Chinovation Leasing Ltd v. Zhu Linshan and Others

HCA 985/2021

[2023] HKCFI 2544

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 985 OF 2021

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BETWEEN

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D E C I S I O N

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1.By its summons dated 19 January 2023 as amended on 6 March 2023 (“the Summons”), Chinovation Leasing Limited (“the Plaintiff”) seeks interlocutory injunctive relief against (a) the 3^rd defendant Interstellar Group Inc (“Interstellar”); (b) the 4^th defendant Leanne Caravaggio (“LC”); and (c) the 5^th defendant Sands Secretaries Limited (“Sands”), enjoining D3 and D4 from dealing with the assets of the 6^th defendant Chinovation Entertainment Investment Limited (“CEIL”), and D5 from holding out as company secretary of CEIL. At the conclusion hearing, judgment was reserved which I now give.

Background facts

2.The Plaintiff commenced this action on 25 June 2021 (“the Action”) which concerns the ownership of CEIL.

3.The background is somewhat complex involving multiple entities[1] and individuals. To facilitate an understanding of the key entities involved, a bare bones chart (adopting the nomenclature used in this Decision) of the corporate structure (prior to 16 June 2020) of the entities involved in the present application is attached as an appendix.

4.The Plaintiff is a subsidiary within the Huaxi Group (“the Group”) and is wholly and directly owned by Huasheng PRC[2]. It was previously a subsidiary of the Royal Bank of Scotland (“RBS”) but was acquired by the Group in November 2016 to build up its financial leasing business.

5.Prior to 16 June 2020, the Plaintiff held the entire issued shareholding of CEIL, the vehicle used to hold the Group’s minority stake in the PRC company known as Huawen which was acquired in April 2017. The acquisition was made on the basis that it would create additional synergies in the Group’s financial leasing business[3].

6.The Plaintiff also held Chinovation Financial Service Limited (“CFSL”) which in turn held Huaxin Financial Leasing.

7.In April 2015 the 2^nd defendant Wang Yong (“Wang”) was engaged to run the Group’s leasing business and form his own team. As such, he was able to cause the appointment of directors of subsidiaries following his identification of candidates.

8.Under the Compensation Scheme signed in 2015 governing Wang’s employment, shares in Huaxin Financial Leasing would be transferred to Wang upon meeting certain performance indicators. According to the Plaintiff, Wang ultimately requested for shares in Huasheng PRC instead. The shares transferred pursuant to such scheme were shares in Huasheng PRC[4].

9.Sometime after March 2017, 10% of Huasheng PRC was transferred to a limited partnership known as “Qiheng[5]” which was held as to 25% by Huasheng HK and 75% by another limited partnership known as “Qihua” with the result that Qihua[6] would indirectly hold 7.5% of Huasheng PRC.

10.Interstellar, LC and CEIL are jointly represented in this Action and are also referred to as “D3/4/6” in this Decision.

11.Interstellar is a BVI company whose sole registered shareholder[7] is Wang’s mother, Madam Cao Meihua (“Cao”). Cao is said to be a nominee for Madam Sun Qiuyan[8] (“Sun”). Interstellar was incorporated on 29 May 2020[9]. Its sole director is LC who, like Wang, attended York University and overlapped with him there.

12.A few months earlier, in or about February 2020, Sun had acquired 99% of Qihua and Huarui which meant that she had a 7.5% stake in Huasheng PRC.

13.Zhu Linshan (“Zhu”), Wang’s niece, joined the Group in March 2016 when she was 21 as a junior administrative staff in Huasheng PRC’s internal audit department. On 13 May 2020, she was appointed director of the Plaintiff, CEIL and CFSL.

14.According to D3/4/6, Sun learnt from Zhu that the then senior management of the Group wished to increase its shareholding and control of Huasheng PRC to almost 100% so that it could be used to finance and/or inject funds into the Group without any real objection from any minority shareholders[10] given that the Group had liquidity or cash flow problems. Sun became interested in acquiring an indirect stake in Huawen and selling her stake in Huasheng PRC which she held through Qiheng.

15.Between 1 June 2020 to 16 July 2020, a series of transactions took place that, in essence, resulted in

(a) the transfer of CEIL from the Plaintiff to Interstellar (“the Transfer”)[11] for $18.75 million payable by way of an interest-free promissory note due 30 December 2020 in respect of which there is a written resolution signed by Zhu, the Plaintiff’s sole director, dated 16 June 2020; and

(b) the Group acquiring (via the Plaintiff and CFSL) a further 69% of Qiheng resulting in the Group (via its control 94% of Qiheng and 100% of Huasheng HK) having control of a 99.4% interest in Huasheng PRC.

