In turn, legal action was under way or being prepared by Sun Jiangrong or against Stark in Hong Kong, on the mainland and in Singapore, Sun Jiangrong told the South China Morning Post. In addition to obtaining an order to freeze his assets, Stark had sold his shares. "This caused me losses. Stark's behaviour was excessive," Sun Jiangrong alleged.
The background to the current legal tussle dates back to 2007 when Stark extended a S$120 million (HK$647.29 million) loan to Thumb China Holdings Group, a British Virgin Islands (BVI) company wholly owned by Sun Jiangrong. As security for this loan, Thumb pledged its 56 per cent stake in Sino-Environment Tech Group, a Singapore-listed waste management firm.
Thumb defaulted on the loan in February and Stark subsequently sold the pledged Sino-Environment shares, from which it recovered part of the loan.
Radiance is a Singapore-listed electronic product manufacturer majority-owned by Thumb. Hong Kong records show Sun Shaofeng wholly owns Hero Key, of which he is the sole director. Sun Shaofeng also owns 45.88 per cent of China Green, a Hong Kong-listed agricultural company headquartered in Fujian province whose market capitalisation is HK$7 billion.
Sun Shaofeng is ranked No 272 on Forbes' 2008 list of the 400 richest Chinese, with an estimated net worth of US$240 million.
A Singapore court order obtained on August 24 forbids Thumb and Hero from transferring Thumb's Radiance shares to Hero or any other party, according to the Radiance announcement. Stark alleged that Thumb had breached clear contractual restrictions against further borrowings and created security over its assets, when Thumb pledged its 52.41 per cent stake in Radiance to Hero as security for a purported loan from Hero.
Stark also alleged that Sun Shaofeng was aware of the terms of the investment company's loan to his brother, and had unlawfully conspired with his brother to breach the terms of the loan.
Sun Jiangrong replied that the transaction between Hero and Thumb was a normal one, and that Stark's allegations were not entirely correct.
"This case doesn't really concern Sun Shaofeng much. Matters are not yet totally clear," said Sun Jiangrong.
When asked, Sun Jiangrong declined to give contact details of his brother. Efforts to reach Sun Shaofeng for his comment were not successful.
Claims against Sun Jiangrong and his related companies are also being brought in Hong Kong and mainland courts, which led on June 5 to the Hong Kong High Court granting an injunction against Sun Jiangrong disposing of his worldwide assets.
The claims stem from additional security that Sun Jiangrong procured for the Stark loan in the form of a pledge over shares of a Hong Kong company, Top One International (China) Property Group. Previously, Top One International owned a Chinese property company, Chongqing Dading Property, which owned properties on the mainland valued at 10 billion yuan, according to a recent Sino-Environment announcement. Despite restrictions in the security agreements against Top One International and Sun Jiangrong personally, Top One International had transferred to Chongqing Dading a Hong Kong company wholly owned by Sun Jiangrong, Top One Property Group. Top One Property in turn tried unsuccessfully to transfer Chongqing Dading to a Chinese company majority-owned by Sun Jiangrong's brother-in-law, Sun Jing Sheng.
To protect the value of its security over Top One, Stark obtained a Hong Kong court order in May prohibiting Sun Jiangrong from dealing in the Chongqing Dading shares and subsequently obtained an order in mainland courts which froze the shares.
Two executives of international turnaround and restructuring firm Ferrier Hodgson, John Batchelor and Roderick Sutton, were appointed receivers of the shares of Top One on April 29 and Top One Property on May 22.