While such an approach may be open to criticism for its breadth, it does not prejudice the Defendants. Each one has been called to account for their role in the impugned transactions. It would be artificial and unfair to insist that late entrants or early departures can only be held liable through the pleading of separate conspiracies.

447.This way of thinking is also reflected in Kuwait Oil (supra). There, the plaintiffs pleaded a single conspiracy spanning several years. The trial judge found that Captain Stafford joined partway through and left before the conspiracy concluded. He held that Stafford was not liable for losses incurred before he joined (unappealed) but was liable for losses even after his retirement (reversed on appeal). Crucially, the Court of Appeal upheld the judge’s overall approach to the pleading and analysis:

“The judge approached the matter correctly in principle. He considered what agreement was made at the outset, partly by reference to the evidence about what was said at the time and partly by inference from what happened thereafter. He then asked himself whether each of the transactions which made up the four schemes was carried out pursuant to the conspiracy and concluded that the defendants were all parties to a single actionable conspiracy. He then considered whether Captain Stafford at any stage left the conspiracy. In our judgment that was the correct approach, although … we have reached the conclusion that in one important respect the judge did not correctly identify the true nature of the conspiracy and that the question whether Captain Stafford left the conspiracy did not have to be considered. We do not consider that there was any unfairness in the way that the judge approached the case or, indeed, in the way in which it was advanced at the trial. The defendants had no doubt at each stage what case they had to meet.” (Emphases added)

448.Hence, where a single conspiracy is pleaded, a court may nonetheless find that certain defendants were involved only for a limited duration. That does not require the plaintiff to plead multiple or subsidiary conspiracies. Accordingly, I disagree that the Plaintiffs ought to have pleaded separate conspiracies for late-joining or early-departing defendants.

449.Applying these principles, I find that a single conspiracy – i.e., the Scheme – was formed among three principal actors: Alan (D1), Kimmy (D2), and Ricky (D3). Their common purpose was to systematically divert value from REFF’s real properties – specifically, the Hau Fook Street Properties and First Asia Tower. These high-value holdings were stripped through a series of coordinated transactions: the First Asia Transaction, Mortgages Transaction, Hau Fook Street Transaction, Paris Sky Transaction, and the Note Portion Transaction.

450.Together, these three Masterminds directed and participated throughout the entire scheme. But their success also depended upon the assistance and involvement of several additional individuals and corporate entities, each of whom joined the Scheme at discrete intervals and participated only in specific transactions rather than the entire Scheme.

451.Although I have already addressed their respective involvement in detail in Section D, I think it would be useful to summarise the extent of these co-conspirators’ participation here:

(1) Vicki (D7), a close associate of Alan (D1), served as his nominee director across several entities – SGOCO (D17), SGOCO HK (D18), and Giant Connection (D19). Her involvement commenced at the Hau Fook Street Transaction, and she subsequently facilitated the Scheme via the Paris Sky Transaction and Note Portion Transaction. By executing these pivotal steps, she enabled the Masterminds to siphon REFF’s core assets to the SGOCO group at substantial undervalue.

(2) Jason (D9), a loyal employee of Kimmy (D2), played an indispensable role. On her direction, he reported to Alan (D1), serving as nominee director of Giant HK and later Giant Seychelles (D13) – entities which had control over REFF and its subsidiaries. Jason (D9) joined the conspiracy at the inception of the First Asia Transaction, remained engaged in the Hau Fook Street Transaction, Paris Sky Transaction, and Note Portion Transaction. I decline, however, to find that he was a party to the Scheme during the Mortgages Transaction.

(3) FAT (D11), controlled by Kimmy (D2), joined the conspiracy specifically for the Mortgages Transaction. Its involvement was confined solely to this phase of the Scheme. I decline to extend its participation beyond this discrete role.

(4) FAH (D12), similarly under Kimmy (D2)’s control, entered the conspiracy exclusively during the First Asia Transaction. It undertook a singular task of issuing the First Asia Stake to REFF. Its participation in the Scheme ceased there, and I find that its participation is limited strictly to that initial transaction.

(5) Giant Seychelles (D13), at relevant times the sole director of REFF and under the control of Alan (D1), Kimmy (D3), and Jason (D9), entered the conspiracy expressly for the limited purpose of implementing the Restructuring Plan: i.e., the Hau Fook Street Transaction, Paris Sky Transaction, and Note Portion Transaction. I decline to find that Giant Seychelles (D13) joined the conspiracy in earlier transactions, including the First Asia Transaction and Mortgages Transaction.

(6) Asia Group (D15), an entity under Kimmy (D2)’s control, joined the Scheme for the Mortgages Transaction. Its involvement was tailored to that transaction alone, and I do not find it participated in any other part of the Scheme.

(7) Asia One AM (D16), controlled at all relevant times by Kimmy (D2), participated selectively in two transactions: the Mortgages Transaction and the Note Portion Transaction. Its involvement was limited to these acts, undertaken directly at Kimmy’s behest, after which it exited the Scheme altogether.

(8) SGOCO (D17), under the control of Vicki (D7), entered into the conspiracy to implement the Restructuring Plan, including the Hau Fook Street Transaction, Paris Sky Transaction, and Note Portion Transaction. I decline to extend its involvement to any other part of the Scheme, especially those transactions that precede the commencement of the Restructuring Plan.

(9) SGOCO HK (D18), also under Vicki (D7)’s control, joined the Scheme specifically to facilitate the Paris Sky Transaction and Note Portion Transaction. I decline to attribute participation in any other parts of the conspiracy.

(10) Giant Connection (D19), yet another entity under Vicki (D7)’s control, participated in the HFS Transaction and Paris Sky Transaction. Its engagement was narrowly tailored to these discrete transactions, and no evidence compels a finding of involvement in other parts of the Scheme beyond these acts.

(11) Lanca (D20), controlled by Ricky (D3), participated in the conspiracy exclusively for the purposes of the Mortgages Transaction and Note Portion Transaction. I decline to find that it joined or participated in any other aspect of the Scheme.

452.In short, while the Masterminds (Alan (D1), Kimmy (D2), and Ricky (D3)) participated throughout the Scheme, each of the remaining co-conspirators identified above participated only selectively – joining for limited periods and specific transactions. Henceforth in this judgment, the Masterminds, together with the selectively involved co-conspirators listed above, will collectively be referred to simply as the “Conspirators”.

F2. Intention to Injure

453.It is not in dispute that the tort of conspiracy requires intent to injure. A showing of negligence or carelessness will not suffice. As Coleman J explained in Take Point v. Ngai Lok Kei [2020] HKCFI 1709 at §104, the requisite intent arises where the defendants “had actual or ‘blind eye’ knowledge” of the consequences flowing from their acts.

454.So far as the definition of blind eye knowledge is concerned, I respectfully find the guidance of Lord Scott in Manifest Shipping v. Uni-Polaris Insurance [2003] 1 AC 469 to be instructive (at §§112-116):

(1) Blind eye knowledge is akin to actual knowledge. It entails suspicion of particular facts and a conscious decision not to inquire further, precisely to avoid confirming those facts.

(2) An individual who makes an honest mistake or is simply careless cannot be deemed dishonest. But someone who deliberately refrains from asking questions, suspecting that “I ask questions and make farther inquiry, it will no longer be my suspecting it, but my knowing it”.

(3) The suspicion must be real and directed at specific facts. A defendant must have good reason to believe in the possible existence of certain facts and deliberately avoid acquiring actual knowledge of them.