16.The transfer documents were executed by Zhu, the sole director of the Plaintiff, on 16 June 2020. On the same day, there were written resolutions appointing LC and Sands respectively as director and company secretary of the Plaintiff and accepting the resignations of Zhu and Linkup Secretary Limited (“Linkup”).

17.Various company filings in respect of CEIL’s changes of director, company secretary and registered office were made on 17 June 2020[12].

18.The Action[13] seeks, inter alia, to set aside the Transfer.

19.Following the Transfer, Wang and Zhu left the Group in July and August 2020 respectively.

20.In or about August 2020, the original senior management within the Group was replaced and Shen Bin (“Shen”) became a director of the Plaintiff.

21.Shen did not discover the changes in shareholder and director of CEIL until early September 2020.

22.The Plaintiff, on erroneous advice, caused two Form ND2As (giving notice of the appointments of Shen as a director of CEIL and Linkup as company secretary) and a Notice of Change of Registered Office (collectively the “Notices”) all effective 4 September 2020 to be submitted to the Companies Registry (“CR”) on 9-10 September 2020, to rectify the corresponding records made on 17 June 2020.

23.That caused Interstellar and CEIL to issue an originating summons (HCMP 1619/2020) against Shen, Linkup and the Registrar of Companies on 30 September 2020 seeking declarations that the Notices are null and void.

24.On 30 June 2021, 2 days prior to the scheduled hearing date, a consent order was made granting the relief Interstellar and CEIL sought in HCMP 1619.

25.Meanwhile, the Plaintiff commenced this action on 25 June 2021. At the same time, it liaised with the CR who agreed to insert a caveat[14] against the documents relating to the Transfer and to withhold registration of any further documents from Sands.

26.During the period when HCMP 1619 was pending[15], the CR did not act.

27.On 10 November 2021, the Plaintiff replied to the CR’s letters requesting comment on the intended registration of CEIL’s 2021 Annual Return (“the 2021 AR”). As a result, the CR withheld registration pending the litigation (i.e. HCA 985).

28.On 23 December 2021, in correspondence with the CR, the Plaintiff stated its intention to apply for injunctive relief and requested that it be given 3 days’ prior notice before the CR effected registration of CEIL’s ARs.

29.Further correspondence ensued between the Plaintiff and the CR between late December 2021 through 23 February 2022. Nothing further was heard until 14 December 2022 when the CR stated that it was considering registering CEIL’s 2021 and 2022 ARs.

30.On 19 January 2023, the Plaintiff issued the present Summons for interim injunctive relief.

31.Following a call over hearing on 3 February 2023, the Plaintiff confirmed its withdrawal of the challenge in respect of documents filed in the CR and to discontinue its action against the CR[16] on 20 February 2023.

32.The CR registered CEIL’s 2021 and 2022 ARs on 28 February 2023.

33.Shortly thereafter,

(i) in April 2023, Interstellar requested the variation of shareholder and director information for CEIL’s bank account with the Shanghai Pudong Development Bank but was unsuccessful because it was unable to comply with the relevant “connected company” policy[17] of the bank;

(ii) on 17 April 2023, LC (claiming to be CEIL’s director) sought various information/documents from Huawen.

34.It is relevant to note that an attempt had been made in November 2021 to discuss a change in CEIL’s appointed director to the board of Huawen[18] and in November 2021, Jiangsu Wenhua, the 61% shareholder in Huawen, received a call from someone claiming to be CEIL’s authorised representative requesting information relating to CEIL[19].

Legal principles

35.The applicable principles are well established. It is uncontroversial that (a) while the burden is on the plaintiff to show that there is a “serious issue to be tried” and that it has prospects of success, the hurdle is not high; (b) the plaintiff must also show that if it succeeds at trial would not be adequately compensated by damages for any loss caused by the refusal to grant the injunction; (c) balance of convenience considerations come into play where there is doubt as to the adequacy of the remedies in damages; (d) the court should take whichever course seemed likely to cause the least irremediable prejudice to one party or the other; (e) a party seeking interlocutory injunctive relief must do so promptly and without delay.

