In a brazen piece of legerdemain, one of Hong Kong's most powerful families is poised to get millions of dollars from under the nose of vLink Global, a young internet investment company that has become the focus of a three-way power struggle between Samsung Securities of Korea, GE Asia Pacific Capital Technology Fund of the US and the Heung family of Hong Kong.

Since listing its shares for the first time on the Hong Kong Stock Exchange in April 2000, vLink's boardroom has come to resemble a battlefield, with one group of directors succeeding another after a matter of weeks or even days. Last month, the company's original management, headed by Jimmy Wong, former managing director of Microsoft in Hong Kong, sold their shares and resigned en masse after founding shareholder Yu Ming Investments said it would sell its 13.9% stake to Sheen Target Technology, a company owned by Andy Heung Wah-kwok.

The Heung family is a powerful unit and considered by many in Hong Kong to be one of the city’s most formidable adversaries in any corporate struggle. Barely two weeks after Sheen became a shareholder of vLink, management sold their collective 6.9% stake to an unnamed buyer who one former vLink director described as "connected" to Heung. The outgoing management said they were leaving because they couldn't reconcile the interests of its three main shareholders.

The battle, however, isn't over. Samsung and GE have taken up cudgels in defense of the nearly HK$495.6 million ($63.5 million) raised by vLink in its listing. vLink's original management had earmarked the funds for investment in young technology companies.

By September last year it had targeted several companies and was ready to set up a fund in Korea. But Yu Ming, a Hong Kong investment company whose cash-on-hand plummeted 47% in 1999 to HK$259.73 million following some property investments, had other ideas. The company took out an injunction preventing vLink from investing HK$324 million it had committed to two internet companies.

In statements to the stock exchange, Yu Ming argued that vLink's board was trying to rush the plan through without giving directors enough time to consider the proposal. Some observers suspected Yu Ming had its eye on the cash.

As the battle escalated, Yu Ming, which is run by former vice chairman of the stock exchange Tony Fung, suddenly announced it would sell its stake to Heung's Sheen Target Technology. Several days later, vLink's chief executive and managing director resigned. Other senior managers followed.

So far, no new management team has been announced. Yet the board, which is dominated by Heung and people connected to him, has already proposed to invest HK$255 million of vLink's funds in an online video company called WebVideoShop.com. According to its web site, WebVideoShop was set up in November 1999 by CW Heung, together with Alfonso Fung and IdeaAsia.com, a company registered in the name of Richard Hui that has yet to get up and running.

According to a person who has seen the terms of the proposal, the HK$255 million investment would be paid to WebVideoShop. Since the amount under consideration is slightly less than 50% of vLink's net asset value, it does not require the approval of shareholders Samsung and GE, who collectively hold 47% of the company.

Neither Samsung nor GE are willing to let the transaction through without a fight. Samsung and GE have called a special shareholder meeting for February 13 to elect 12 new members to the current seven-person board; and Samsung has also taken out a writ, filed in Hong Kong's High Court, to stop vLink from investing in WebVideoShop.

The battle for control of vLink is symptomatic, some argue, of the lack of transparency in Hong Kong's financial markets. It illustrates how even big-name investors such as GE and Samsung can find themselves sucked into a legal and political quagmire by a small but powerful Hong Kong clique.

The city-state's financial secretary, Donald Tsang, has pledged for at least three years to reform Hong Kong's financial system and provide more protection to investors and shareholders.

If the vLink saga is anything to go by, he hasn't had much success.