Kwok Hiu-Kwan, who holds 29.91% of Convoy’s shares, called an extraordinary meeting on the last day of 2017 to pass a motion to remove six directors of the firm and appoint three he had nominated.
The extraordinary meeting was called by Kwok after Hong Kong’s Independent Commission Against Corruption (ICAC) raided eight locations connected to Convoy and arrested four senior executives on suspicion of corruption in early December.
The firm’s shares halted from trading on 7 December after the firm’s share price fell by 7%.
The boardroom coup did not go Kwok’s way however, as the South China Morning Post has reported that interim chairman Johnny Chen Chi-Weng ruled that the shareholder’s voting rights were invalid.
Chen said Kwok’s rights had been removed as Convoy’s management team filed two writs with the Hong Kong High Court earlier in December, with one looking to invalidate Kwok’s shares in the company.
“After discussing with our lawyers, I decided to use my power to rule out all votes related to the writ,” Chen said to the Post after the meeting.
“If the High Court declares the shares valid, and the shareholder would still like to call for a meeting, I’ll be happy to make the arrangement,” he said.
Kwok has released a statement responding to his vote being invalidated, saying Chen “has rudely taken away my voting rights”.
He said that if his votes had been counted at the meeting, then his resolution would have been passed and the six directors would have been removed.
“This shows that besides my votes, most other shareholders are voting on my side to support removing certain existing directors and appointing some new ones to maintain the stability of the company,” Kwok said.
“The chairman’s decision to declare my votes as invalid is thus acting against the interests of other shareholders.
“I would insist that my voting rights and the interests of other shareholders be safeguarded,” he said.
Chen took over as chairman in mid December after former chairman Quincy Wong Lee-Man was arrested at the Hong Kong International Airport.
Since Chen’s appointment the firm has looked to restore the confidence of it clients by suing 28 individuals, including Quincy, for more than HK$4bn ($520m, €439m, £387m). The firm claims these people were involved in gross breaches of fiduciary duties and illegitimate diversions of the company’s funds, which caused substantial financial loss and damage to the company.
The firms has also announced it will spend HK$300m in 2018 to more than double its team of financial advisers and pay a bonus to retain staff and expand its business.