Re Nep Holdings (Malaysia) Berhad (in Liquidation in Malaysia)

HCMP 2541/2025

[2026] HKCFI 1863

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2541 OF 2025

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D E C I S I O N

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1.By Ex-Parte Originating Summons dated 22 December 2025 (“OS”) Datuk Ooi Woon Chee and Wong Ching Yong, the joint and several liquidators (“Liquidators”) of NEP Holdings (Malaysia) Berhad (in liquidation in Malaysia) (“Company”), seek an order recognising their appointment with powers to assist them in performing their functions as liquidators in Hong Kong.

Background

2.The Company was incorporated in Malaysia on 16 February 1995.[1]  Mr Lim Chang Huat (“LCH”) holds 80% of the issued shares of the Company. Before its demise, the Company engaged in the business of assembling, wholesaling, distributing and trading in water filtration systems and health care related products and investment holdings.[2]

3.The Company has a wholly owned subsidiary, NEP International (HK) Limited (“NEP HK”), which is a Hong Kong company. NEP HK has 10,000 issued shares all of which are registered in the name of the Company.[3]

4.On 25 July 2023, a shareholder of the Company[4] commenced proceedings[5] in the High Court of Malaya at Kuala Lumpur (“Malaysian Court”) under s.346 of the Companies Act 2016 seeking to wind up the Company on the ground that its affairs had been conducted in an oppressive and unfairly prejudicial manner. On 15 January 2025, the Malaysian Court made a winding-up order against the Company and appointed the Liquidators (“Winding-up Order”).[6]

5.On 28 January 2025, the Malaysian Court dismissed an application for stay pending appeals against the Winding-up Order. Under Malaysian law, the Winding-up Order remains effective.[7]

6.The Liquidators considered that NEP HK is a substantial asset of the Company. According to the annual return made up to 12 June 2024, being the latest annual return filed by NEP HK at the Companies Registry (“CR”), the directors were LCH and Mr Lim Chee Kon (“LCK”). On 6 March 2025, LCK filed a Form ND4 stating that he had resigned as director on 24 February 2025. From 3 February 2025 to September 2025, the Liquidators repeatedly demanded LCH and the former director to hand over the records and assets of the Company but to no avail. LCK claimed that he had not been involved in the day-to-day management of the Company while LCH refused to provide any assistance to the Liquidators.[8]

7.The Liquidators were able to obtain a copy of the audited financial statements of NEP HK for the year ended 30 June 2020 (signed by LCH and LCK) which showed that it had net assets of HK$21.16 million. To preserve the value of NEP HK, on 1 July 2025, the Liquidators caused the Company (qua sole shareholder of NEP HK) to pass written resolutions to appoint 2 new directors namely, Vongs Corporate Services Limited and Red Incorporations Limited (“New Directors”). On 22 July 2025, the Liquidators caused a ND2A to be filed at the CR notifying the public of the change in directors. After the appointment, the New Directors continued to request LCH to provide information and documents in respect of NEP HK but none has been provided.[9]

8.By letters dated 24 November 2025, the CR referred to a complaint which alleged that the ND2A filed on 22 July 2025 was “unauthorised, invalid and misleading”. The CR noted the Winding-Up Order, LCH was the sole director of NEP HK (before the appointment of the New Directors) and holds 80% shareholding in the Company, and enquired inter alia, (1) whether the appointment of New Directors was duly approved, and required production of the resolutions approving the appointment; (2) whether “approval from Court of Malaysia and/or Hong Kong is required for exercising the shareholder’s right of the Company in NEP HK by the Liquidators”.

9.The Liquidators believed that “some wrongdoers” attempted to hinder and undermine their work in preserving and taking control of NEP HK. They considered that in order to “streamline and formalize the course of works of the Liquidators in Hong Kong and to deal with the imminent query raised by the CR or other possible challenges faced by the Liquidators in Hong Kong”, it is necessary to seek the Hong Kong court’s recognition and assistance as per the terms of the OS.[10]

Procedural background

10.The OS was scheduled to be heard on 26 February 2026. By letter dated 30 December 2025, the Liquidators’ solicitors asked this Court to deal with the application “on paper” on the basis that the application was straight-forward.

