Two HK Airlines directors seek US$12.2 million in damages in lawsuit

TWO directors of troubled Hong Kong Airlines have applied to the Hong Kong High Court demanding HK$95 million (US$12.2 million) in damages.

Lawyers for the two directors - Sung Jianfeng and Hou Wei - made the demand in the High Court in the latest episode of infighting between the pair and self-claimed controlling director Zhong Guosong, who had sought an injunction to stop the Mr Sung and Mr Hou from interfering with the company.



The boardroom power struggle - and subsequent court fight - pitted Mr Zhong against Mr Hou, who was backed by Chinese aviation conglomerate HNA, a shareholder of the airline.



But the damages demand was unlikely to hurt Mr Zhong's pocket because of the way the case was structured. Instead, the airline would be expected to pay, according to Hong Kong's South China Morning Post.



The injunction suit was filed under the name of Hong Kong Airlines Limited, although a source told the SCMP it was a move by Mr Zhong to come out on top. He has control of the airline because a temporary court injunction has barred Mr Sun, Mr Hou and fellow director Wang Liya from making any decisions beyond normal business operations.



In a parallel case, the court has also been asked to determine the true major shareholder of Hong Kong's third largest airline.



The latest court hearing was primarily to deal with procedural matters relating to both court cases but Mr Sun and Mr Hou's lawyer made the damages request to judge Mr Justice Jonathan Harris.



Mr Zhong owned 27 per cent of the carrier through Hong Kong Airlines Consultation Services Co Limited, while its ally Frontier Investment Partner held 34 per cent. HNA had 29 per cent.



But a third party, Grand City Capital Investment, said it had become the legal owner of Frontier's shares, which threatened Mr Zhong's position of having the majority shareholding.



Mr Zhong disputed whether the sale of Frontier's stake to Grand City, by a director named Zhang Ziyan who resigned, was valid.



There will be a two-day trial starting from August 22 to determine that point, as well as whether it was appropriate to impose an injunction order on the three other directors. Meanwhile, the temporary injunction remains in place.


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