China Taiping continues to pay for Ashurst’s incompetence

On the 28th of June 2021, Ashurst Australia paid me $46,000 for costs awarded against their client China Taiping in a hearing before the Supreme Court of New South Wales. The judgement is available here.

This $46,000 plus the hundreds of thousands (or more) of Ashurst’s direct and indirect costs to China Taiping could have been avoided if their lawyers were competent. China Taiping, please learn from your mistakes – using Ashurst is just too costly, not in terms of hourly rates, but in terms of the amount of new and innovative loss they can create for their clients, and in Sargon’s case, the wider Australian economy including Westpac and 30+ individual investors.

Why did Ashurst send me this money?

After blowing up Sargon by appointing Receivers in January 2020, Taiping so far has recovered less than A$4 million (before the costs of multiple court hearings), compared to the A$113 million they’d invested in Sargon (primarily in equity exposure).

This A$109 million+ loss is directly attributed to Ashurst’s advice to appoint Receivers in apparent ignorance or disregard of their client’s investment position. The first and most natural consequence of any receivership appointment over a company is to devalue equity in the company (generally to nil) and destroy the rights attached to that equity. When your exposure is many multiples more equity than it is debt, and there’s nothing materially wrong with the business, you do not appoint receivers.

When you are Ashurst, and you had one job to do, and you fail to the tune of more than $100 million Australian dollars, you need to find someone to blame. They decided to go after me – which has started to prove to be a mistake for them, given litigation actually requires evidence to succeed, as opposed to spurious allegations with no basis. This hasn’t stopped them with briefing journalists directly and indirectly with their fabricated stories and threatening “to destroy them” if they write anything else.


Over half a year after appointing Receivers and still no closer to any meaningful recoveries, Ashurst were scrambling for alternative recoveries and filed litigation against me in the Supreme Court of New South Wales regarding a HK$653m financing facility between ten (10) entities, including myself, a joint venture entity with China Taiping themselves, an entity associated with Dr Aron Ping D’Souza, a Hong Kong entity which China Taiping were a primary beneficiary of, and China Taiping’s subsidiary China Insurance Group Finance Company Limited (“China Insurance”, another of China Taiping’s business fronts, along with the now-well-known Taiping Trustees Limited).

Financial Substance

Sargon was not a party to this financing agreement, however the facility was used by China Taiping to gain exposure to Sargon equity via trusts and share pledges (which constituted ~80%+ of the security and accounted for ~25% of the funds deployed under the facility). Ironically, this means that, by advising that Taiping Trustees to appoint Receivers over Sargon, Ashurst destroyed the security position of their other client, China Insurance, under this larger HK$653m facility. Perhaps the eight-month delay wasn’t to prepare for the litigation, but to figure out how to let their client know what they’d done. Specifically the security that Ashurst blew up in an instant took me and a hundred others 6 years to build, cost hundreds of millions of dollars and was worth many multiples of the total facility size at their own valuations that they routinely provided to their own internal and external auditors.

Ultimately, they destroyed more than 80% of the security and then seemed to ignore the remainder, instead deciding to sue me personally despite me not personally holding any of the security pledged under the facility, nor having any personal benefit of the money originally advanced, nor holding any of the investments made through it. The first thing Ashurst did on their crusade against me was to rush through an urgent “freezing order” application. Ashurst’s great legal minds had determined that it was now (after eight months) extremely urgent to freeze my assets – so urgent, in fact, that they tried to make their application ‘ex parte’, meaning I wouldn’t even have a chance to present a defence. Thankfully, the judge must’ve realised something was fishy, because they refused to do that and ordered a contested hearing instead.

What did Ashurst claim?

Obtaining a freezing order is considered ”drastic” and requires more than just a claim that money’s owing – China Taiping needed to establish some form of imminent threat that I’d dissipate my assets (those that they hadn’t already destroyed1) or that my “probity could not be relied upon” (in other words, I couldn’t be trusted). After almost nine months of prep time, this is what Ashurst came up with:

  • McGrathNicol, following their appointment as receivers over Sargon Capital, expressed “concern that funds may have been misappropriated or misdirected” by me from Sargon.
  • I had not “acceded fully” to requests by McGrathNicol regarding the Sargon receivership.
  • I don’t own any real estate in Australia and “may” have structured my affairs to avoid ready identification of my assets.
  • I’d “appeared” to evade service of China Insurance’s lawsuit.

