REVEALED: Liverpool bidder Kenny Huang in embezzlement puzzle as doubts remain over background

By Nick Harris

9 August 2010

Kenny Huang, the Chinese businessman who hopes to lead a takeover of Liverpool financed by backers yet to made public, was sued in March last year in America over allegations that he embezzled $2.9m in a business deal.

This is one of five legal actions against him in the USA, past or ongoing, that sportingintelligence has learned about to date, and details of each have been confirmed by his Miami lawyer.

In the $2.9m case, it was alleged he was given the money by a Florida-based import company, AutoChina, to help pay for deals involving the exportation of vehicles from China.

The case initially went against Huang when the judge made a “default motion” against him; this was because Huang did not respond to the writ against him.

After a civil trial in Florida earlier this year, Huang won, with none of the claims against him proven. He was also awarded costs of more than $300,000. An AutoChina appeal is ongoing.

In a twist today, sportingintelligence has discovered that Huang lied under oath about his background during the trial. He claimed to be the leader of an investment group that owned 15 per cent of the NBA basketball team, the Cleveland Cavaliers.

He was asked directly: “You are the leader of an investment group that owns 15 percent of that basketball club?”

He replied: “Correct”.

As the NBA told the Financial Times last week: “Mr Huang has never had an ownership interest in the Cleveland Cavaliers or any other NBA team nor was he ever affiliated with an owner of an interest in an NBA team.”

Huang also claimed, according to an official transcript of the trial, which is available for public scrutiny and has been obtained by sportingintelligence, that he was “sitting on the board of Bank of Communications, assets management, which is the fourth largest bank of China.”

According to the Bank of Communications, he is not on the main board.

A spokesman for Huang said: “He is on the board of one of the bank’s asset management funds, not the main board.”

A number of other claims that Huang made in court about his background and business dealings have yet to be verified as true.

Concerns over the authenticity of Huang’s current business credentials are heightened by the fact that one of the parties behind the allegations of embezzlement was David Herzig, who remains, with Huang, listed as a co-director in one of Huang’s firms, Aspen Infrastructure.

But Huang’s lawyer, Lida Rodriguez-Taseff, a partner in Duane Morris LLP, based in Miami, says that the business relationship between Huang and Herzig “has been over for a very long time, and it is purely through oversight of the parties to remove the website [from the internet] that it is still there.”

Ms. Rodriguez-Taseff has told sportingintelligence that Huang has won three other cases against him; these were related to AutoChina and involved accusations of tortious inference with a business relationship, fraud, and defamation (and conspiracy to commit all three of those), and a breach of fiduciary duty.

Ms. Rodriguez-Taseff insists Huang has “won” all those cases and says they are, effectively, finished for good. She concedes, however, that “a lawsuit stays on the books for ever and ever”, and sportingintelligence understands parties involved in those cases are pursuing, or are planning to pursue, further action.

Kenny Huang has one judgement against him, Ms. Rodriguez-Taseff confirmed, relating to unpaid debt from the 1990s. The debt at the time of the judgement against him was $788,300 (and 54 cents), according to a legal document that states the debt would accrue interest at 10 per cent per year. Huang was resident in Las Vegas, Nevada, at the time of judgement (1998), and his appeal is ongoing.

Sportingintelligence has put a series of questions to Huang’s PR representatives at Hill & Knowlton in their offices in London and Hong Kong relating to his background and business dealings. The majority have yet to be answered.

Sportingintelligence has established that Huang is now a US citizen and US passport holder whose main residence is in New York, where he lives with his wife, Louise, and two children.

He may or may not have a qualification from Columbia University, New York. He says he studied there. Checks show he never graduated.

He has claimed he was the first person educated in mainland China to work on the New York Stock Exchange. No corroborative evidence has been produced.

It remains possible that Huang does front a “credible” bidding team for Liverpool, although the most substantial business figure so far linked to that group has yet to confirm or deny his own involvement. That person is Dr Guang Yang of the hugely respected Templeton Equity Group.

In statements to the Telegraph newspaper and to the Financial Times late last week, different spokespeople for Templeton denied the involvement of either Templeton or Yang in Huang’s group.

Dorine Johnson, a spokeswoman for Templeton, reiterated to sportingintelligence today: “I’d like to confirm that we have no involvement with the Liverpool FC bid. I would refer you again to our statement: ‘Franklin Templeton has no involvement in the Liverpool FC bid and Guang Yang, EVP, Templeton Equity Group, has also stated that he has no involvement’.”

Liverpool’s board wants proof of funding from bidding groups to be provided this week. The Independent reported on Saturday that Huang remained in talks at that time with Liverpool about a £400m – £450m package to safeguard the club’s future. This piece included “an acknowledgement that the consortium of investors he has gathered does not have the funds to relocate Liverpool immediately to a new stadium and that he cannot say when that vital move might happen.”