Shih-hua Investment Co Ltd v. Zhang Aidong and Others

HCCW 198/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO. 198 OF 2016

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D E C I S I O N

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1.I am unable to see any merit in this application for interim stay. It should be noted that the issue of any irremediable prejudice which might be suffered by the 1^st and 2^nd Respondents (Respondents) if the Reconstitution Application[1] was granted was considered by the court (see para 67 of Decision dated 19 January 2017 (Decision)), and none was demonstrated.

2.The “prejudice” which is being argued now is, primarily, the suggested damage to Zhang’s reputation if he is removed from the Board.  Apart from being a new point, I find the suggestion illusory and lacking in particulars.  The 2-day hearing where allegations of impropriety on Zhang’s part were ventilated was open to the public.  The Decision is available to the public.  Zhang is of course entitled to appeal the Decision, but I can see no reason or logic that he should be treated differently to any litigant who has lost his case and launched an appeal.  The losing litigants can always say that their reputation has been tarnished. 

3.Further, Zhang’s eagerness to protect his reputation does not sit well with the fact that the Company’s fortune has apparently collapsed under his management, and he was perfectly prepared to have PL taking it over. 

4.On the other hand, Shih-Hua is a 50% owner of the Company and entitled to an equal say in its management.  For too long, Zhang has been trampling upon the rights of Shih-Hua.  The affairs of the Company have been kept entirely dark.  With respect, I am unable to see much substance in the proposed appeal. 

5.In the premises, this application is dismissed. I also decline the application for an interim stay pending an application by the Respondents to the Court of Appeal for such a stay.   

6.The parties are in agreement that the Respondents’ application for leave to appeal and stay pending appeal as per their Summons filed on 2 February 2017 should also be dismissed by the court following this determination so that the matters can then be pursued before the Court of Appeal.  Accordingly, that Summons is dismissed.

7.I shall hear the parties on costs.

Mr Chua Guan Hock SC and Mr Robert G M Chan, instructed by Alvan Liu & Partners, for the Petitioner

Mr Martin Wong and Ms Astina Au, instructed by Jun He Law Offices, for the 1^st and 2^nd Respondents

Mr D Whitehead of White & Case, for the 3^rd Respondent

Mr Charles Sussex SC, instructed by Holman Fenwick Willan, for the Opposing Creditors