Judge says Wharf will be required to pay 6% interest, double the original amount.
HONG KONG — A Denver judge ruled Wharf Holdings, the parent company of Wharf Cable, in contempt Friday for failing to turn over assets to cable operator United Intl. Holdings (UIH).
And the judge added that Wharf would be required to pay 6% interest, double the original amount.
In April, a jury awarded Denver-based UIH $150 million after finding that Wharf had reneged on a 1992 oral agreement to sell UIH 10% of Wharf Cable.
Wharf, one of Hong Kong’s biggest conglomerates, maintains that the companies never reached such an agreement.
Wharf appealed the verdict, but in October a judge ordered it to turn over company assets held outside the U.S. as security for the damage award. Wharf did not comply, which led to the contempt ruling.
Wharf called the latest move “unfortunate and subject to reversal.” The company argues that the case should not have been heard in the U.S. and that an American court does not have the power to force a company to turn over assets held outside the U.S.
“The ultimate outcome of this case, particularly the matters of jurisdiction and extraterritoriality could have long-term implications for U.S. and Hong Kong companies wishing to do business together in Hong Kong as it will become a legal benchmark,” Wharf said in a statement.
Wharf Cable, the city’s lone cable operator, was launched four years ago and has about 390,000 subscribers, giving it 27% penetration.
Wharf Cable chairman and managing director Stephen Ng said he does not expect the company to reach profitability until 2000.
The cost of the appeal is being borne by Wharf’s shareholders. In May, Wharf amended its profit statement to reflect the cost of the lawsuit.