Re Fan Shaozhou

HCB 528/2025

[2025] HKCFI 1521

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 528 OF 2025

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REASONS FOR JUDGMENT

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1.At the hearing of the petition presented by Zhongtai International Securities Ltd (“Petitioner”) on 20 January 2025 against Fan Shaozhou (“Debtor”), I made a usual bankruptcy order against the Debtor. These are the reasons for my judgment.

2.The following facts are not in dispute.

3.On 11 October 2021, the Debtor opened a securities margin account with the Petitioner.

4.On 23 December 2022, the Petitioner commenced legal proceedings against the Debtor in Shenzhen Qianhai Cooperation Zone People’s Court of Guangdong Province (“Qinhai Court”) in (2022) 粤0391 民初9614 claiming the amount due and payable to the Petitioner.

5.On 21 December 2023, the Qianhai Court entered judgment against the Debtor for HK$6,461,805.62 together with interest from 26 July 2022 and costs (“Judgment”).  The Debtor did not pay the amount due.

6.As at 5 January 2024, the amount due under the Judgment together with interest accrued thereon was HK$8,053,641.22.

7.On 3 January 2024, the Petitioner exercised its right to sell the 34,482,000 shares in a listed company (stock code 1802), which had been held by the Petitioner as security, and realized HK$3,655,944.04.  After deducting the amount realized from the sale, the amount due became HK$4,397,697.18.

8.As at 6 March 2024, the amount due and payable by the Debtor was HK$4,640,817.12 inclusive of interest (“Debt”).

9.By a statutory demand dated 6 March 2024, the Petitioner demanded the Debtor to pay the Debt (“SD”).  However, it was only until 16 October 2024 that the SD was served on the Debtor through the judicial authorities in the Mainland.  The Debtor did not comply with the SD.

10.By virtue of s.6A(1)(a) of the Bankruptcy Ordinance (Cap. 6), the Debtor is deemed unable to pay his debts.

11.The Debtor did not file any notice of intention to oppose the petition as required by rule 68 of the Bankruptcy Rules. Nor did he file any affirmation in opposition to the petition.

12.As the Debt is not in dispute, the Petitioner is entitled ex debito justitiae to seek a bankruptcy order against the Debtor.

13.Mr Jason Louie, counsel for the Debtor, did not lodge any skeleton with the court.  At the hearing, Mr Louie attempted to hand up a loan agreement said to have been signed that morning which, he said, would allow the Debtor to borrow HK$5.1 million for the purpose of repaying the Debt.  However, upon further enquiry, it transpired that the so-called loan would only be advanced in tranches over a period of 12 months.

14.Ms Kayan Wong, solicitor for the Petitioner, confirmed that the Petitioner did not accept the proposed repayment over a period of 12 months even if the entire loan would in fact be advanced to the Debtor. I do not see any basis to require the Petitioner to accept the proposed repayment offer when there is no certainty as to whether the Debtor will in fact receive the loan and the period of repayment is far so long.

Ms Kayan Wong, of Long An & Lam LLP, for the Petitioner

Mr Jason Louie, instructed by C & T Legal LLP, for the Debtor

Ms Lorvan Yiu, of Official Receiver’s Office, for the Official Receiver