White Collar | Big chunk of compensation to Gome could end up back in Wongs' pocket
Of the HK$420m penalty, HK$150m might end up back in couple's pockets via special dividend
It might seem that the HK$420 million jailed mainland billionaire Wong Kwong-yu and his wife, Du Juan, have been ordered to pay in compensation to the firm he founded would put a huge hole in their pockets.
However, the actual penalty the couple would suffer for their misconduct in 2008 could be much less. This is because although Wong has been behind bars on the mainland since 2010, the couple remain the largest shareholders of Gome Electrical Appliances, with 35.55 per cent.
If the retailer decides to pay the HK$420 million out as a special dividend, the couple would be able to put nearly HK$150 million back in their pockets.
This shows how savvy Wong is as a businessman and sheds light on the couple's agreement earlier this month to pay the compensation to Gome in exchange for the agreement by the Securities and Futures Commission not to take further action against them.
To be fair, Wong and his wife are eligible to get part of the cash. The key issue is transparency
The SFC started a legal battle with the couple after it alleged they handled a share repurchase by Gome in a manner that would benefit themselves at the company's expense.
