The Spectacular Implosion of Dr. Cho’s ‘Nefarious Network’

The Hong Kong billionaire known as the “King of Toys” says he was asleep at 8 a.m. on a Sunday morning two years ago when Roy Cho Kwai-chee showed up at his gated three-story town house. Cho, a doctor who ran a chain of health-care clinics, had brought his wife and elderly parents along, and he was crying. He said he needed money. A lot of money.

The billionaire, Francis Choi Chee-ming, had a lot of money. He controls the world’s largest toy manufacturer, churning out Transformers and My Little Ponys for companies such as Hasbro Inc. and Mattel Inc. He’s worth $4.8 billion, according to the Bloomberg Billionaires Index, making him one of the richest men in Hong Kong. Twelve years before that Sunday morning, Choi became an investor in Cho’s company, Town Health International Medical Group Ltd. Over the years, he had loaned the doctor money—a few million dollars here and there—but this time was different, Choi recalls. A network of as many as 40 companies linked to Cho was crashing down. He needed HK$2 billion ($255 million) to save it.