455.Although there is no dispute about the test for blind-eye knowledge, the parties disagree as to whether the knowledge must extend to the unlawfulness of the conduct, or whether it suffices that the defendant knew or suspected that the conduct would injure the plaintiff’s interests.

456.Counsel for the SGOCO Group Defendants submits that a defendant must know the relevant conduct is unlawful before liability in the tort of conspiracy can attach, citing Toulson LJ’s dictum in Meretz Investments v. ACP [2008] Ch 244 at §174. The Plaintiffs counter that such a proposition is contrary to the English Court of Appeal decision in Racing Partnership v. Done Bros [2021] Ch 233, where Arnold LJ (with whom Phillips LJ agreed) rejected Toulson LJ’s dictum and overturned the trial judge’s holding that knowledge of unlawfulness is essential to establish liability in the tort of conspiracy: at §141.

457.Although I am not bound by the English Court of Appeal’s reasoning in Racing Partnership (supra), I find it persuasive. As Arnold LJ noted, Toulson LJ’s dictum turns on an analogy between the tort of conspiracy and the tort of inducing breach of contract – where a recognised defence exists if the defendant believes the conduct does not amount to a breach. But that analogy, like all analogies, is just that.

458.In my view, the two torts protect different interests and rest on different foundations. The gravamen of the tort of conspiracy lies in the agreement among multiple parties to inflict harm. As Lord Neuberger remarked in HMRC v. Total Network [2008] 1 AC 1174 at §221, “the law of tort takes a particularly censorious view where conspiracy is involved”. Lord Hope noted at §44 that the wrongdoing “resides in the fact of the conspiracy” itself. Echoing this in JSC v. Ablyazov (No.14) [2020] AC 727, Lords Sumption and Lloyd-Jones JJSC observed that the “ostensible rationale” for this tort is that “acts done in combination are inherently more coercive than those done by a single actor” and so makes unlawful “acts which would be lawful apart from the element of combination”: at §7. By contrast, the tort for inducing breach of contract is addressing the distinct wrong of interfering with a contractual relationship. As Lord Hoffmann explained in OBG v. Allen [2008] 1 AC 1 at §5 and §8, liability in that tort arises if the contracting party has committed a breach of contract; the defendant is cast as an accessory to the breach.

459.These differences matter. In the tort of inducing breach of contract, a genuine belief that no breach of contract will occur arguably negates the defendant’s fault because the wrongdoing lies in the existence of the breach itself. In the tort of conspiracy, however, the wrong is the concerted resolve to injure. Hence, a lawful-means conspiracy remains actionable even if every individual act is otherwise innocent; the law fastens on the combination. Requiring knowledge of unlawfulness would import into the tort a mens rea foreign to its purpose and, perversely, reward conspirators who convince themselves their methods are lawful.

460.The dangers of conflating legal tests across economic torts were underscored by the Supreme Court in Ablyazov (No 14) (supra) at §6, where Lords Sumption and Lloyds Jones JJSC cautioned:

“The elements of the four established economic torts are carefully defined so as to avoid trespassing on legitimate business activities or imposing any wider liability than can be justified in principle. Some of the elements of the torts, notably intention and unlawful means are common to more than one of them. But it is dangerous to assume that they have the same content in each context.”

461.I respectfully agree. One should be careful not to assume that the mental element applicable to the tort of inducing breach of contract can simply be transposed wholesale into the tort of conspiracy. Each tort must be evaluated on its own terms, with close attention to its purpose, structure, and foundations.

462.The next question is whether the Conspirators acted with the requisite intention to injure REFF – namely, whether they knew, or at least wilfully turned a blind eye to, the harm that their actions would cause.

463.On the evidence before me, the answer is plainly yes. The overriding object of the Scheme was unquestionably to divert value from REFF’s core holdings – the Hau Fook Street Properties and First Asia Tower – into the hands of the Masterminds, principally Alan (D1) and Kimmy (D2), and entities under their control. The deliberate transfer of these valuable assets could have no other outcome but injury to REFF.

464.Each of the transactions challenged by the Plaintiffs reinforces this conclusion. Consider first the First Asia Transaction: by compelling REFF to overpay significantly for the First Asia Stake, the direct and immediate result was to reduce the fund’s resources available to external investors. Turning next to the Mortgages Transaction, the creation of the UOB and CITIC mortgages placed REFF’s key capital assets directly in jeopardy of enforcement action, inherently impairing their value. Finally, the Restructuring Plan provides the clearest illustration of intentional harm. This transaction, lacking any credible commercial justification, entailed stripping REFF of assets valued in excess of HK$400 million – namely, First Asia Tower and the Hau Fook Street Properties – and replacing them with shares worth merely HK$26.1 million. Such a staggering diminution of value was not only transparently harmful to REFF, but plainly visible to and understood by each of the Conspirators.

465.Further evidence of the Conspirators’ intent is provided by the benefit each transaction delivered directly to the Masterminds.

466.As I have found above, Kimmy (D2) personally received HK$125 million in cash proceeds from the First Asia Transaction. Similarly, the mortgages secured loans directly benefiting Asia One AM (D16), an entity under Kimmy (D2)’s control. And the explicit aim of the Restructuring Plan was the wholesale transfer of REFF’s assets into the SGOCO group, a structure in which Alan (D1), his family, and Kimmy (D2) would ultimately emerge as stakeholders – obtaining substantial assets at a substantial discount. In each scenario, the enrichment of the Masterminds directly correlated with commensurate harm to REFF.

467.As noted in Sorrel v. Smith [1925] AC 700 (at p.742):

“When the whole object of the defendants’ action is to capture the plaintiff’s business, their gain must be his loss. How stands the matter then? The difference disappears. The defendants’ success is the plaintiff’s extinction, and they cannot seek the one without ensuing the other.”

468.This logic is compelling: where the purpose of the defendants’ conduct is to capture and redirect REFF’s valuable assets for their benefit, their gain is necessarily and inevitably REFF’s loss. I have no hesitation in concluding that each Conspirator had the intent to injure REFF.

F3. Unlawfulness of the Means

469.The Plaintiffs advance two species of unlawful means:

(1) The common law offence of conspiracy to defraud; and

(2) The offence of money laundering under s.25 of the Organized & Serious Crimes Ordinance (“OSCO”).

470.It is common ground that criminal offences can constitute unlawful means. Their disagreement lies in which offences qualify.

F3.1. Does a conspiracy to defraud qualify as an unlawful means?

471.The Defendants argue that conspiracy to defraud cannot serve as unlawful means here, as it is effectively identical to the civil conspiracy alleged. On this view, using the very agreement at issue as its own unlawful means collapses into circular reasoning. For the tort to hold, there must be a distinct criminal offence – something beyond the mere agreement itself.

472.Courts have long wrestled with identifying precisely which criminal offences can qualify as unlawful means. In OBG v. Allan (supra), a case addressing the related tort of causing loss by unlawful means, Lord Nicholls cautioned against an overly expansive approach, noting that not every crime qualifies. He illustrated his point with a courier service whose riders broke traffic laws to deliver packages faster than rivals, thus obtaining a commercial advantage. Though criminal, these offences were insufficient to ground liability (§160). Lord Walker concurred, presenting a similar example of pizza delivery drivers violating speed limits and traffic signals to increase business. He underscored the need for a controls to prevent unchecked expansion of what constitutes unlawful means (§266).

