Mr. Yang was also busy building market share in monitors. In April 2000, Proview cut a deal with two smaller monitor makers, MAG and CTX, to share resources. In 2003, Proview also announced a deal to build a range of display-oriented gadgets under the Motorola brand and, four years later, it teamed up with Taiwan electronics giant Tatung, which took a 16 per cent stake in Hong Kong-listed Proview.
By then, the global financial crisis had hit.
In June 2008, Proview reported its first loss and was grappling for salvation. The Tatung deal, it said, “will significantly enhance the Group’s performance in the coming years.” The next year, there was no mention of the Tatung tie-up.
In September 2009, its Brazilian subsidiary had filed for bankruptcy protection and Proview International was running into serious problems. Mr. Yang had in early 2008 transferred his around 30 per cent stake to his son, and by late 2009 was lending his own money to the company.
When a company sought to buy the group’s IPAD trademarks, lawyers sold them on December 23 for 35,000 pounds.
Two weeks later, Proview stock, which had been languishing at around HK$0.25, doubled in a few days on heavy volume. The company was forced by the Hong Kong Stock Exchange to say it was unaware of any reasons for the sudden interest.
On January 27, Apple announced the iPad.
A week later, with Proview shares still trading heavily, the company conceded the truth of a report by Beijing Daily that China rights to the IPAD trademark were owned by its Shenzhen subsidiary. It was now clear Proview had sold trademarks to Apple – but not all of them.
With strong interest in the iPad ahead of its April launch, Proview was now sitting on something infinitely more valuable than any of its assets.
Now Yang was being pulled in all directions. Much of Proview’s debts were short-term, he said later, and the company had been defaulting on payments as early as December 2008. The Shenzhen subsidiary – the group’s largest operation – was hardest hit, leading to the local government corralling the banks it owed money to support the company.
“Proview had a glorious past in Shenzhen and they wanted to see us survive the crisis,” said Mr. Yang. “But frankly, once the debt pile increased and suppliers got into trouble, the whole thing ballooned and that led to the factories closing down.”
By early 2010, the banks, too, were after whatever they could recover.
And creditors were not only going after his group’s assets in Shenzhen; a bankruptcy petition was filed against him personally in Hong Kong on March 4. Mr. Yang said creditors were only lending money to the company if he personally guaranteed the loans. “We needed them to continue to support Proview,” he said.
In March 2010, Proview warned of a “significant loss” for the six months to end-December 2009, which would be the last financial results announced. It then hired financial advisers to deal with creditors and come up with a restructuring plan, but the fate of the trademarks seemed to be the company’s focus.
Apple lawyers were firing off letters demanding Proview hand over the rest of the patents. By April, Proview was fending off reports that it was planning to auction the patents, dismissing one press article as “not accurate at all.”
In fact, it wasn’t as clear-cut as that. The only assurances it had given Apple were that it wouldn’t sell them before April 30, a date it then pushed back to May 30, according to Hong Kong court documents. These also showed Proview Shenzhen was quietly trying to transfer the trademarks to a subsidiary, Yoke Technology.
But time was running out. Legal proceedings by Chinese creditors to recover assets prompted the Hong Kong Stock Exchange to suspend trading in Proview shares on May 12.
Two days later, a Chinese court ordered Proview to sell off assets of another Chinese subsidiary, Ningbo Prowell. On May 20, Apple began legal action against Proview in Shenzhen.
The battle to save Proview International was lost.Report Typo/Error
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