36.On the issue of delay, unexplained delay can be fatal to any application for an interlocutory injunction because it can reflect the lack of irreparable damage, cause prejudice to the person who will be affected by the injunction, render it unreasonable or unjust to grant an interlocutory injunction, and in a bad case of unexplained delay, can constitute an abuse of process: see Zhang Yan Yin v Korchina Culture Investment Limited [2018] HKCFI 2764 at §23 per Mimmie Chan J, summarising the principles stated in the judgment of Anthony Chan J in Dorshare Limited| v Shun Pong Limited, HCA 1823/2012, unrep., 4 January 2013 at §§12-16.

37.Nevertheless, in Liao Chen Toh v Loyal International Enterprises Co Ltd & Ors [2021] HKCFI 164 at §35, DHCJ Douglas Lam SC adopted the principle set out in Monsanto Co v Stauffer Chemical Co [1984] FSR 559 at 571:

“… it is not sufficient for a defendant to show that the applicant has delayed unreasonably. It must be shown that because of that delay, it would be unreasonable to grant the remedy; that it has become practically unjust to do so. As Megarry J said in Legg v Inner London Education Authority [1972] 1 WLR 1245:

‘What seems to me important is not so much the length of the delay per se, but whether the delay has in some ways made it unjust to grant the injunction claimed.’ (pp 1259-1260)”

I. The Plaintiff’s case against D3/4/6

A. Serious issue to be tried

(1) Disposal of CEIL at an undervalue

38.Mr Shieh SC and Ms Natalie So, counsel for the Plaintiff, submitted that there is a serious issue to be tried concerning the validity of the Transfer. At a minimum, there would appear to be a breach of fiduciary duty on the part of Zhu for making the Transfer at an undervalue.

39.Zhu who is Wang’s niece had no senior management experience when she was appointed sole director of the Plaintiff, CEIL and CFSL. Hardly a month after her appointment, on 11 June 2020, Zhu caused the Plaintiff (the sole registered and beneficial owner of the only issued share of CEIL) to enter into a sale and purchase agreement with Interstellar for the sale of that issued share in CEIL in return for an interest-free promissory note for $18.75 million due 30 December 2021 (“the SPA”).

40.In the annexure to this Decision, CEIL is shown as having a 27.28% interest in Huawen. In fact, because the Plaintiff failed to make a capital contribution in September 2021, its shareholding had dropped to 15.9%.

41.The NAVs of Huawen for the financial years ended 31 December 2019 and 2020 are respectively in excess of $500 million and $600 million. At a minimum, applying the lower NAV, a 15% stake would still mean a value of the order of $75 million.

42.There is no evidence of the reason for that Transfer[20] or of any valuation of the Plaintiff’s interest in CEIL at the relevant time. Where, as in the present case, the sale at an undervalue is not explicable as mere carelessness, other questions arise.

43.Mr Shieh submitted that there is a serious issue to be tried as to whether Wang was the mastermind behind the series of transactions in 2020 which could be part of a larger scheme, with Sun being a nominee for Wang. If so, it would give rise to proprietary consequences, allowing the Plaintiff to seek relief to set aside the Transfer.

44.The matters referred to in §§11-14 above support the view that Wang appears to be the ‘centre of gravity’ of the Transfer. He is the sole common connecting factor between Zhu, Cao, Sun and LC.

45.There is no evidence from Sun. Nothing is known of Sun’s background, how Cao came to be her nominee and how LC came to be appointed sole director of Interstellar.

46.Coincidentally, Sun’s acquisition of Qihua’s and Huarui’s entire issued shareholding and Interstellar’s incorporation took place shortly prior to the SPA and after Zhu’s appointment as sole director of the Plaintiff, CEIL and CFSL.

47.Ostensibly, Sun became interested in swapping her indirect stake in Huasheng PRC for an indirect stake in Huawen following information conveyed to her by Zhu[21].

48.According to the pleaded Defence, the Group had cash flow problems: it was unable to inject the full amount required when Huawen resolved to increase its share capital and an intercompany debt was owing to CFSL. However, the statement of truth in the Defence was made by LC alone and there is no evidence from Sun herself.

49.Also, there is no evidence as to how Sun and Zhu came to know each other. Nor is there any information as to how the purchase price was determined.

50.Moreover, even if the cash flow problem existed and was the reason for the swap, there is still no explanation as to why the sale of CEIL to Interstellar should be at an undervalue.

51.Mr Victor Dawes SC, Ms Connie Lee and Ms Terri Ha, counsel for D3/4/6, accepted that few cases are resolved on the basis of no serious issue to be tried and the threshold is not high.