473.The House of Lords subsequently addressed the question squarely in Total Network (supra), a case dealing specifically with unlawful means conspiracy. Lord Walker, with whom Lord Scott agreed, reiterated that not all criminal conduct can qualify as unlawful means. He clarified that the offence must be instrumental through which conspirators intentionally cause harm (§95). His Lordship then drew upon Lonrho v. Shell [1982] AC 173 to illustrate this critical distinction. There, Shell supplied oil illegally to Rhodesia in breach of sanctions imposed by the United Kingdom following Rhodesia’s unilateral declaration of independence. Lonrho operated a pipeline serving Rhodesia, rendered idle by the sanctions. Lonrho alleged that Shell’s illegal supplies had propped up the independence regime, thereby prolonging the sanctions, indirectly causing economic loss to Lonrho. Lord Walker, however, concluded that although criminal, Shell’s sanctions violations were not the instrument chosen to harm Lonrho. Shell’s unlawful conduct, in other words, was not intentionally targeted at Lonrho but incidental to its loss: at §95.

474.Lord Mance echoed this reasoning. Referring to Lord Walker’s analysis in OBG v. Allan (supra), he again invoked the pizza delivery example: A business instructing its drivers to disregard traffic laws, thus indirectly attracting more customers to the detriment of competitors, would not attract liability for conspiracy. The traffic offences, though unlawful, were not instrumental to the competitors’ harm. They simply created conditions under which consumers preferred one service over another. Liability demands more: the unlawful act must constitute the deliberate and direct instrument of harm (§110).

475.Next in the line of cases is Ablyazov (No.14) (supra), where Lords Sumption and Lloyd-Jones JJSC noted that the offence had to be the “means by which the defendant intended the harm to the claimant”. They cited with approval the Lonrho (supra) example, noting that even serious criminal offences – such as breaches of sanctions – cannot constitute unlawful means if not intended to be employed as the instrument of harm.

476.The most recent appellate authority to consider this issue is Racing Partnership (supra):

(1) Arnold LJ proposed reframing instrumentality as essentially a question of causation, suggesting that the criminal act must directly cause the claimant’s loss rather than merely setting conditions under which harm occurs. Applying this rationale to the pizza delivery example, he suggested that competitors' losses were caused by customers choosing a faster service rather than directly from traffic violations: at §154.

(2) Lewison LJ criticised Arnold LJ’s causation-focused approach as overly inclusive. He pointed out that even in Lord Walker’s pizza-delivery scenario, the competitors’ losses could be said to have been caused by the unlawful traffic offences; nevertheless, the House of Lords plainly regarded these offences as insufficiently instrumental. Thus, Lewison LJ concluded, something more than mere but-for causation must define the contours of unlawful means: at §269.

477.Drawing these threads together, several principles emerge:

(1) Although criminal offences invariably impose universal obligations, not every criminal act will necessarily constitute actionable "unlawful means" within the tort of unlawful means conspiracy. Only those criminal offences deliberately employed as instruments to inflict harm qualify.

(2) Framing the question of instrumentality exclusively in terms of causation is analytically insufficient. As Lewison LJ explained in Racing Partnership (supra), a purely causal inquiry is underinclusive. Take Lord Walker's pizza-delivery scenario from OBG v. Allan (supra): competitors clearly suffer harm because drivers speed and ignore traffic signals – without these traffic offences, customers would not have preferred the defendants’ service. A strictly causal approach would thus render these criminal offences actionable, yet the House of Lords unequivocally rejected liability in precisely that circumstance. The Lonrho (supra) case further underscores this point. Shell's criminal breach of sanctions arguably prolonged the Rhodesian regime, indirectly causing Lonrho economic harm; yet, Lord Walker concluded that the criminal offence, though causally connected, was not instrumental. Clearly, then, causation alone is inadequate.

(3) Instead, the decisive criterion in establishing instrumentality is intention. The inquiry is whether the defendants intended the criminal offence as the deliberate means through which they inflicted harm upon the plaintiff. This formulation is aligned with Lords Sumption and Lloyd-Jones JJSC's reasoning in Ablyazov (No.14) (supra), where they noted that an offence cannot constitute unlawful means if it was "not the means by which the defendant intended the harm" (emphasis added): at §14. It is consistent with Lord Walker’s judgment in Total Network (supra), where he emphasized that the question was "what Shell and BP did not intend, rather than what Parliament did not intend" (emphasis added): at §95.

478.In my view, a common-sensical test for ascertaining the defendants’ intention in relation to the offence might be this: had the defendants been prevented from committing the criminal offence, would they have regarded their scheme to harm the claimant as a failure? Take again Lord Walker’s pizza-delivery scenario. If the pizza company were prevented from instructing drivers to break traffic laws, would it consider its competitive strategy a failure? Surely not – the company’s purpose was never to inflict har

479..m upon competitors, but rather to deliver pizzas quickly, satisfy customers, and maximize profits. Similarly, Shell, in the Lonrho (supra) scenario, would not have viewed its business strategy as having failed if prevented from illegally supplying oil to Rhodesia; its aim was profit maximisation, indifferent to collateral harm inflicted upon Lonrho.

480.Returning to the present case, the issue is whether a criminal conspiracy to defraud can qualify as actionable unlawful means. The answer follows naturally from the principles articulated above: one must ask whether the alleged criminal conspiracy was deliberately chosen as the instrumental means of inflicting harm on REFF.

481.On the facts pleaded, the criminal conspiracy to defraud is explicitly based on an agreement to execute the Impugned Transactions. Those transactions are precisely the very mechanisms through which the alleged harm to REFF was to be achieved. If the Conspirators had been unable to carry out these transactions, would they have regarded their plan as having failed? Clearly, yes – the success of the fraudulent Scheme depended upon executing transactions like the Paris Sky Transaction. Unlike the pizza delivery scenario, these transactions were not incidental, indirect, or collateral. They were the chosen instruments intended to extract value from REFF, and thus intentionally inflict harm upon it. Accordingly, the criminal conspiracy to defraud qualifies as an unlawful means.

482.For the same reason, I reject the Defendants’ case that the criminal offence of conspiracy to defraud cannot qualify as unlawful means for it replicates the civil conspiracy. Merely labelling the arrangement a “double conspiracy” restates rather than resolves the question at hand. Whether or not the criminal conspiracy is analytically distinct from the pleaded civil conspiracy is immaterial; the critical inquiry remains whether the conduct constituting the criminal offence was intentionally selected as the method by which harm was inflicted on the plaintiff. As pleaded, the impugned transactions of the Scheme forming the criminal conspiracy here were indeed intentionally and specifically chosen as the very instruments for harming REFF.

483.I am unable to accept the Defendants’ submission that the criminal offence of conspiracy, being merely an agreement, cannot itself constitute the instrumentality of harm. This proposition is incorrect in law.

484.As Lord Walker explained in Gray v. News Group Newspapers [2013] 1 AC 1, although the offence of conspiracy formally arises upon the making of an agreement, its unlawful character does not cease at that instant. Rather, conspiracy is a "continuing offence", subsisting until the conspiratorial agreement is either fulfilled, abandoned, or otherwise frustrated: at §§43-44. Acts carried out pursuant to such a conspiracy, such as the Impugned Transactions here, are integral components of the conspiracy itself. To say that conspiracy cannot inflict harm because it is "just an agreement" overlooks the continuing, operational nature of the offence. The conspiracy, properly understood, encompasses not just the initial agreement but the intentional execution of the agreed plan. It is precisely this deliberate continuing execution of the fraudulent Impugned Transactions that had inflicted harm upon REFF.

