Re Merdeka Securities Ltd

HCMP 289/2024

[2024] HKCFI 817

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 289 OF 2024

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D E C I S I O N

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1.This is the Applicant’s application by ex parte Originating Summons issued on 20 February 2024 for an order under sections 56 and 62 of the Trustee Ordinance (Cap 29) to deal with certain unclaimed cash and securities (the “Unclaimed Assets”).

2.I have read the 2 affirmations of Chan Tat Fung filed on 20 February and 4 March 2024 in support of the application. Chan Tat Fung is a director of the applicant. I have also read the affirmation of Ching Ming Yu filed on 14 March 2024 giving the Court the latest update. Mr Ching is the solicitor for the Applicant.

3.The Applicant is a securities broker.

4.Some time on or before 1 April 2003, a company called K C Securities Limited obtained a Type-1 Licence from the Securities and Futures Commission (the “SFC”) to deal in securities.

5.K C Securities Limited has since changed name a number of times, and ultimately to that of the Applicant on 8 November 2019.

6.As explained by Mr Chan, potential clients of the Applicant would need to open a cash trading securities account with the Applicant before cash can be deposited in the same and securities traded. Settlement would take place on a T+2 basis.

7.On 31 March 2023, the Applicant decided to close down its business. Business was actually ceased on 31 July 2023. The SFC has been informed.

8.The Applicant has taken various steps to contact its clients. Those steps included a round of letters on 31 March 2023, follow-up telephone calls and emails on a frequent basis, and notices in both Chinese and English languages posted up in its website. Notices of the Applicant’s intention to make the present application have been given by newspaper advertisement and notices posted on the Applicant’s website. Notice of this application after issue has also been specifically given by letters to 15 clients who had by then not claimed back their assets, and to all clients by advertisement.

9.Despite all such efforts, there remain as of today 12 clients who have not claimed back their cash and/or securities.

10.The total amount of the monies still unclaimed is HK$36,078.89.

11.In respect of the unclaimed securities, some of them have been delisted. In so far as those shares that can still be realised, their total value is below HK$20,000.

12.As I have observed in Re Gold Fund Securities Co Ltd. [2020] HKCFI 2884, in general, what have to be established for an application of the present nature are (1) the assets in question are held by the applicant as trustee, and (2) despite reasonable endeavours, the beneficiaries cannot be contacted or are unresponsive, or the trustee is otherwise unable to obtain instructions as to how to deal with, dispose of or return the trust assets.

13.On the facts before me, I am satisfied that the Applicant have established both requirements.

14.I make an order in terms of the draft order that has been placed before me as updated. I am satisfied that its contents accurately reflect the position as has been updated by Mr Ching. In gist:

(a)  I declare that the Unclaimed Assets are held by the Applicant as trustee for each of the related clients;

(b)  Amongst the Unclaimed Assets:

(i)  the unclaimed cash be paid into court;

(ii)  in respect of those securities the physical certificates of which can be withdrawn, they be deposited with court;

(iii)  in respect of those securities the physical certificates of which cannot be withdrawn, they be forfeited or be sold, or otherwise be disposed of by the Applicant in its sole discretion, and any related proceeds be paid into court;

(c)  Notice be given pursuant to Order 92 rule 4 by way of advertisement and letters;

(d)  Upon compliance of the above, the Applicant be discharged from any obligations or claims in respect of the Unclaimed Assets;

(e)  Liberty to apply; and

(f)  There be no order as to costs.

Mr Ching Ming Yu of Ching & Co, for the Plaintiff