Former Forluxe Securities director James Mui Kwong-nok and his brother Gordon Mui Kwong-yin embezzled shares worth $34.2 million and $6.97 million in cash from the company, according to liquidators.
The 'fraudulent and dishonest' acts were carried out with a clear intent to cause Forluxe to sustain loss or for their own financial benefit, a High Court writ states.
The two brothers, along with James Mui's wife Peggy Lee Yui-pin advanced money from the company to themselves over the space of three years, the writ alleges.
Between July 1995 and May 1998 - when the company was forced into liquidation - James Mui is alleged to have taken $5.97 million, Gordon Mui $50,000 and Peggy Lee $954,000.
The trio are alleged to have misappropriated or misapplied shares held by Forluxe as agent for its investor clients, or owned by the company itself.
This was done by pledging the shares to Kingston Finance and Wing Hang Bank 'for the purpose of raising improper funding for themselves', the writ alleges.
The total value of the shares was $34.28 million, including interest.
The embezzlement was discovered only last May on the appointment of Nelson Wheeler Corporate Reconstruction and Insolvency as provisional liquidators, the writ says.
Nelson Wheeler managing director Nick Hill said yesterday any evidence of wrongdoings carried out by the directors of Forluxe would be passed on to the Commercial Crime Bureau.
Moreover, as liquidators, the company had an obligation to report on the directors to the Official Receiver.
James and Gordon Mui were arrested last July after spending three months avoiding the authorities. No charges have been laid.
Civil lawsuits have been filed against the pair, but yesterday's writ sought $9 million on behalf of Forluxe from its underwriter.
Christopher Mark Swinbank is being sued on behalf of himself and Lloyds underwriters.
It is claimed that Lloyds agreed to insure Forluxe to a limit of $9 million.
However, 'wrongfully and in breach of contract', no such indemnity has been made.
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