52.I am more than satisfied that there is a serious issue to be tried on the question whether the disposal of CEIL to Interstellar was at an undervalue.

(2) Proper interpretation of CEIL’s Articles of Association

53.A central issue that arises is whether CEIL’s board resolutions dated 16 June 2020 (“the CEIL board resolutions”) made by Zhu as sole director of CEIL appointing LC as sole director and Sands as company secretary are valid.

54.The relevant Articles of CEIL provide as follows:

“9. Unless and until otherwise determined by an ordinary resolution of the Company, the minimum number of director (s) shall be one and there shall be no maximum number of directors.

…

20. In the event that the quorum and minimum number of directors are fixed at two or more directors, the continuing directors may act notwithstanding any vacancy in their body, but if and so long as the number of directors is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of directors , the continuing directors may act for the purpose of increasing the number of directors to that number, or of summoning a general meeting of the Company, but for no other purpose. If there shall be no directors able or willing to act, then any two members may summon a general meeting for the purpose of appointing directors.

…

22. (b) Unless otherwise determined by the Company by Ordinary Resolution, the quorum for meeting of the directors shall be two. Notwithstanding any provision herein, if the Company has only one director, the decision of that director shall be taken by way of written resolution (s).”

55.It is the Plaintiff’s case that Article 22 (b) stipulates that the necessary quorum for meeting of the directors is two. While a sole director may act when a vacancy occurs, the continuing director’s power to act is limited to the purposes specified in Article 20, namely for increasing the number of directors or summoning a general meeting. As the appointment of LC as sole director and of Sands as company secretary were not within the limited purposes, the appointments are invalid.

56.Mr Dawes disagreed with the Plaintiff’s interpretation of the relevant Articles. D3/4/6 rely on Article 9 and the first two sentences of Article 20 which applies where “the quorum and minimum number of directors are fixed at two or more”. While Article 22 (b) specifies the quorum to be two, the minimum number of directors is one. Hence Article 20 is not applicable and the appointments are valid.

57.This dispute over the proper construction of the relevant Articles clearly raises a serious question to be tried.

B. Balance of convenience

58.The Plaintiff highlighted the fact that there is no information about LC’s and Interstellar’s financial status. Although no actual attempt has been made by Interstellar to call for the payment of dividends by Huawen, the matters referred to in §§33-34 above are consistent with preparatory groundwork for such an attempt.

59.In the absence of injunctive relief, should the Plaintiff succeed in the action, LC and Interstellar’s financial ability to pay damages is unknown and the Plaintiff may well end up with an empty judgment.

60.D3/4/6 for their part sought to cast doubt on the Group’s, and thus the Plaintiff’s ability to pay damages should it fail in this action. They queried its financial health, given that despite its ‘capitulation’ in HCMP 1619 in June 2021 and its consequent obligation to pay D3/4/6 their costs, it has failed to do so[22].

61.Mr Dawes also relied on judgments debts obtained by 3^rd parties against Huaxi Enterprise Limited (a member of the Group) described in LC’s affirmation dated 31 March 2023 at §41 that are said to be ‘unmet’[23].

62.But the fact that various judgments have been entered against a member of the Group cannot be taken as proof of the Group’s inability to pay. While the relevant exhibits appear to show that steps have been taken to enforce the judgments, there being entries of “Full Progress” entered against “Current Progress” of first enforcement in each case. There is no evidence of enforcement being unsuccessful or of further steps taken to enforce those judgments.

63.For those reasons, I accept the Plaintiff’s submission that the mere entry of judgment is not to be equated with financial difficulty. Accordingly, it has not been shown that the Plaintiff’s undertaking in damages is not credible or that D3/4/6 could not be adequately compensated should they prevail at trial.

64.Subject to the matters considered below, the balance of convenience appears to lie in the Plaintiff’s favour.

C. Delay

65.The Summons was issued on 19 January 2023. As earlier noted, the Plaintiff first became aware of the changes in CEIL’s ownership and control in early September 2020, almost 2 ½ years earlier.

66.The events that occurred after the Plaintiff’s discovery of the changes are summarized in §§22-32 above.

67.As noted in §22 above, the Plaintiff caused the Notices to be submitted to the CR in September 2020. That has attracted much criticism from Mr Dawes which I propose to deal with under the “clean hands” heading.