F3.2. Does a conspiracy to defraud qualify as an unlawful means?

485.The question then becomes whether the Conspirators did indeed commit the offence of conspiracy to defraud.

486.The legal elements of this offence are well settled and not in dispute. As Sir Anthony Mason NPJ stated in Mo Yuk Ping v. HKSAR (2007) 10 HKCFAR 386 (at §40), conspiracy to defraud requires proof that defendants were party to an agreement involving dishonest means either (a) with the specific purpose of causing economic loss or endangering another’s economic interests, or (b) with the clear recognition that such loss or risk would likely result. Crucially, deceit is not an essential component; dishonesty alone suffices. Dishonesty is to be assessed by the objective standards of ordinary, reasonable people, and the defendant must have subjectively realised that his or her conduct fell short of such standards (at §§28, 49, applying the Ghosh test).

487.Applying these settled principles, I find that the requirements of conspiracy to defraud are satisfied on the evidence before me:

(1) I have already concluded in Section F1 that the Conspirators entered into a single conspiracy aimed specifically at diverting value away from REFF’s core holdings for the enrichment of the Masterminds. This agreement, and the intentional cooperation of each Conspirator in its furtherance, has been established on the balance of probabilities.

(2) Likewise, for the reasons given in Section F2, each impugned transaction was designed with the intent or at least full awareness that economic harm to REFF would follow. Whether their precise subjective goal was loss itself or merely the enrichment of the Masterminds, each Conspirator unquestionably knew and understood the economic damage caused to REFF as an inevitable consequence of the Scheme.

(3) As for dishonesty, I have found no legitimate commercial justification for the First Asia, Mortgages, HFS, Paris Sky, and Note Portion Transactions. Rather, each transaction was fraudulent and dishonest. As noted, each Conspirator knew about the illegitimacy and harmfulness of these actions: they understood clearly that the Masterminds would personally profit while REFF suffered substantial economic harm. Applying the ordinary and objective standards of honest and reasonable people, their conduct was dishonest, and I similarly have no doubt that each Conspirator subjectively appreciated the dishonest nature of their participation.

488.All the required elements of the criminal offence of conspiracy to defraud are satisfied. This offence can therefore provide the requisite unlawful means for the claim in civil conspiracy.

F3.3. Is it necessary to make a finding on the OSCO offence?

489.On the other hand, I firmly decline to make findings concerning potential offences under s.25 of OSCO. Civil courts should exercise considerable restraint before venturing into findings of criminal wrongdoing, especially where such findings might affect parallel or subsequent criminal proceedings, and particularly when relevant witnesses have not fully testified before this Court, unless truly necessary. The primary responsibility of this Court in the present case is to resolve civil liability arising from unlawful means conspiracy. Having already determined that the offence of conspiracy to defraud sufficiently satisfies the element of unlawful means necessary to establish the Plaintiffs' claim, I find no legal necessity in addressing whether offences under s.25 of OSCO were committed. That question is reserved for determination in another forum, at another time, should that occasion ever arise.

F4. Proof of Loss

490.It is settled law that the tort of conspiracy is not actionable per se; actual loss must therefore be established by the Plaintiffs.

491.The crux of the present dispute concerns the specificity with which such loss must be pleaded. The Defendants contend that the Plaintiffs' pleadings lack adequate precision in enumerating each element of loss attributable to the conspiracy. In response, the Plaintiffs invoke the doctrine that damages in conspiracy claims are “at large”, suggesting a measure of flexibility in the proof and quantification of damages.

492.The concept of damages in conspiracy claims being “at large” is aptly explained by the editors of Civil Fraud (supra), who state (§2-134):

“It is often said that damages are ‘at large’ in a conspiracy claim. This expression has the potential to mislead. It is best understood as meaning that, once a claimant has discharged the burden of showing that he suffered loss as a result of the conspiracy, the Court is not limited to awarding those damages which are strictly proven. In coming to a view as to the level of damages which a defendant ought to pay, the court will consider all the circumstances of the case, including the conduct of a defendant and the nature of his wrongdoing; the exact factors going to precise assessment are not to be ‘weigh[ed] in golden scales’.”

493.In short, a plaintiff must indeed plead some actual loss yet need not strictly plead the full extent of damages claimed. Once some loss is proven, the court may, in exercising its judgment, to award damages over all loss genuinely incurred, having regard to all circumstances.

494.The question then becomes whether the Plaintiffs have sufficiently pleaded and demonstrated loss arising from the conspiracy. At trial, the Plaintiffs narrowed their damages claim to losses arising from the First Asia Transaction, the Paris Sky Transaction, and the Note Portion Transaction. Other claims relating to the Investment Funds Transaction and Management Fees Transaction have already been dismissed, as they lacked both dishonesty and sufficient nexus to the Scheme: see Section D above.

495.While the drafting of the Statement of Claim may well be said to have fallen short of exemplary clarity, a careful review confirms that losses concerning the three relevant transactions were adequately pleaded. §165 claims damages “to be assessed”, referencing assets misappropriated from REFF, and directs the reader to Section K of the Statement of Claim, which incorporates averments in Sections H through J, wherein the Plaintiffs detail the specific losses arising from each transaction. In particular:

(1) For the First Asia Transaction, §§68-77 allege that REFF purchased the First Asia Stake for HK$125 million but sold it in July 2018 for HK$45.7 million, which explicitly led to a “loss of HK$79,234,992”. Clearly, this pleads a loss exceeding HK$79 million, representing the difference between the acquisition price and the eventual sale price.

(2) For the Paris Sky Transaction, §§97-104 allege that REFF sold Paris Sky to Iris (D4) for HK$205 million, who promptly resold it to Giant Connection (D19) for HK$368.4 million – a substantially higher price, which the Plaintiffs say remain below Paris Sky’s fair value. Plainly, this pleading identifies a loss to REFF of at least HK$163.4 million, the difference between the initial sale and subsequent resale price.

(3) For the Note Portion Transaction, §§111-121 allege that REFF acquired the Note Portion from Madam Lin (D6) at over HK$250 million (comprising cash consideration of HK$205 million and the First Asia Stake at an agreed value of over HK$45 million), even though the fair market value of the Note Portion had been valued at just HK$13.4 million. In my view, this is a sufficient plea that REFF had suffered a loss of at least HK$236 million. This is bolstered by the plea that REFF paid a sum exceeding by HK$231 million the proportionate amount initially expended by Madam Lin (D6).

496.I consider that these losses have been pleaded. The Plaintiffs have set out a particularised case as to the fact of loss arising from the alleged conspiracy. Whether, and to what extent, those losses have been proved is a matter I will address when turning to the assessment of quantum in Section H. Suffice to say for now that I find that the Plaintiffs have proven their claim for loss.

G. BREACH OF DUTY AND DISHONEST ASSISTANCE

497.REFF seeks damages against various Defendants for breaches of fiduciary duties owed by its de jure and shadow directors, and for dishonest assistance in relation to those breaches.

498.Worldwide advances similar claims, alleging breaches of fiduciary duty by its de jure and shadow directors, along with dishonest assistance. But I do not consider it necessary to resolve those claims:

(1) The transactions in respect of which Worldwide have a claim for damages – namely, the Fundraising and Management Fees Transactions – were neither fraudulent nor part of the Scheme. Accordingly, the predicate for fiduciary breach does not arise.