Note that the quotation marks above were the judge quoting the exact words used by China Insurance’s barrister, presumably to emphasise just how equivocal and speculative they were. In support of these “arguments”, Ashurst presented the following “evidence”:

  • An affidavit from each of Shaun Fraser and Jason Preston of McGrathNicol (who’d each taken personal liability upon accepting the receivership appointment, had their bills paid by China Taiping, were referred by Ashurst to this opportunity, and are routinely referred work by Ashurst) where they noted that they’d failed to trace parts of the first A$50m drawdown under the HK$500m (~A$81m) promissory note and alleged that these “funds may have been misappropriated or misdirected”.
  • An allegation that I had somehow ‘misled’ China Taiping when drawing down the remaining A$31m.
  • An allegation, based on evidence given to the court by the Receivers, that I had changed the trustee of the Trimantium Sargon Investment Trust after the receivership appointment to “obstruct” the Receivers.
  • An allegation that I’d invested the funds under the facility ”in companies which [I have] no known legal relationship”.
  • An affidavit from a process server indicating they’d tried an intercom at my old address a few times and received no response.

What actually happened?

Every single one of these attacks on my character were rejected by the Court.

When it came to misdirecting money, China Insurance’s barrister conceded in court that the Receivers didn’t actually know what had happened with the money they’d failed to trace – in other words, they were jumping to defamatory conclusions with no basis beyond their own inability to do their jobs. In fact – as China Taiping would have known – the entirety of that A$50m drawdown is ultimately traceable to Trimantium Taiping Investment Management’s investment in A$50m of Sargon seed preference shares, as directed by China Taiping, clearly stated in the drawdown request signed by China Taiping, and negotiated extensively between the parties and their lawyers in the first half of 2018.

What’s more, these shares were still owned by Trimantium Taiping Investment Management (by then renamed to Trimantium Investment Management) when Shaun Fraser and Jason Preston were appointed receivers over it. The assets were in their possession all along – perhaps they’d conveniently overlooked them because their value immediately became zero when McGrathNicol accepted the appointment. Similarly, with the second drawdown, the investments made with it were ultimately held exactly where they were required to be, and were within the control of Shaun Fraser and Jason Preston when they made these affidavits claiming that the funds may have been misappropriated. It’s not surprising, then, that the judge concluded “I do not see the Receivers’ tentative conclusions to be a sound basis upon which to draw any conclusion about Mr Kingston’s probity”.

McGrathNicol’s concerning disconnect with the facts continued on to the ‘obstruction’ allegations – the change in trustee they swore to the Court occurred after their appointment had in fact occurred months before the appointment, and McGrathNicol were notified of this (and provided a copy of the relevant documents) months before they made their sworn affidavits. When this was pointed out, China Taiping’s barrister was put in the awkward position of trying to argue that while “the Receivers had been mistaken in their assertion that Mr Kingston had effected the change of trustees after their appointment  […] the change of trustees occurred around the time when China Insurance served notices of default on Mr Kingston2 [… therefore] Mr Kingston’s replacement of TCFM as trustee of the Trust should be seen as an example of him “obstructing” the Receivers (although they had not then been appointed).” The judge was clearly unimpressed: “In my opinion, it is drawing a long bow to conclude from these matters that Mr Kingston has acted in a way that suggests that his probity cannot be relied on”.

Ashurst’s remaining arguments were dismissed even more briefly: as my barrister pointed out to the Court, these entities I had ‘no known legal relationship with’ were all parties to the contract between myself and China Insurance. What’s more, I wasn’t the one investing through those companies – China Taiping was.

As to my failure to ‘accede fully’ to the Receivers’ requests, the Court felt it necessary to note: “Mr Hartford Davis [China Insurance’s barrister] did not develop this submission with great enthusiasm.

It’s not surprising Ashurst and Mr Hartford Davis appear to have parted ways on the case soon after (one of many times China Taiping have switched counsel; presumably they each got sick of getting embarrassed trying to salvage terrible briefs). Ultimately, “Mr Hartford Davis accepted that China Insurance could not point to any imminent threat of dissipation by Mr Kingston of his assets or of any “other special feature of the case beyond the Receivers’ expressions of concern.”