68.For present purposes, it suffices to highlight the following relating to the filing of CEIL’s ARs:

(a) during the currency of HCMP 1619, from September 2020 to 30 June 2021 when the consent order was made granting D3 and D4 the relief they sought, the CR did not act;

(b) between 29 October 2021 and 23 February 2022, correspondence passed between the CR and the Plaintiff relating to the Plaintiff’s objections to the filing of CEIL’s 2021 AR;

(c) of note during that period is that on 23 December 2021 the Plaintiff expressed an intention to apply for an injunction to restrain such a filing and requested the CR to give it 3 days’ prior notice of registration;

(d) after a 10-month hiatus in the correspondence, on 14 December 2022, the CR informed the Plaintiff that it was reconsidering the registration of CEIL’s 2021 and 2022 ARs and enquired whether the Plaintiff will seek or have sought interim relief;

(e) on 13 January 2023, the Plaintiff confirmed that it was seeking interim relief; and

(f) the present Summons was taken out on 19 January 2023.

69.Mr Dawes was critical of the inordinate delay particularly when the Plaintiff recognised the need to seek injunctive relief back in December 2021. Yet, it did nothing until January 2023.

70.It is clear from Shen 3^rd that the Plaintiff expended a great deal of time fact-gathering because of the change in senior management. But its investigations were seriously hampered, inter alia, by the fact that despite painstaking efforts Wang and Zhu could not be located, and by the pandemic restrictions.

71.While the Plaintiff realised that there was a need to maintain the status quo pre-dating the Transfer, fortuitously, up until 23 February 2023, it was effectively maintained through administrative means. The CR’s approach had in fact resulted in a state of affairs whereby neither Interstellar nor LC was able to hold themselves out as, respectively, shareholder and director of CEIL.

72.It is of course well established that it is for a plaintiff who seeks an injunction to show that it has acted promptly and without delay: see King Fung Vacuum Limited v Toto Toys Limited [2006] 2 HKLRD 785 (CA) at §20[24]. Even so, it cannot mean that the yardstick indicated in that case is to be applied without regard to the circumstances of the particular case.

73.Mr Shieh did not shy away from the fact that delay may undermine any sense of urgency or need for interim relief and it may give rise to some kind of prejudice if in the meantime the defendants have acted on the basis that it would be unrestrained and have taken prejudicial steps. Nevertheless, he submitted that delay should not be viewed as some kind of a stand-alone reason for refusing an injunction, divorced from the underlying rationale.

74.He fairly acknowledged that there has been a time gap. However, it was submitted that the time gap does not necessarily undermine the need for the court’s intervention provided that need is sustainable on the facts.

75.While the delay in the present case is lengthy, it is not a case where the Plaintiff has sat idly by. It may be criticised for making inefficient/wrong decisions in its investigations and/or proceeding on misguided assumptions. But at the end of the day, the court has to assess whether or not the Plaintiff has demonstrated a need for relief and is likely to suffer irreparable harm without the intervention of the court at this stage.

76.The inescapable inference from the incidents set out in §§33-34 above and filing of CEIL’s ARs is that, without an injunction, there is a real likelihood of the assets of CEIL (being its interest in Huawen) being dissipated. Those incidents are inexplicable as random happenings.

D. Clean hands

77.Mr Dawes labelled the “Notices” the Plaintiff caused to be presented to the CR for filing as “False Notices”.

78.The Notices relating to the appointments of Shen as a director of CEIL and Linkup as company secretary were “false” in that in each case the box indicating the reason for cessation as “resignation” was checked when that had not been the case. The Plaintiff has acknowledged that the Notices did not comply with Hong Kong law and were inappropriate.

79.However, the submission is not only that the Notices were false but that they were “done with a view to wrongfully seize control and/or ownership of CEIL i.e. an end-goal which is closely connected to the equitable remedy sought[25]” in the Action and the Summons. In other words, the Plaintiff had a nefarious intent when it caused the Notices to be filed which was to “wrongfully” seize control of CEIL.

80.This submission has to be viewed in context, against the backdrop of the Plaintiff’s case. Its complaint is that CEIL was disposed of at an undervalue, in effect, stolen from it. On the Plaintiff’s case, the purpose of the Action is to recover what was wrongfully taken from the Plaintiff. The transaction subject to the Plaintiff’s claim is the disposal of CEIL at an undervalue. The Plaintiff’s misguided resort to measures of self-help was wrong and its conduct deserves strong deprecation, but that cannot affect or take away the Plaintiff’s right to recover property which on its case belongs to it.

