HONG KONG, Sept 2 (Reuters) - Hong Kong's High Court on Wednesday rejected a request from the lawyer for the founder of embattled Chinese property company Evergrande to use funds controlled by liquidators to pay HK$1.2 million ($153,039) in legal costs.
The liquidators, who have also been appointed by the court as receivers of founder Hui Ka Yan's personal assets, have been battling to claw back $6 billion in dividends and remuneration paid to him and other ex-executives.
Evergrande, which was once China's top property developer, has defaulted on most of its $300 billion in liabilities. The company has become a poster child of the crisis in China's property sector that has long been a drag on the world's second-largest economy.
Last week, 67-year-old Hui, who was once Asia's richest man, was sentenced to life in prison by a Chinese court, which also ordered all his personal property to be confiscated.
Hui's lawyer told the Hong Kong court on Wednesday that Hui's legal team did not have access to the full Chinese judgement, adding that she did not know how the confiscation would interact with the Hong Kong proceeding.
The lawyer added that Hui has been prohibited by authorities from discussing his assets.
After the sentence in China was handed down, offshore creditors were concerned that the confiscation of his personal assets would affect their debt recovery as it could complicate the liquidation process.
But Xinpeng Zhu, a lawyer at Shanghai Rongying Law Firm, said he expected the impact to be limited.
He said confiscations usually include offshore assets, but creditors' rights would be protected and they rank above criminal fines in liquidations.
The Hong Kong High Court ordered Evergrande to liquidate in 2024 and appointed Edward Middleton and Tiffany Wong of Alvarez & Marsal as liquidators.
Separately, the liquidators are also seeking 57 billion yuan ($8.5 billion) in damages from PwC, accusing the firm of being negligent in its auditing work.
($1 = 7.8411 Hong Kong dollars)
(Reporting by Clare Jim; Editing by Thomas Derpinghaus)
