Date: November 25, 2021
Subject: [Board_finance] DotAsia Financials up to Jun 30, 2021 – presentation slides
From: “J. Emmanuel Disini” <joel disini (dotph)>
To: Board (dotasia)
Dear fellow directors of Dotasia and Advisory Committee Members,
Before you is a piece of DotAsia legislation that seeks to make a long-serving (10 year?) Board Director from Iran a mere Observer, as if he had been charged with some crime or wrongdoing. Neither IRNIC nor this director is on the US Foreign Assets Control list. https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-sanctions-programs-and-information, yet the CEO, Mr. Chung, and the former Chair, Ms. Hilyard, seek to make this status official, by redacting Mr. S from the list of Directors on the Annual Financial Reports of 2020. This, despite the fact that Mr. S was re-elected in 2020 as an Official Board Member, and ran for the Chairmanship in 2021 and emerged tied for first with Ms. Hilyard.
Mr. Chung’s lawyer, John Brewer, himself has confirmed, on May 2021 that Mr. S IS indeed a board director.
“ [Mr. S] was re-elected as Director at the 24 February 2018 AGM [but] DA reported to the Companies Registry that he ceased to hold office on 5 March 2018, whereas in point of fact he did not. Indeed, he has continued to hold office continuously since the 24 February 2018 AGM, being re-elected again in 2020.”
And independent counsel, Marc Corlett has written that falsifying our list of Board Directors in order to gain a fiduciary advantage is, in fact, a crime, and exposes your Board Directors to significant criminal liability. (Attached)
“If charged with offences under the Companies Ordinance, potential liability includes both fines up to $300,000 and imprisonment up to 2 years. If charged with offences under the Theft Ordinance, potential liability includes imprisonment up to 14 years.“
This is pretty serious and we should not take this lightly!
What the board and the AC members should note is that this all stemmed from a 2018 meeting in Kathmandu when Mr. Chung claimed that CITIC bank had cancelled (or was about to cancel) DotAsia’s bank account and mortgage primarily because of the presence of an Iranian on our board. Mr. Chung produced no evidence for this and the Board relied ENTIRELY on Mr. Chung’s verbal account.
Upon further investigation, however, Mr. Chung’s story raises significant doubts as CITIC bank, in Sept 2017, already had significant ties with the Iranian government, lending $10B that year to Iran.
https://financialtribune.com/articles/economy-business-and-markets/72363/iran-china-sign-10-billion-finance-deal
Why would CITIC bank be worried about the presence of an Iranian on DA’s board when it was already doing significant business itself with IRAN?
Perhaps realizing this in 2021, Mr. Chung then proceeded to LIE to his lawyers, telling John Brewer it was Citibank that had cancelled the DA bank account and later telling Anthony Neoh that it was ICBC and HSBC threatening to cancel our bank accounts.
John Brewer on May 2021 wrote:
“26. I am instructed that (a) in Sept 2017 Citibank notified DA orally that following an overall review which included nationalities of its directors Citibank intended to terminate their banking relationship with DA and foreclose on mortgage facilities granted in respect of DA’s premises …“
On Oct 2021 Anthony Neoh writes:
“In 2018, HSBC and ICBC indicated to Dotasia .. that they would not continue their banking relationship because of the presence of an Iranian national on DotAsia’s board. This came out of the blue for DotAsia”
It seems Mr. Chung has fed these lawyers incorrect information and thus their conclusions are suspect and must be rejected by this Board and its Advisers.
It is suggested that, to avoid wasting/manipulating legal resources in the future, that the Directors be allowed to query the lawyers directly and that the lawyers be required to respond directly to the board, and that the CEO be forbidden from filtering either questions or answers. This way, the lawyer cannot be duped into giving misleading advice.
More importantly, Marc Corlett has pointed out that Mr. Chung himself may be benefiting from the loan, as Mr. Chung has personally guaranteed the DA loan for an unlimited amount:
“I understand from the opinion of Mr Brewer that the CEO may have a personal interest in the financial arrangements. If so, his interests may well diverge from the position of DA in terms of regularising matters with DA’s bankers”
So the question needs to be asked – is Mr. Chung or Rebecca benefitting in some way from DotAsia’s loans?
I note that communications in 2012 show that JP Morgan was willing to give us a loan for 1.14%:
On March 16, 2012, Rebecca wrote the board:
“As for financing the property, JPM can actually give us a credit line based on the US$3.8M portfolio we are holding with them. They can give us a US$2.5M credit line at a rate of Cost of Funds + 0.9%, where current Cost of Funds ranges from 0.24% (1-mth loan) to 0.74% (6-mth loan), meaning that the borrowing rate ranges from 1.14% – 1.64%, which is a very good deal.”
Instead, Rebecca and Edmon choose a mortgage for 2.75% in the amount of over $1M with CITIC bank and urged the board to approve this. There was no discussion as to WHY they chose the more expensive loan. There was no discussion that THEY TOO might be borrowing money from CITIC. As always, the board accepted their testimony at face value.
ON April 20, 2021, Rebecca wrote the board:
“As discussed in Wednesday’s board meeting, we have been sourcing a bank for a mortgage for our property and today, after considering the offers we received, we are proposing that we go with Citic Bank International. Basically, 4 banks have approved our mortgage, and 3 have either rejected or no news as of today. Amongst the approved banks, Citic Bank is considered the best choice, because it offers a good and reasonable rate of 2.75%, for borrowing 50% of the property price.”
Why did Mr. Chung push for the more expensive mortgage?
When challenged to explain why the CITIC mortgage was guaranteed for an unlimited amount PERSONALLY by Mr. Chung, Rebecca opined yesterday that:
“it would not be possible for DA to get a mortgage in HK without making this sort of guarantee.“
This itself is another fantastic statement, given that the loan was for only 50% of the value of the office; the remaining 50% being fully paid up. And that we had $3.8M cash in JP Morgan. A quick check with my banking contacts in HK reveals that this is definitely untrue.
A check with the Land Office in HK furthermore, shows that NO MORTGAGE WAS TAKEN OUT ON THE DOTASIA OFFICE in 2012. The first sign of a mortgage was in 2018, from ICBC.
(Land Search Record is attached)
So the question is – WHO was DotAsia making mortgage payments to from 2012 to 2018? Whose bank account was receiving the mortgage payments? Who was earning interest at Dotasia’s expense? What is the proof that CITIC bank cancelled DotAsia’s mortgage facility BECAUSE of Mr. S’s presence?
I would urge the Board and the Advisory Committee to demand:
- That Mr. Chung turn over ALL records of CITIC bank, JP Morgan, ICBC, and HSBC
- That Mr. Chung turn over ALL communications with regards to these banks, especially CITIC bank
- That in an independent and reputable auditor chosen by the members be chosen to audit these records
- That DA lawyers be able to communicate directly with the board and that their answers not be filtered or censored by the CEO of DA staff.
Please note that the DotAsia M&A clearly states that Mr. Chung is required by law to turn these documents over”
https://www.dot.asia/policies/DotAsia%20M&A%202009-06-26.pdf
“67. The books of account shall be kept open at the Office or at such other place as the Directors think fit and shall be open to the inspection of the Director”.
I understand that accusing Mr. Chung of fraud is a big thing. But he already faces 3 lawsuits where he is accused of fraud and gross negligence. The best way to clear his name is to release these documents forthwith!
I trust we will all do the right thing and do all we can to end the cover-up. There is no litigation covering the Haiphong Road Office mortgage, so there is no possible reason to stop the release of these documents.
Sincerely
Joel Disini
Director 2010-2021