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Mon, Jul 23, 2007 - Page 10 News List

Lawsuit threat rattles HK


Bank of East Asia chairman David Li listens to a question at the company's results meeting in Hong Kong on Feb. 8. US regulators have said they may sue Li over a Dow Jones & Co insider trading case.


A possible lawsuit by US regulators against Hong Kong banker David Li (李國寶) in a Dow Jones & Co insider trading case has rattled high rollers in the city, where Li is a political and business heavyweight.

The US Securities and Exchange Commission has notified Li that it plans to recommend filing civil charges against him.

Li has previously denied giving information to a Hong Kong couple accused of buying a block of Dow Jones stock just before its share price rocketed on news that Rupert Murdoch's News Corp had launched a takeover bid for the company.

Prosecutors said the couple borrowed funds from Charlotte Leung's (王梁家安) father, identified as Michael Leung Kai Hung (梁啟雄), who has close links with Li, to partly finance the hefty stock purchase.

"I have broken no laws and denied the apparent allegations being made by the staff of the Commission," Li, a Dow Jones board member, has said in a statement.

"I will defend myself vigorously. In the meantime, I will continue to carry out all my business and public duties while defending my good name and reputation," he said.

Li, the head of Hong Kong's largest independent local bank, the family-controlled Bank of East Asia (東亞銀行), earlier this month received a Grand Bauhinia Medal, the city's highest public honor.

He was credited for contributing to banking supervision policy, promoting Hong Kong's financial stability and strengthening its status as a financial center. But the possible lawsuit has cast a shadow over the well-connected businessman.

The looming civil charges could affect his reputation "whether there will be a litigation or not," said James Sung (宋立功), a political scientist at City University.

The 68-year-old Li was born in London and studied at Cambridge University. His grandfather founded the Bank of East Asia in 1918 and the lender boasts one of the biggest branch networks in China among Hong Kong lenders.

Li's family, one of Hong Kong's most powerful, has been prominent for five generations in business and politics. His younger brother Arthur Li (李國章) was education secretary until last month. His cousin, Andrew Li (李國能), is the chief justice of HK's highest court. One of his uncles, Ronald Li (李福兆), is a former chairman of the local stock exchange.

Li is also a good friend of Chief Executive Donald Tsang (曾蔭權).

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