- 40 -
Pursuant to a decision on April 12, 1984, of the board of
directors of Forward (viz., petitioner, Ms. Gaw, and Mme. Koo), a
$325,000 fixed deposit in the name of Forward (Forward $325,000
deposit) was pledged as security for the original UB $325,000
loan and all renewals of that loan.27 That deposit was in the
same amount as that loan and was maintained in Standard Chartered
Bank HK.28 Throughout the period April 1984 until July 10, 1986,
during which the Forward $325,000 deposit served as security for
the original UB $325,000 loan and the renewals of that loan,
Union Bank maintained a lien on that deposit.
The interest rate on the original UB $325,000 loan was set
at Union Bank's LIBOR plus 1.5 percent or its prime rate plus 1
percent. The original UB $325,000 loan was to bear interest at
Union Bank's LIBOR plus 1.5 percent if Radcliffe selected that
rate in a manner essentially the same as that described above
27 The pledge of the Forward $325,000 deposit was documented by
a security agreement signed by Mme. Koo on behalf of Forward.
28 The parties stipulated that the Forward $325,000 deposit was
maintained in Standard Chartered Bank HK. Certain records of
Union Bank indicate that that deposit was placed with Standard
Chartered Bank, Singapore, through Standard Chartered Bank HK.
Other records of Union Bank concerning that loan do not indicate
the affiliate of Union Bank in which that deposit was maintained.
We find the meaning of those Union Bank records unclear, and,
accordingly, we do not find the parties' stipulation that the
Forward $325,000 deposit was maintained in Standard Chartered
Bank HK to be clearly contrary to the facts disclosed in the
record. Consequently, we will accept that stipulation under the
test of Cal-Maine Foods, Inc. v. Commissioner, 93 T.C. at 195-
196.
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