Y v. A and Others

HCCW 435/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 435 of 2012

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DECISION

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1.I have before me a summons dated 23 April 2015 seeking orders pursuant to section 221 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32, for the production of documents and the examination of the various respondents to the application.

2.Much of the application has been dealt with by consent between the liquidators and the respondents.  However, there are three respondents who have taken no part in the application.  It is unclear whether or not these three respondents, the 3^rd to 5^th Respondents, have notice of the application or are aware of the liquidators’ wish to talk to them about the affairs of the Company. 

3.The three respondents were not officers of the Company nor were they employed by it.  The liquidators wish to talk to them because it is believed that they may have been the beneficial owners of three companies who formed part of a chain of legal entities through which very significant sums of money appear to have been misappropriated from the Company.

4.It seems to me that generally the Companies Court should be slow to make applications pursuant to section 221 against persons who were not officers of the relevant company, who have not been contacted by the liquidators and where there is no evidence of them have tried to avoid the liquidators.

5.It seems to me that there needs to be some special reason which justifies making an order in such circumstances.

6.In this case I am satisfied that there are special circumstances.  The misappropriation of money to which I have referred seems to have arisen as a result of a very significant fraudulent scheme perpetrated on the Company.  It may be that the 3^rd to 5^th Respondents had no involvement in that scheme.  However, even if that proves to be the case, it seems to me to be reasonable given the magnitude of the prima facie wrongs done to the Company, to make the order that the liquidators seek in the hope that it does come to the attention of the 3^rd to 5^th Respondents, and as a result they are able to provide some assistance to the liquidators even if it is no more than explaining that their names have been misused.

7.I will, therefore, make an order in terms of the draft that has been provided to me save that paragraph 9 of the order will simply provide that the 3^rd to 5^th Respondents have liberty to apply to set aside the order.  I will impose no time period for any such application to be made.  I will also reserve costs.

Representation removed for the reason of confidentiality