81.Shen was criticised for “trying to short-circuit the necessary legitimate legal process by seeking to blame it on the advice of the managing consulting firm i.e. Fanzuo[26]”. That would not appear to be a correct reading of the evidence of Shen who sought to explain how and why the Notices came into existence.

82.Fanzuo was not some random Shanghai consultant. It was the PRC partner firm of Linkup, the Hong Kong company secretary for the Plaintiff, CEIL and CFSL since prior to 2020 and responsible for facilitating communications between those entities and Linkup and providing instructions to Linkup[27]. Upon becoming aware there were unauthorised changes to CEIL’s director and shareholder, the Plaintiff asked Fanzuo if it could locate the details which it did.

83.The Group having always operated in China was not familiar with the operation, management requirements, control and running of Hong Kong entities[28]. CEIL’s interest in Huawen was an extremely valuable asset[29] of the Group. In those circumstances, that the Plaintiff should then enquire of Fanzuo how the June documents should be handled and acting on that advice, while unwise, is understandable.

84.I accept the Plaintiff’s submission that the Plaintiff’s attempt at self-help is completely separate from the Transfer which had previously taken place, giving rise to its claim.

Conclusion

85.In summary, I am more than satisfied that there are serious issues to be tried and that the balance of convenience lies in favour of the Plaintiff. I do not accept that the Plaintiff is disentitled to equitable relief because of ‘unclean hands’.

86.I have given considerable thought to the issue of delay. It is clear that the Plaintiff has demonstrated that there is a real need for injunctive relief and I have little doubt that without the court’s intervention, the Plaintiff is likely to suffer irreparable harm.

87.I take into account the fact that while any injunction granted is likely to be in place for some time, CEIL is an investment holding company and is not engaged in active trading. The injunction sought is intended to restrain the shareholder and the director in personam from implementing transactions that could affect CEIL.

88.I have also considered whether the delay in the present case “has in some ways made it unjust to grant the injunction claimed”: per Megarry J in the Legg case (cited in §37 above and applied in the Liao Chen Toh case). There is nothing that I can discern from the evidence filed on behalf of D3/4/6 that would make it unjust to grant the injunction claimed.

89.Taking all these considerations into account, I am of the view that the relief sought against D3/4/6 should be granted.

II. Sands

90.Mr Thomas Fyfe representing Sands admitted that Sands is not a necessary party to these proceedings and it is neither necessary nor appropriate for the Plaintiff to seek injunctive relief against it.

91.Sands was appointed as company secretary after the Transfer had already taken place and maintained a neutral position.

92.Despite multiple attempts at seeking Plaintiff’s consent to withdraw from further participation in these proceedings such consent has not been forthcoming.

A. Serious issue to be tried

93.Sands submitted that there is no serious issue to be tried vis-a-vis Sands and the Plaintiff. While no allegations have been pleaded by the Plaintiff against Sands, it is clear from the discussion relating to the proper interpretation of CEIL’s Articles at §§53-57 above that the validity of Sands appointment as company secretary is a serious issue tried.

B. Necessity and balance of convenience

94.Given that the validity of Sands’ appointment is in issue, it is a necessary party so that it can be bound by the ruling when the issue is resolved at trial.

C. Conclusion

95.For the reasons stated, injunctive relief should be granted against Sands.

Leave summons

96.D3/4/6 filed a summons on 31 August 2023 (“the Leave Summons”) for leave to rely on the 2^nd affirmation of LC (“D4 2^nd”) exhibiting, inter alia, CEIL’s Articles of Association exhibited to the 3^rd affirmation of Lui Kit Yin dated 31 August 2023.

97.As the court has referred to an extract from CEIL’s Articles, there is to be an order in terms of the Leave Summons.

Order

98.There is to be an order in terms of the draft order submitted which contains a proviso allowing Interstellar, LC and Sands to procure or arrange for the filing or submitting of any Annual Return(s) of CEIL at the Companies Registry.

Costs

99.Costs should follow event. I therefore make an order nisi that the costs of the Summons be to the Plaintiff with certificate for 2 counsel, to be taxed if not agreed.

Mr Paul Shieh SC and Ms Natalie So, instructed by Han Kun Law Offices LLP, for the plaintiff

Mr Victor Dawes SC, Ms Connie Lee and Ms. Terri Ha, instructed by Michael Li & Co, for the 3^rd, 4^th and 6^th Defendants

Mr Fyfe Thomas Alexander, of Simmons & Simmons, for the 5^th Defendant