Legal action by Equiticorp Holdings' statutory managers to recover an unpaid $74 million loan has taken so long it has weathered both the 1997 Asian crash and the global financial crisis.
But the saga is finally nearing an end after exhausting almost every possible legal avenue in 22 years of obfuscation.
The managers want to sell a valuable parcel of land in downtown Kuala Lumpur, and a court ruling last month marked a turning point, paving the way to call tenders for the property and finally yield a small return for debenture holders.
Equiticorp would have long been filed away in the annals of New Zealand's corporate hall of shame but for the persistent and resilient Cheah Theam Swee.
The legal tussle between Cheah and the managers has occupied the courts of Singapore, Malaysia, New Zealand and London's Privy Council.
At the heart of the dispute is 2.99ha of commercial property divided into 16 plots on Jalan Raja Chulan in the business heart of Kuala Lumpur, a stone's throw from the famously lofty Petronas Towers. Even a much-simplified chronology of the legal battle over the land is a tangled story of claim and counter-claim.
1986: Equiticorp lends $100 million to a consortium led by Cheah Theam Swee to buy listed shell JEDI Corporation (renamed London Pacific).
1987: Equiticorp wins personal judgment for $7 million against Cheah, who appeals to Privy Council.
1989: Equiticorp collapses.
1991: Privy Council dismisses Cheah's 1987 appeal. With interest, he now owes $15 million. Managers get interim injunctions against him in Singapore, to secure assets where he is living.
1993: By now, statutory managers are seeking $74 million, Cheah's share of the original $100 million loan. Substantive claim begins in High Court at Auckland, which rules Cheah must come to NZ.
1994: Cheah does not show in NZ but says he will settle in Sydney. Statutory manager Bruce Stowell flies to meet him but nothing is settled, so case heads back to court. Application is made in Singapore High Court to have him bankrupted. Cheah appeals on basis that NZ bankruptcy application cannot be heard there. Singapore court says it can, but he appeals.
1995: Others in $100 million consortium (mainly bloodstock interests in NZ) settle, leaving claim remaining against Cheah.
1996: Cheah gets stay on bankruptcy proceedings by offering a scheme of arrangement to creditors, opposed by managers. Cheah's major asset is 80 per cent of Malaysian-based United Securities Sdn Bhd (USSB), which owns Kuala Lumpur land through subsidiary City Centre Sdn Bhd (CCSB). Scheme ultimately fails.
1998: Cheah bankrupted, with order for investigation of his financial affairs and realisation of assets by Singapore official assignee. Nothing is done for three years in spite of persistent inquiries from NZ. Managers begin own inquiries and find minefield of legal disputes with creditors. Cheah's brother Dr Cheah Theam Kheng takes over court action for Cheah.
2000: Successful winding-up order made by group of architects against CCSB.
2004: Managers win tender to buy Cheah's debts for nominal amount, subject to Malaysian central bank approval. They engage Kuala Lumpur solicitors to take more aggressive stance on property sale and to test validity of mortgages.
2005: Managers finally granted ownership of Cheah's debts. Cheah's brother asks managers to drop "their hostile approach" and work with him to sell properties. Managers suspicious, but meet. Cheah's lawyers still blocking full disclosure of details so managers pressure him, issuing winding-up notices on all small Cheah-associated companies. CCSB liquidator puts land up for tender for second time, after first tender fails to attract acceptable bids. Cheah's brother starts legal proceedings to remove CCSB liquidator.
2006: Cheah's brother contests legal proceedings by managers to wind up six Cheah-associated companies, delaying other court proceedings by managers to liquidate USSB. Managers finally get to inspect all the Official Assignee's files relating to Cheah's bankruptcy.
2007: Managers obtain winding-up order against USSB and appoint liquidator with aim of him taking over CCSB so land can be sold for best price. Managers get examination of Cheah in the Singapore High Court after little support from the Official Assignee. Court finds Cheah brothers have validity to proceed with claim to kick out CCSB liquidator. Brother proceeds with action to nullify a deal the liquidator has with party which has paid a $3 million deposit.
2008: Appeal by Cheah's brother against managers' appointment of USSB liquidator is finally heard and finds in favour of managers, but Cheah's brother moves to take it to Malaysia's highest court. By now there are numerous appeals on different fronts. Brothers now say they have found a Korean partner who will pay off creditors so they can develop the property in a joint venture.
2009: Cheah's brother unsuccessful with Federal Court bid to prevent managers winding up USSB.
2010: CCSB liquidator by now has deal on table to sell property for $72 million. Last month, Court of Appeal decides that CCSB's liquidator acted outside the terms of his appointment, paving the way for the managers to get their own liquidator appointed to handle CCSB and put the property up for tender again to get the best possible price.
Finishing line in sight for legal marathon
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