(2) So far as the fraudulent transactions – namely, the First Asia Transaction, Mortgages Transaction, HFS Transaction, Paris Sky Transaction, and Note Portion Transaction – resulted in losses, those losses were suffered by REFF. They are not recoverable by Worldwide by the doctrine of reflective loss.

499.In the subsections below, I propose to deal with REFF’s claims by first identifying who precisely served as REFF’s shadow and de jure directors, next determining whether fiduciary duties attach to those shadow directors, then examining whether breaches of such fiduciary duties occurred, and finally, addressing whether, and by whom, dishonest assistance was provided to facilitate those breaches.

G1. Who are the de jure and shadow directors of REFF?

500.The de jure directors of REFF were Giant HK (from 25 May 2012 until 28 November 2017) and Giant Seychelles (D13) thereafter.

501.Giant HK is not a defendant in these proceedings, and Giant Seychelles (D13) served as a director only during the period of the Restructuring Plan, thus playing no role during the earlier First Asia Transaction or the Mortgages Transaction.

502.Apart from these de jure directors, the Plaintiffs also allege that Alan (D1) and Kimmy (D2) acted as shadow directors of REFF.

503.The principles of shadow directorship have been cogently summarised by Coleman J in Cyberworks v. Mei Ah [2020] HKCFI 398 at §56. Those principles, which I gratefully apply here, require consideration of whether Alan (D1) and Kimmy (D2) assumed the authority and responsibilities ordinarily attached to directors. To determine shadow directorship, I must examine whether the de jure directors surrendered independent judgment to Alan (D1) and Kimmy (D2). Put simply, a shadow director is akin to a “puppet master” whose directions the de jure directors follow without meaningful discretion.

504.I have no hesitation in concluding that Alan (D1) and Kimmy (D2) were shadow directors of REFF, exercising decisive control when Giant HK and Giant Seychelles (D13) nominally served as directors:

(1) In relation to Giant HK, its sole director at the relevant time was Jason (D9). As I had found earlier, Jason (D9) exercised no meaningful independent judgment over the affairs of REFF, particularly in relation to the First Asia Transaction. He possessed no relevant fund management experience, his background being confined to roles as a foreman, safety officer, and data administrator. Lacking expertise in financial matters, Jason (D9) was handpicked for his loyalty to Kimmy (D2). Throughout his tenure, Jason consistently acted solely upon the instructions of Kimmy (D2) – and, at Kimmy's direction, Alan (D1). Indeed, none of the critical decisions taken by Giant HK, especially the First Asia Transaction, were made without approval from Alan (D1) and Kimmy (D2). It follows, by parity of reasoning, that Alan (D1) and Kimmy (D2) also exercised complete influence over Giant HK, rendering Jason (D9) effectively their instrument.

(2) In relation to Giant Seychelles (D13), its sole director at the relevant time was Sudjono. As I had found earlier, Sudjono was installed merely as a “fall” person – an expendable positioned to take the fall in the event that the fraudulent nature of the Scheme be revealed. Like Jason (D9), I find that Sudjono demonstrated no independent judgment or discretion, dutifully executing instructions received from Alan (D1) and Kimmy (D2) in implementing the Restructuring Plan. Her lack of relevant experience or qualifications to manage a significant fund such as REFF underscores her role as a figurehead, appointed to serve as a rubber stamp for decisions made by Alan (D1) and Kimmy (D2). Thus, I conclude by parity of reasoning that Alan (D1) and Kimmy (D2) maintained, through Sudjono, control of Giant Seychelles during the entire duration of the Restructuring Plan.

505.Given the consistency with which Giant HK and Giant Seychelles (D13) acted exclusively under the direction and control of Alan (D1) and Kimmy (D2), I find on the balance of probabilities that Alan (D1) and Kimmy (D2) did indeed act as shadow directors of REFF.

G2. Do shadow directors of REFF owe fiduciary duties?

506.Having found that Alan (D1) and Kimmy (D2) are shadow directors, the question that follows is whether they owe fiduciary duties.

507.The Defendants challenge the notion that shadow directors owe fiduciary duties as a matter of course, relying on Lewison J’s decision in Ultraframe v. Fielding [2005] EWHC 1638 (Ch) at §§1279–1289.

508.In summary:

(1) Fiduciary duties should not be imposed automatically upon shadow directors. It would be anomalous to assume loyalty obligations for those whose actions and directions are persistently detrimental to the company's interests. It would be counterintuitive to impute to such an individual a duty of loyalty or to regard him as having voluntarily subordinated his own interests in favour of the company's: at §1284.

(2) Instead, Lewison J suggests an analogy to the role of a constructive trustee, who comes into possession of trust property via a “transaction by which both parties intend to create a trust from the outset” and his possession of the trust property “is coloured the first by the trust and confidence by means of which he obtained it”. Applying this analogy, fiduciary duties ought to attach only to shadow directors who deliberately and voluntarily assume direct control over the company's assets, thereby placing themselves squarely in a fiduciary role. However, Lewison J cautioned that mere indirect influence, when exercised solely to advance personal interests rather than those of the company, would ordinarily be insufficient to trigger fiduciary duties: at §§1287-1289.

(3) To illustrate this point, Lewison J gave a concrete example: a shadow director who voluntarily becomes the sole signatory on a company's bank account clearly assumes direct and voluntary control of company property. Such an individual undeniably undertakes fiduciary obligations to manage the asset for the company's benefit: at §1290.

509.It is not entirely clear why it should be thought that fiduciary duties should attach only when the shadow director assumes direct physical or transactional control over corporate assets. Take the example of a de jure director: such a director owes fiduciary duties when exercising authority indirectly through high-level strategic decisions on behalf of the company, without necessarily controlling specific company property. Would the mere substitution of a shadow director – operating behind the scenes, pulling strings through a puppet-like de jure director – change the nature of his duties? It is not at all clear why this should be the case.

510.In my judgment, the difficulty with in Lewison J’s reasoning lies in his heavy reliance on the analogy to trust law. While fiduciary obligations in corporate law and trust law share conceptual similarities, the analogy cannot be pressed too far. Trustees owe fiduciary duties arising directly from their obligation to preserve trust property for the trust beneficiaries. Directors occupy a distinct role. They do not hold company assets as trustees for others; it is the company itself that holds legal and beneficial ownership of its assets. Thus, directors owe fiduciary obligations arising not simply from direct custody or control over assets, but from their broader governance role, encompassing strategic oversight, management, and stewardship of corporate affairs. Fiduciary responsibilities in corporate contexts therefore rightly extend beyond mere asset preservation, encompassing the full spectrum of corporate decision-making.

511.Lewison J’s approach was doubted by Newey J in Vivendi v. Richards [2013] BCC 771, who noted that it “understates the extent to which shadow directors owe fiduciary duties”, adding (at §143):

“It seems to me that a shadow director will typically owe such duties in relation at least to the directions or instructions that he gives to the de jure directors. More particularly, I consider that a shadow director will normally owe the duty of good faith (or loyalty) discussed below [for the avoidance of doubt, I regard the duty of good faith as a fiduciary duty] when giving such directions or instructions. A shadow director can, I think, reasonably be expected to act in the company’s interests rather than his own separate interests when giving such directions and instruction.”

512.Coleman J’s judgment in Cyberworks (supra) is consistent with Newey J’s approach. His Lordship recognised fiduciary duties as attaching to shadow directors at least to the extent that they provide directions influencing the conduct of the de jure directors: at §61.

