Ourgame International Holdings Ltd has brought legal action against a company’s former director over the unmet loan and debt obligations. The total amount of the owed sum is estimated at $12.6 million.
Director Faces Legal Proceedings from Former Company
As a result, the company has been forced to file a civil complaint against Fu Qiang and Merit Horizon Limited. The complaint alleges that a loan agreement and a letter of guarantee’s terms have been breached, prompting the company to seek damages.
Ourgame was among three directors who were removed from the company in May, Asgam reported, citing “obstructions and difficulties” in the operation of the firm as the reason why. The issues became evident around the time of the World Poker Tour sale, which was transferred to Element Partners LLC in July for $105 million and is one of the biggest asset shifts Ourgame has done recently.
The sale was completed through Ourgame subsidiary Allied Esports Entertainment. Detailing the complaint, Ourgame explained that it provided Fast Express Trading Limited, another company involved in the proceedings, with loans for $8 million between January 3 and February 6.
The loan had a 30-day term which Fast Express Trading Limited missed. When this happened, Merit Horizon stepped in and offered to repay the loans, which then-director Fu agreed to, signing a letter of guarantee that backed Merit. However, those payments were never met.
Missing Loan Funds and Vouching for the Wrong People
Ourgame now seeks to reclaim $12.6 million from Merit Horizon and Fu, citing the above transgressions as the reason why. The claim seeks to recover the principal that has been accrued over the period since the issuance of the loans and their repayment.
The complaint has been filed on January 10 with the Fourth Intermediate People’s Court of Beijing Municipality. In it, Ourgame says that it has also filed a report with police authorities who will supposedly look into any wrongdoings pertaining to Merit.
While the case was not brought to court until recently, the removal of Fu and other former directors prompted the remaining executives to act. Fu and his fellow directors were removed specifically because they tried to convince shareholders to vote for the removal of seven existing directors because of the WPT sale. The attempt clearly failed.