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The Honolulu Advertiser
Posted on: Tuesday, August 8, 2006

Ouster of two Kukui directors sought

By Rick Daysog
Advertiser Staff Writer

A dissident member of the Kukui Gardens Corp.'s board of directors is seeking the removal of two of the company's directors, throwing a legal obstacle before the $130 million sale of the affordable rental project.

In a filing in state Probate Court yesterday, Wallace Ching asked that a judge void the appointments of local attorney Peter Ng and retired banking executive Jack Tsui to boards of Kukui Gardens Corp. and the Clarence T.C. Ching Foundation.

Ching, the son of Kukui Gardens' late developer Clarence Ching, opposes the sale of the 22-acre apartment complex to San Francisco-based Carmel Partners.

The 36-year-old Kukui Gardens is one of the state's largest affordable rental projects that was built with financing from the U.S. Department of Housing and Urban Development.

In January, the owners announced that they would sell the apartments, raising concerns from tenants, state lawmakers and community leaders that a buyer would raze the project and build more expensive housing.

Wallace Ching said that the Ching Foundation named Tsui and Ng to its board in March, even though neither were on the official list of nominees and neither were elected by the majority of the foundation's board as required by the foundation's rules.

All five trustees of the Ching Foundation automatically become members of Kukui Gardens Corp.'s 15-member board. Any director who resigns or is removed from the Ching Foundation must step down from Kukui Gardens Corp.'s board, Ching said.

Ng would not comment yesterday, saying he was unaware of Ching's filing. Tsui could not be reached for response. A spokeswoman for Kukui Gardens Corp. would not comment yesterday, saying the company is still reviewing Ching's complaints.

Ching filed a separate lawsuit in state Circuit Court yesterday against Kukui Gardens Corp. and its board, alleging that the company didn't provide him with details of the sale of the Kukui Gardens housing project.

Ching said that the company failed to provide documents relating to its efforts to obtain HUD approval for the sale, and failed to disclose that it had hired Washington, D.C., lawyers to lobby HUD.

Ching's suit asked that a judge order the company to hand over records and bar the company from holding future board meetings until it provides those records.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.