Read the full judgment text of HCCW 63/2017; HCB 1361/2017 on BabelCite. This Court of First Instance judgment was delivered on 21 May 2018 before Hon Ng J.
Company law – winding-up and bankruptcy – statutory demands – whether genuine dispute of debt on substantial grounds – whether genuine and serious cross-claim against petitioner – whether winding-up of BVI-incorporated unregistered company should be ordered – Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) s.326(1) and s.327(3)(b) – Bankruptcy Ordinance s.2 – Securities and Futures Ordinance s.108 and s.114 – corporate identity – three core requirements for winding up foreign company – December 2015 facility agreement for HK$435 million term loan to BVI company – personal guarantee by director and beneficial shareholder – outstanding debt of HK$167,740,831 – whether alleged August and December Advice and Representations and Alleged Assurance by senior HT Group executive could defeat the petition – whether cross-claim against HT Group and HT Securities can be set off against petitioner – whether Company Loan was illegal unlicensed securities margin financing – whether HT Group shares held in margin account with HT Securities constituted security for the petitioner – whether the court should exercise its discretion to wind up a foreign company where it holds substantial Hong Kong-listed securities, has a Hong Kong bank account, has appointed a Hong Kong process agent and has a Hong Kong-resident director and shareholder – mutual liability for failure to make statutory demand challenge – petitioner is subsidiary of HT Group while HT Securities is another subsidiary – petitioner is a separate legal entity from HT Group and HT Securities under Salomon v A Saloman – cross-claim requires mutuality against petitioner, not merely its parent or sister company, following Re The Sun's Group Ltd and rejecting Atlantic & General Investment Trust Ltd v Richbell – debtor's bare assertions unsupported by contemporaneous documents, including WeChat messages, transcripts of calls, lawyers' initial correspondence and debtor's own 31 March 2017 letter proposing repayment of principal within five years – plea of illegality under s.114 SFO untenable because loan purpose was to refinance debtor's personal indebtedness, not to acquire or hold securities – first and second core requirements satisfied by presence of substantial securities in Hong Kong and Hong Kong bank account, following Re China Medical Technologies Inc – third core requirement satisfied because Hong Kong-incorporated creditor HT Securities is amenable to the court's jurisdiction – Kam Leung Sui Kwan v Kam Kwan Lai applied – winding-up order and bankruptcy order made – costs to petitioner with certificate for two counsel.
Legal issues: Whether the Company/ Debtor has established a genuine dispute of the Debt on substantial grounds or a substantial cross-claim extinguishing the Debt · Whether the Company Loan was illegal as unlicensed securities margin financing under s.114 SFO · Whether the petitioner's position is secured by substantial assets in the Company's name exceeding the Debt · Whether the court should exercise its discretion to wind up a BVI-incorporated unregistered company
Outcome: Winding-up order made against Hong Kong Investments Group Limited; usual bankruptcy order made against Mr Cheung Chi Mang; all four grounds of opposition rejected.
Cited by 33 cases · Cites 9 cases