Re Gold-finance Holdings Ltd

HCCW 172/2019

[2021] HKCFI 1674

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 172 OF 2019

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D E C I S I O N

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1.I have before me an application pursuant to section 227A(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32 for a regulating order which will provide that the joint and several liquidators are to be Lai Kar Yan (Derek), Ho Kwok Leung Glen and Yip Wa Ming (Ben), subject to one matter which I shall refer to later. The Official Receiver has no adverse comments on the application. The application is unopposed.

2.The Company is incorporated in the Cayman Islands.  Its shares were listed on the Main Board of the Stock Exchange of Hong Kong.  On 5 June 2019 provisional liquidators were appointed in Hong Kong.  Initially attempts were made to restructure the Company, this proved unsuccessful.  On 3 May 2021 a winding up order was made.  The provisional liquidators who it is proposed to appoint as liquidators were the provisional liquidators.  As a consequence, they are very familiar with the affairs of this Company which is deeply insolvent and only has available cash of slightly over HK$9 million.

3.The circumstances in which the court will make a regulating order are well-established.  Commonly, an order will be made where by virtue of the large numbers of creditors, and possibly contributories if they are likely to take an interest in the liquidation, it is not considered practicable or cost effective to convene meetings of creditors and contributories.

4.This case is something of a paradox.  Although the Company is listed, from the attempts of the provisional liquidators to assess the interest of creditors and the ultimate investors with interests in the Company’s shares—I do not think is necessary for me to delve into the consequences of the fact that the shares are held through the Central Clearing and Settlement System—it would appear that there is insufficient interest for it to be likely that quorate meetings could be conducted.

5.It seems to me that in the circumstances making a regulating order is appropriate and in the interest of the unsecured creditors of the Company.  The one issue which has been raised by the Official Receiver is the identity of the liquidators.  On the face of the matter it is sensible to appoint as liquidators the individuals who are currently the provisional liquidators.  The query that has been raised arises from the fact that the prospective liquidators are also the liquidators of another company within the Gold-Finance Group which the Company owes approximately HK$626,000, therefore, on the face of the matter, it is suggested there may be a conflict in having the same professionals acting as liquidators of both companies.

6.However, having regard to the fact that the debt in question represents only 0.2% of the Company’s total liabilities and the very small amount of realised assets, as I have already mentioned just over HK$9 million in cash, and there being no realistic prospect of any further asset being realised, it seems to me that the conflict is fairly theoretical. I will, therefore, make an order in the terms of the summons which will appoint Lai Kar Yan (Derek), Ho Kwok Leung Glen and Yip Wa Ming (Ben) as joint and several liquidators.

Mr Look Chan Ho, instructed by DLA Piper Hong Kong, for the petitioner

Mr Yip Wa Ming, the joint and several provisional liquidators, for the respondent (Gold-Finance Holdings Limited)

The attendance of the Official Receiver was excused