Hong Kong film studio hit with multimillion lawsuit over cinema closure

Golden Harvest subsidiary accused of breaching its six-year lease due to expire end of September when it shut cinema GH Kai Tak in April

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GH Kai Tak, located at Yue Xiu Plaza in San Po Kong, closed in April. Photo: Handout

Published: 7:15pm, 23 Aug 2024Updated: 7:56pm, 23 Aug 2024

A major Hong Kong film studio has been slapped with a multimillion lawsuit for allegedly violating contractual terms when it shut down a cinema earlier this year, in a fresh blow to the industry which has struggled to recover from the economic downturn.

A High Court writ reviewed by the Post on Friday claimed the closure of GH Kai Tak in April constituted a breach of its six-year lease originally due to expire at the end of September this year.

M Cinemas Company Limited, a Golden Harvest subsidiary that operated the venue at Yue Xiu Plaza in San Po Kong, allegedly failed to pay rent and miscellaneous charges since December last year, as well as neglected to restore the premises to their original state.

Landlord Merry Growth Development Limited also accused the Golden Harvest arm of failing to give six months’ advance notice to terminate an automatic renewal clause that would have extended the latter’s tenancy by another three years.

The court filing claimed the plaintiff suffered a loss of HK$5.16 million (US$661,870), which could snowball to a sum in excess of HK$17 million, if the shopping centre could not find a new tenant in the next three years covering the extended period of the rescinded contract.

Merry Growth Development is controlled by Yue Xiu Enterprises, an investment vehicle of the Guangzhou municipal government.