513.I find the reasoning of Newey J and Coleman J persuasive, and I respectfully adopt it here. This approach rightly avoids imposing artificial limits by reason of somewhat rigid analogies to trust law, and it more accurately reflects the practical realities of modern corporate governance by imposing fiduciary duties in relation to “the directions or instructions that [a shadow director] gives to the de jure directors”. Directors, whether formally appointed as de jure directors or operating behind the scenes as shadow directors, regularly exert influence across the entirety of corporate activities, not merely those directly involving physical or director control of corporate assets. There is no principled basis to limit fiduciary duties solely to instances of direct property management.

514.The inquiry, then, becomes this: did the Alan (D1) and Kimmy (D2), as shadow directors, provide directions to Giant HK and Giant Seychelles (D13) to justify imposing fiduciary obligations to REFF?

515.For the reasons given in Section D, the evidence demonstrates they did. Alan (D1) and Kimmy (D2) consistently issued instructions guiding the decisions of the de jure directors regarding the First Asia Transaction, the Mortgages Transaction, the HFS Transaction, the Paris Sky Transaction, and the Note Portion Transaction. These were not minor decisions; they were critical in causing REFF to enter into each of these transactions. It follows that Alan (D1) and Kimmy (D2) owed fiduciary duties to REFF with respect to each of these transactions, requiring them to prioritise the interests of the company over their own personal interests.

G3. Was there a breach of fiduciary duties and, if so, who dishonestly assisted in that breach?

516.So far Alan (D1) and Kimmy (D2) owed fiduciary duties to REFF in relation to REFF’s participation in the First Asia Transaction, Mortgages Transaction, HFS Transaction, Paris Sky Transaction, and Note Portion Transaction, there is no doubt that these duties were breached. As detailed in Section D, these transactions were essential components of the Scheme. Far from serving REFF's interests, each was detrimental, devised solely to benefit the architects of the fraud. I have no hesitation in finding that Alan (D1) and Kimmy (D2)’s fiduciary obligations to REFF had been breached.

517.In the same way, for the reasons I have already given in Section D, Giant Seychelles (D13), REFF’s de jure director, is equally liable. By procuring REFF’s entry into the HFS Transaction, Paris Sky Transaction, and Note Portion Transaction, transactions integral to the Restructuring Plan, Giant Seychelles (D13) breached its fiduciary duties.

518.The next question is whether, beyond these principal actors, other Defendants dishonestly assisted these breaches. Consistent with my findings, it is clear that the individuals and entities comprising the Conspirators – namely Ricky (D3), Vicki (D7), Jason (D9), FAT (D11), FAH (D12), Asia One Group (D15), Asia One AM (D16), SGOCO (D17), SGOCO HK (D18), Giant Connection (D19), and Lanca (D20) – provided assistance in relation to the transactions in which they participated. But their complicity is transaction-specific, and not co-extensive with every part of the Scheme for the reasons I have given in §451 above.

519.The test of dishonesty for claims of dishonest assistance is not in dispute. It does not require proof that each assister subjectively appreciated that their conduct would be regarded as dishonest, as required under the Ghosh standard. Rather, it necessitates a simpler inquiry: whether the assister’s knowledge and actions, when assessed objectively, fell short of standards adhered to by honest, reasonable individuals.

520.As the English Court of Appeal noted in Group Seven Ltd v. Nasir [2020] Ch 129 (at §58):

“That is not to say, of course, that the subjective knowledge and state of mind of the defendant are unimportant. On the contrary, the defendant’s actual state of knowledge and belief as to relevant facts forms a crucial part of the first stage of the test of dishonesty set out in Tan. But once the relevant facts have been ascertained, including the defendant’s state of knowledge or belief as to the facts, the standard of appraisal which must then be applied to those facts is a purely objective one. The court has to ask itself what is essentially a jury question, namely whether the defendant’s conduct was honest or dishonest according to the standards of ordinary decent people.”

521.Applying this standard, the dishonest character of these Conspirators’ assistance is self-evident. As I have found earlier, none of these transactions – the First Asia, Mortgages, HFS, Paris Sky, and Note Portion Transactions – had any legitimate commercial rationale. On the contrary, each was transparently fraudulent, deliberately engineered to harm REFF financially and enrich the architects of the Scheme. The Conspirators who assisted were fully aware of this illegitimate purpose. They were not mere passive observers, nor naive participants, but active collaborators who willingly facilitated fiduciary breaches, intentionally or recklessly disregarding REFF's interests. Judged against the objective standards of ordinary and reasonable persons, their conduct is plainly dishonest. Indeed, even were I required to apply the more stringent subjective component of the Ghosh test, I would still find these Conspirators understood the dishonest nature of their conduct.

H. QUANTUM OF DAMAGES

522.I now turn to the quantification of damages arising from the Plaintiffs’ claims for unlawful means conspiracy, breach of fiduciary duty, and dishonest assistance.

523.By the time of trial, the Plaintiffs have confined their claim to losses arising from five transactions: the First Asia, Paris Sky, Note Portion, Fundraising Transaction, and Management Fees Transactions. Of these:

(1) Only the first three transactions concern losses suffered by REFF. Any attempt by Worldwide to claim in respect of those same transactions is barred by the rule against reflective loss. Accordingly, REFF alone is entitled to claim damages for the First Asia, Paris Sky, and Note Portion Transactions.

(2) The Fundraising and Management Fees Transactions, by contrast, relate to losses alleged by Worldwide. But as I have already found, those transactions were neither fraudulent nor components of the overarching Scheme. It follows that Worldwide is not entitled to damages in respect of them.

524.The analysis that follows therefore addresses only the quantification of losses sustained by REFF, and proceeds transaction by transaction: beginning with the First Asia Transaction, followed by the Paris Sky Transaction and the Note Portion Transaction.

H1. First Asia Transaction

525.The Plaintiffs seek damages ranging from HK$49.5 million to HK$105 million for losses arising from the First Asia Transaction. They arrive at these figures by comparing the subscription price paid by REFF – HK$125 million (equating to HK$2.50 per share in FAH (D12)) – to the market price of the First Asia Stake shares during the two months preceding acquisition, a price range between US$0.40 and US$1.51 per share. Alternatively, the Plaintiffs quantify their loss at HK$79,234,992, calculated as the difference between the subscription price of HK$125 million and the later July 2018 sale price of HK$45.7 million.

526.On the other hand, the Defendants claim that the Plaintiffs suffered no compensable loss, chiefly due to the absence of an expert valuation on the fair market price of the First Asia Stake.

527.It seems to me that the absence of an expert valuation does not render the Court incapable of properly determining a fair market value. On the contrary, the significant doubts surrounding the reliability of FAH's (D12) accounts and the thin trading volume of its shares cast doubt on whether expert valuation evidence would have substantially or necessarily aided in the Court's assessment of damages. In such circumstances, the Court not only can – but must – undertake its own examination of the available evidence to determine damages fairly.

528.I also bear in mind the principle that damages are “at large” in claims for unlawful means conspiracy, and I am therefore not “limited to awarding that amount of loss which can be strictly proven; and that in coming to a view as to the level of damages which a defendant ought to pay” I can “consider all the circumstances of the case, including the conduct of a defendant and the nature of his wrongdoing”: see Noble Resources v. Gross [2009] EWHC 1435 (Comm) at §223 per Gloster J.

