On November 28, 2006, Nam Tai Electronics, Inc. announced that the Lords of the Judicial Committee of the Privy Council of the UK rendered a judgment on November 20, 2006 as well as declared that the redemptions by Nam Tai of Nam Tai shares owned by Tele-Art Inc. on January 22, 1999 and August 12, 2002 were nonentities. The Privy Council announced that the register of members of Nam Tai should be rectified in order to reinstate the redeemed shares and any other shares accrued by means of exchange or dividend.
In accordance with the judgement, the Bank of China (BOC) should be registered as owner of the reinstated shares. Nam Tai was ordered to pay the costs before the Privy Council.
The Privy Council upheld the right of Nam Tai to amend its Articles of Association in order to effect the redemptions – which were the basis on which the BOC and Tele-Art’s liquidator had been contesting the redemption before the British Virgin Islands courts. However, the Privy Council suggested that the redemptions were a nullity as far as Tele-Art was in liquidation, therefore, the redeemed shares could not be applied to satisfy the debt of Tele-Art’s to Nam Tai.
Before the Privy Counci, the BOC informed that its secured debt (from advances allegedly made to Tele-Art’s subsidiary) as of April 13, 2005 was about USD 3.8 million with interests and costs accruing. What Nam Tai has disputed were both the validity and the amount of the debt allegedly owed by Tele-Art to the BOC.
The proceedings before the Privy Council were the final forum for appeal of Nam Tai’ from the proceedings in the British Virgin Islands. When the Privy Councils finalizes the judgement, Nam Tai is going to comply with the judgement by means of reinstating the redeemed shares and registering them in the name of the Bank of China.
Nam Tai Electronics, Inc.is an electronics manufacturing and design services provider to some of the world’s leading original equipment manufacturers of telecommunications and consumer electronic products.