The judge then goes on to say “the “structure” [of my affairs] of which complaint is made is not identified, nor does China Insurance point to any relevant change in the structure brought about by Mr Kingston” – a very accurately worded observation, given the only relevant change to the structure was the destruction of Sargon brought about by Ashurst.  The final attack on my integrity, that I’d ‘evaded service’, was so thin that the Court concluded that “I do not see these matters as warranting a conclusion, nor even a suggestion, that Mr Kingston was “evading” service”.

In conclusion

To sum it up, each of Ashurst’s claims were either clearly wrong or lacked any evidentiary basis. Clearly, evidence is something that Ashurst considers only after making submissions to Court. Getting something wrong innocently in Court is not a crime, so to have that plausible deniability, they mustn’t want to see any evidence until they’ve settled their submissions and sent them off to Court – throwing both McGrathNicol and their barrister under the bus in the process.

These Big Law tactics to squash individuals are bundled up in the practice of “legal strategy” and resulted in the public being presented with a narrative that I had stolen money (in excess of A$40 million) and my probity was to be questioned, all in order to freeze my personal assets and put me on a stipend salary for the next 2-3 years. This means they can continue to defame and destroy my reputation, rebuild theirs, try to re-write the Sargon/China Taiping story as a success or at least legally justified all in the period were I have a limited ability to “fight back”.

Thankfully, judges still look at evidence, and ruled against China Insurance. The freezing order application was dismissed, and the judge awarded costs in my favour. In the end I got about 75% of my actual out of pocket costs.

Of course, Ashurst haven’t bothered to go back to all the people they tried spreading these “arguments” against my probity amongst (including all the media they’ve been briefing over the past eighteen months) to inform them the allegations they were spreading about my character were all dismissed. Neither has McGrathNicol retracted their “expressions of concern” regarding funds being misappropriated, which were ultimately without basis but nonetheless were spread amongst stakeholders and interested parties, including both Wexted Advisors (Sargon’s liquidators, who Ashurst referred for the appointment and then hung out to dry by having McGrathNicol take all the cash and leave Wexted with only A$50k for their costs of liquidation) and EY (who managed the administration of most of Sargon’s subsidiaries, opposed by China Taiping, and ultimately only managed to recover cents on the dollar through a distressed sale process that required an 11th-hour Federal Court application contested by Ashurst and China Taiping after they walked away from a deal that they had previously agreed to at the last moment).

With all the Promissory Note principal accounted for, McGrathNicol is left with nothing to justify their appointment except the alleged non-payment of interest in December 2019 – which, as I’ve previously stated, is as wrong as every other self-serving fabrication postulated by Ashurst and China Taiping. Sargon’s finance team authorised the now-infamous A$4.4m December payment on the basis it was for the Promissory Note (as Ashurst and China Taiping have had ample opportunities to confirm through examining Sargon’s books and records and examining its officers under oath at Public Examinations), and I’d always understood that China Taiping’s finance team applied it to the Promissory Note (given that’s what I was told by Taiping Trustees at the time). As I’ve discussed in previous posts, any other application by China Taiping of that A$4.4m of Sargon’s funds would have had no legal or commercial basis – Sargon didn’t owe any payment obligations to any company in the China Taiping group other than under the Promissory Note. Given that Ashurst was also planning the appointment of receivers over Sargon, you’d expect that they would have advised China Taiping of the risk of this payment being a recoverable transaction and unwound by Sargon’s eventual liquidators if misapplied. Ultimately, it’s worked out conveniently for them that they left Wexted unfunded.

If Ashurst continues with this haphazard litigation campaign they’ve started against Australian companies and citizens, I expect that final nail will come undone and they’ll no longer be able to hide the truth. At that point, this $46,000 will be a drop in the bucket compared to the eventual compensation they and their client will have to pay to the victims of their actions.

Ashurst’s “strategy” of having McGrathNicol phone up leaders in the Australian business community and telling them I stole money is going to come out, and it’s not going to be pretty for either of them.


1 I had invested 95%+ of my personal assets into Sargon between 2013 and 2019, the proceeds of all my prior entrepreneurial efforts and salary income.

2 This ‘fact’ is also untrue, which would have been obvious to Mr Hartford Davis if Ashurst had included a timeline of documents in his brief.