529.Guided by these principles, and after evaluating the evidence, I find that Plaintiffs' damages are best quantified at HK$79,234,992:

(1) In June 2018, REFF sold the First Asia Stake to Madam Lin (D6) – acting effectively on behalf of the Masterminds – as part of the Note Portion Transaction, at an agreed-upon price of HK$45.8 million (approximately US$0.92 per share in FAH (D12)). As the First Asia Stake represented consideration received by the Masterminds for transferring the Note Portion, they had a strong economic incentive to value the stake accurately rather than artificially depress it. It would defy commercial logic for these parties to deliberately undervalue the asset, as doing so would undermine the commercial advantage they sought from the transaction. Thus, the June 2018 price represents a credible and baseline, reflecting at least the minimum fair value of the First Asia Stake the Masterminds themselves implicitly acknowledged.

(2) Although the June 2018 valuation occurred around eighteen months after the December 2016 acquisition date, I find that there is no persuasive evidence indicating that significant intervening events – such as substantial deterioration in FAH (D12)’s financial condition or asset base – affected the stake's intrinsic value. It is also significant that the June 2018 price of US$0.92 per share fits comfortably within the trading price range observed in the two months leading up to the December 2016 First Asia Transaction (US$0.40 to US$1.51 per share). In fact, it lies close to the midpoint of that range, bolstering its reliability as an indicator of true market value at the date of acquisition.

530.Looking at the evidence in the round, I conclude that the most reasonable proxy for the fair market value of the First Asia Stake at the date of acquisition in December 2016 is the subsequent transaction price of US$0.92 per share. Applying this price results in a total fair market value of approximately HK$45.8 million for the First Asia Stake at that earlier date. Given that REFF paid HK$125 million at subscription, it should also follow that Plaintiffs suffered an ascertainable loss of HK$79,234,992.

531.I have not overlooked Plaintiffs' alternative valuation claim, that the true value of the First Asia Stake shares should be set at US$0.43 per share, purportedly representing the price at which Kimmy (D2) allocated shares to herself shortly before the December 2016 transaction. However, this claim is inadequately supported by the available evidence. The Plaintiffs' evidence consists principally of a single bank statement from First Asia Capital, indicating a deposit of HK$20.1 million dated 6 December 2016, which they say represented Kimmy’s payment for her allotment of 16 million shares in FAH (D12), equivalent to roughly US$0.43 per share. The Defendants dispute this, suggesting the deposit of HK$20.1 million had in fact originated from Ricky (D3) in connection with a loan arrangement rather than share purchase. Given the ambiguity surrounding the nature and purpose of this payment, and absent any other cogent corroborating evidence, I decline to find that Kimmy (D2) actually paid US$0.43 per share for her allotment. Accordingly, I also decline to adopt Plaintiffs' proposed valuation of US$0.43 per share.

532.The liability to compensate Plaintiffs for HK$79,234,992 falls on those Defendants who participated in or facilitated the unlawful scheme involving the First Asia Transaction. This encompasses the Masterminds and their co-conspirators liable for unlawful means conspiracy, breaches of fiduciary duty, or dishonest assistance. Such liable parties comprise Alan (D1), Kimmy (D2), Ricky (D3), Jason (D9), and FAH (D12).

H2. Paris Sky Transaction

533.The Plaintiffs claim damages of HK$521 million in respect of the Paris Sky Transaction. They arrive at this figure by starting from a 2012 valuation of FAT at HK$379 million (as indicated in the WMH FAT Report), and inflating this sum upward by 60% based on the general property prices index. This yields an adjusted valuation of HK$606.4 million. The Plaintiffs then subtract from this adjusted figure what they characterise as the “actual consideration” received by REFF, which they assert was only HK$85 million. Plaintiffs reach this lower figure by deducting from the stated purchase price of HK$205 million the sum of HK$120 million, funds originating from Lanca (D20) and FAT (D11), claiming this reduces Iris's (D4) actual contribution to HK$85 million.

534.I find this approach problematic. When determining a claim for loss due to undervaluation, the relevant measure is simply the difference between (1) what the plaintiff actually received for the asset sold, and (2) the fair or true market value of that asset at the time of sale.

535.How the purchaser chooses to finance the transaction – whether by her own resources, external loans, or third-party arrangements – is normally of limited relevance. The internal mechanics of the purchaser's financing arrangements do not diminish the amount that the plaintiff ultimately received. Alan’s (D1) unchallenged evidence is that the HK$120 million originating from Lanca (D20) and FAT (D11) can be traced back to funds derived from Madam Lin’s (D6) separate sale of a portion of the Convertible Note to GMC Seychelles (D13). Consequently, I find that there is no rational basis for discounting the purchase price from HK$205 million to HK$85 million. The true measure of what REFF received for the Paris Sky Transaction is therefore properly fixed at HK$205 million.

536.The question that follows is the proper valuation of Paris Sky.

537.I note the Defendants’ criticism of the Plaintiffs for failing to adduce a formal expert report specifically for this litigation. But the absence of an expert report does not leave the Court without meaningful valuation evidence. Indeed, the evidence includes three distinct valuations relevant to Paris Sky (also referred to as First Asia Tower): first, the WMH FAT Report, commissioned in 2012, which values the property at HK$379 million; second, the Colliers FAT Report, dated May 2018, valuing the property at HK$205 million; and third, the Graval FAT Report, also dated May 2018, which places the property’s value at HK$368.4 million. As I have explained in §§307-309, 315 above, I do not consider the Colliers FAT Report credible or reliable. Accordingly, the task now before the Court is to determine which of the remaining two valuation reports, the WMH FAT Report or the Graval FAT Report – provides the most accurate and reliable estimate of Paris Sky’s fair (or true) market value.

538.After careful deliberation, I find that the Graval FAT Report’s valuation of HK$368.4 million represents the most reliable and credible market value for Paris Sky at the time of the Paris Sky Transaction:

(1) The Graval FAT Report’s May 2018 valuation (HK$368.4 million) closely corresponds with the WMH FAT Report’s 2012 valuation (HK$379 million). Although these valuations are separated by roughly six years, there is no cogent evidence before this Court to suggest any material depreciation of the property prices. Alan (D1) himself suggests there is no reason to doubt the valuation of WMH as they are “very independent and professional”. It follows that the valuation of the Graval FAT Report is largely aligned with past valuations.

(2) The reliability of the Graval FAT Report is further underscored by the conduct of the Defendants. It was the SGOCO group entities, including Giant Connection (D19), that commissioned and relied upon the Graval FAT valuation when determining the price they would pay Iris (D4) for Paris Sky. As prospective buyers, the SGOCO group entities’ interest was plainly to avoid overpayment. Yet they found no reason to challenge or discount the Graval FAT Report but had instead accepted its valuation of HK$368.4 million.

539.Conversely, the Plaintiffs' alternative approach, applying a uniform 60% multiplier to the 2012 WMH FAT valuation based on a general property market index, is unsound. While property indices provide general market trends and broad reference points, they overlook crucial property-specific factors such as location, building age, condition, tenant quality, and particular market dynamics. Real estate markets are not uniform but segmented, and property-specific characteristics may lead to valuation differences. As a result, this generalised approach does not represent a robust method of determining accurate market valuations and is insufficiently precise for the purposes of these proceedings.

540.For these reasons, I find that the Graval FAT Report’s valuation of HK$368.4 million represents the best determination of Paris Sky’s fair market value at the time of the transaction. As REFF received only HK$205 million from the Paris Sky Transaction, the Plaintiffs have demonstrated a compensable loss of HK$163.4 million. Accordingly, Plaintiffs are entitled to claim damages representing that same amount.

