Re Ozner Water International Holding Ltd

HCCW 430/2020 & HCMP 733/2022
(HEARD TOGETHER)
[2022] HKCFI 2875

HCCW 430/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 430 OF 2020

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AND

HCMP 733/2022

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 733 OF 2022

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(HEARD TOGETHER)

Before:  Hon Harris J in Court

Date of Hearing:  7 September 2022

Date of Decision:  7 September 2022

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D E C I S I O N

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1.I have two applications before me. The first is the Company’s petition issued by its Liquidators for sanction of a scheme of arrangement compromising the debt between the Company and its unsecured creditors. The second is an application for a conditional order for the permanent staying of the current winding up proceedings to which the Company is subject.

2.A meeting of unsecured creditors as directed by the court took place on 20 June 2022 and the scheme was approved by the necessary statutory majority.  No creditor has appeared before me today to oppose the petition.  I am satisfied that the principles which govern the court’s assessment of a petition of this sort are satisfied in the present case and I will make an order in the terms of the draft presented to me.

3.In respect to the second application, there is one matter which justifies comment.  The Liquidators have returned to the Official Receiver an interim Form D2 which contains information suggesting that there are matters that require further investigation concerning the director’s conduct of the affairs of the group of which the Company is the apex.

4.The Liquidators propose that the Office Receiver’s concern that the granting of an order permanently staying the winding up would stifle the continuation of an investigation of the matters to which the Liquidators refer in the interim Form D2 be dealt with as follows.  The intermediate subsidiary owned by the Company which controls the majority of the operating companies within the group is also in liquidation with the same Liquidators as those appointed over the Company.  It is, therefore, possible for the Liquidators to continue to investigate the matters which they have identified as requiring investigation and to provide such assistance as the Official Receiver may require if it is decided that those matters justify disqualification proceedings being commenced against the directors of the Company.

5.In terms of the formal order that is to be made, what is now proposed is that it takes a form different to that originally put before me.  The order will provide that all further proceedings in the winding up of the Company be permanently stayed and the Applicants be released and discharged if the following conditions are satisfied: (1)  there is a publication of a resumption of trading notice by the Hong Kong Stock Exchange (“HKEX”)  in respect the shares of the Company; (2)  the Liquidators have filed either a Form D1 or D2 with the Official Receiver.  In addition, the order will include a direction that the Official Receiver’s costs today of their conduct and involvement in the winding up be paid out of the assets of the Company in sum of HK$48,951.50.

6.As is apparent from my explanation of the terms of the order, the shares of the Company, which is listed on the HKEX, are currently suspended.  If the HKEX is not satisfied that the conditions that it has imposed on the Company, if trading in its shares is to resume, are not satisfied and the listing is cancelled, it follows that the winding up of the Company will continue and the matter to which I have referred will not arise.

7.If the Liquidators and the investor, who has made the scheme possible are successful in achieving a resumption of trading then the Liquidators have indicated through counsel to me that they will provide the Official Receiver with such assistance as is required if the Official Receiver thinks it appropriate to commence any disqualification proceedings against any director of the Company.

Mr John Hui and Mr Terrence Tai, instructed by Simmons & Simmons, for the applicants (in both actions)

Attendance of Wilkinson & Grist, for the petitioner, was excused (in HCCW 430/2020)

Attendance of the Official Receiver was excused (in HCCW 430/2020)