Grande Holdings - Controversy

Controversy

In 1999 during the Asian Financial Crisis the company courted controversy when one of its main subsidiaries in Hong Kong, Akai Holdings Ltd, fell apart after recording a $1.65 billion loss in 1999, one of the biggest losses in Asian financial history. It resulted in Grande Holdings becoming almost bankrupt, and having to sell many of its subsidiaries and business interests to recoup its loss.

Regulators and officials in the bankruptcy court had found the company's subsidiary, Akai Holdings Ltd, and its Singer division, had made a number of complex company cross-selling deals which resulted in the destabilisation of Singer and Akai. Officials, through their findings, had found Akai's directors and staff had left their Hong Kong offices, and also found that some $38.5 million had mysteriously disappeared from Akai's funds. It was speculated the money was either siphoned away by money grabbing employees, or deposited in overseas bank accounts.

In November 1999, after the bankruptcy proceedings control of many of Akai's remaining assets mysteriously shifted to Grande Holdings, without any notification to the Hong Kong Stock Exchange, creditors, courts, or other regulatory authorities. The deal was done through a simple and hastily prepared four-page management agreement.

Creditors for Akai say they only learned of the change in corporate ownership in September 2000, when Grande Holdings presented 54 boxes of Akai records to liquidators. Grande Holdings then executive director Samuel K. Yuen denied in a brief telephone interview that Grande had taken over Akai.