541.The obligation to compensate Plaintiffs for this loss falls on those Defendants who orchestrated or participated in the Paris Sky Transaction. Liability attaches to the Masterminds and other Conspirators who have been adjudged liable for unlawful means conspiracy, breaches of fiduciary duty, or dishonest assistance: Alan (D1), Kimmy (D2), Ricky (D3), Vicki (D7), Jason (D9), Giant Seychelles (D13), SGOCO (D17), SGOCO HK (D18), and Giant Connection (D19).

H3. Note Portion Transaction

542.The claim for the Note Portion Transaction turns on a comparison between what REFF gave up (HK$205 million cash and the First Asia Stake) and what it received from Madam Lin (D6) (Note Portion).

543.To begin with what REFF gave up: this requires a proper valuation of the First Asia Stake. In my judgment, the most reliable valuation is HK$45.8 million (or US$0.92 per share) – this being the agreed price between the parties to the Note Portion Transaction, Madam Lin (D6) and REFF. There was no incentive for Madam Lin (D6) (or the Masterminds behind her) to understate the value of the First Asia Stake: they were, after all, receiving that stake as consideration for selling the Note Portion. On that basis, the total consideration REFF parted with, including the cash component, amounted to HK$253.8 million.

544.In this regard, I reject the Plaintiffs’ alternative case that the First Asia Stake should be valued at HK$271.5 million (or US$5.43 per share), based on REFF’s last recorded carrying value as of 30 June 2018. The Plaintiffs themselves say that FAH (D12) was “trading on a false market” and that no “proper valuation” could be obtained due to misstatements in its accounts. It would be inconsistent to now rely on REFF’s balance sheet, particularly when REFF was at that time under the control of the very individuals behind the fraudulent Scheme (such as Kimmy (D2)). The figure of US$5.43 per share is unsupported by any methodology and I decline to give it weight.

545.On the premise that the First Asia Stake was worth HK$45.8 million, what REFF parted with in the Note Portion Transaction was HK$253.8 million. The next question is what value REFF received.

546.In my judgment, the Note Portion should be valued at HK$12.4 million. That reflects its convertibility into 1,607,468 shares in SGOCO (D17) at US$0.99 per share – the price set under a rights offering for existing shareholders announced by SGOCO (D17) in June 2018. Although there is no expert evidence on SGOCO (D17)’s share value at the material time, US$0.99 per share is the most reasonable proxy. That was the price at which SGOCO (D17) itself invited existing shareholders to subscribe, and it strains credulity for the SGOCO Group Defendants to now disavow the valuation they themselves adopted. In this regard, I also note that the HK$12.4 million valuation also tracks the HK Appraisal Report, which valued the Note Portion at around HK$13.4 million.

547.This valuation is further supported by the fact that, when Madam Lin (D6) acquired the Convertible Note in April 2018, roughly three months before the Note Portion Transaction, she did so, on the basis of a US$1.50 per share conversion price. At trial, Alan (D1) considered that price to be more than 40% above market value, implying a market price of around US$1.07 per share – close to the US$0.99 I adopt. For completeness, I note that SGOCO (D17)’s shares closed at US$1.14 on the date of the Note Portion Transaction. The adopted US$0.99 figure falls squarely within the credible valuation range.

548.I also reject the Defendants’ argument that REFF could not have participated in the rights offering at US$0.99 per share, as doing so would have raised its shareholding above 20% and triggered disclosure obligations. That argument misses the point. The issue here is not whether REFF could or would have participated in the rights offering; it is whether US$0.99 provides the best available proxy for valuing the Note Portion. It does. In any event, the point that REFF was precluded from participating is unsupported by the evidence. The only documentary record, a memorandum from Loeb & Loeb, merely says that shareholder approval would be required, and that the process could entail higher transaction costs. That is a far cry from establishing that participation was impossible. At most, it would have been more procedurally burdensome, not unachievable.

549.For these reasons, REFF suffered a loss of HK$241.4 million in the Note Portion Transaction. This is the difference between what REFF gave up (HK$253.8 million) and what it received (HK$12.4 million).

550.The duty to compensate REFF for this head of loss lies with the Defendants who assisted in or participated in the Note Portion Transaction. Liability accordingly attaches to the Masterminds and Conspirators already adjudged liable for unlawful means conspiracy, breach of fiduciary duty, or dishonest assistance: Alan (D1), Kimmy (D2), Ricky (D3), Vicki (D7), Jason (D9), Giant Seychelles (D13), Asia One AM (D16), SGOCO (D17), SGOCO HK (D18), and Lanca (D20).

I. PROPRIETARY CLAIM

551.The Plaintiffs further seek proprietary relief against the Defendants, contending that various assets misappropriated from REFF remain in the Defendants’ hands and are held on constructive trust.

552.I decline to grant such relief. I agree with the Defendants that a proprietary claim of this nature requires the Plaintiffs to identify with specificity the property said to be held on trust. A court cannot declare a trust over unidentified or unascertainable assets. Yet the Statement of Claim does not meet that standard. It pleads, in general terms, that assets were received by certain Defendants at various points in time, but it fails to specify which assets, if any, remain in the hands of those Defendants or are alleged to be identifiable and subject to a constructive trust. In any event, I also find that the available evidence regarding fund flows is too limited and fragmented to enable this Court to reliably determine precisely which REFF assets, if any, remain with the Defendants.

J. ORDER

553.By reason of the matters stated above, I order that judgment be entered in favour of REFF, to be satisfied as follows:

(1) HK$79,234,992, in respect of the First Asia Transaction, for which Alan (D1), Kimmy (D2), Ricky (D3), Jason (D9), and FAH (D12) are jointly and severally liable.

(2) HK$163,400,000, in respect of the Paris Sky Transaction, for which Alan (D1), Kimmy (D2), Ricky (D3), Vicki (D7), Jason (D9), Giant Seychelles (D13), SGOCO (D17), SGOCO HK (D18), and Giant Connection (D19) are jointly and severally liable.

(3) HK$241,400,000, in respect of the Note Portion Transaction, for which Alan (D1), Kimmy (D2), Ricky (D3), Vicki (D7), Jason (D9), Giant Seychelles (D13), Asia One AM (D16), SGOCO (D17), SGOCO HK (D18), and Lanca (D20) are jointly and severally liable.

K. CONSEQUENTIAL MATTERS

554.I will address all consequential matters, including consequential orders to be made in HCA 938/2022, interest, costs, as well as any other matters separately. I invite Counsel to confer and propose for my consideration an appropriate timetable for the submission of written submissions, with a hearing date to be fixed with a time estimate of 1 day.

Mr. Victor Dawes SC, Mr. Lau Ka Kin and Mr. Jonathan Fung instructed by Messrs. MinterEllison LLP for the 1^st – 2^nd Plaintiffs

Mr. Abraham Chan SC, Mr. Jonathan Ng and Mr. John Cheung instructed by Messrs. O Tse & Co. for the 1^st, 3^rd, 4^th, 5^th, 6^th, 8^th and 20^th Defendants

Mr. Justin Ho and Ms. Tiffany Yau instructed by Messrs. W. Y. Ku & Co. for the 2nd, 9th, 12th, 13th, 15th and 16th Defendants

Mr. Martin Ho and Mr. Sik Chee Ching instructed by Messrs. Ho, Tse, Wai & Partners for the 7^th, 11^th, 14^th, 17^th, 18^th and 19^th Defendants

The 10^th Defendant was not represented and did not appear