11.However, the application was not made in accordance with the principles expounded in the recent judgments on recognition, and the application was not supported by a letter of request. By letter dated 5 January 2026, this Court directed the application to be heard as scheduled, and the Liquidators should (1) specify with particularity the assets and documents which they intend to take control, and (2) obtain a letter of request issued by the Malaysian Court in support of the application.

12.The Liquidators adduced the legal opinion dated 5 February 2026 of Mr Justin Ong, an advocate and solicitor of the High Court of Malaya since 2010 (“1^st Opinion”), who opined that:

“7. Under the current Malaysian legal framework, there is no statutory mechanism or provision that allows or empowers a party to firstly, make an application to the Malaysian Courts for the issuance of such a letter of request and for the purpose of assisting a foreign Court. On that note, there are also similarly no statutory provisions which allow the Malaysian Courts to grant or issue such a letter of request.

8. The current cross-border legislation in Malaysia under the Reciprocal Enforcement of Judgments Act 1958 is only limited to and/or only deals with cross-border enforcement of monetary judgments and is therefore inapplicable to request made by the HK Courts.

9. In general, the Malaysian Courts adopt the doctrine of functus officio. In short, once the Courts have pronounced a final order or judgment, it is devoid of jurisdiction to re-open, alter, amend, or supplement that order or judgment. This would in practice extend to the issuance of further letter(s) which has the effect or reinforcing or extending the effect of the original order or judgment granted by the Malaysian Courts.

10. For completeness, and based on our experience in dealing with the Malaysian Courts, the Malaysian Courts will not issue such a letter of request which may be deemed to be “supportive” of a litigant’s rights, and may draw the Court to controversy. Therefore, the final and definitive document that the Malaysian Courts are prepared to issue would simply be the written form of the order or judgement [sic] pronounced by the Court.”

13.Without a letter of request, it would be incumbent upon the Liquidators to identify and explain the source of their powers and to demonstrate, by reference to each specific power they ask the Hong Kong court to grant by way of assistance, that it is a power they have under Malaysian law. This has not been shown by the evidence or the skeleton lodged by the Liquidators in support of the application.

14.By another letter dated 25 February 2026, this Court reminded the Liquidators that, in the absence of any letter of request, they should identify the source of each power they ask the Hong Kong court to grant by way of assistance in the form of a table similar to the one in Re Trinity International Brands Limited [2023] HKCFI 1581.

15.Despite the aforesaid reminder, at the hearing on 26 February 2026, Mr Jackson Chow, counsel for the Liquidators, was not able to provide the analysis or the additional materials required from the Liquidators. More importantly, it seems to this Court that it would not be prudent to rely on the 1^st Opinion given that: 

(1)  Mr Ong only considered whether the Malaysian Court has power under the statute to grant a letter of request, but the power of the court to issue a letter of request does not necessarily have to derive from statute;

(2)  The power of the domestic court to recognise and assist foreign liquidation/liquidators derives from common law. Malaysian Court, being a common law jurisdiction, should have similar power to recognise and assist foreign liquidation/liquidators or to request a foreign court to recognise and assist office-holders appointed by it based on the principle of modified universalism;

(3)  Mr Ong assumed that a letter of request issued by the Malaysian Court is to assist the Hong Kong court. However, on true analysis, a letter of request issued by the Malaysian Court, if issued, would be a request made to the Hong Kong court requiring our court to recognise and assist the Liquidators appointed by the Malaysian Court;

(4)  The view that the Malaysian Court has become functus upon making the Winding-Up Order and thenceforth cannot make any further order in respect of the winding up of the Company seems to have conflated the jurisdiction of the Malaysian Court to make any further order in respect of the lis between the parties (which has already been concluded), and the Malaysian Court’s jurisdiction to supervise the liquidation of the Company and give directions to the Liquidators on issues and questions arising in the course of the liquidation of the Company (which only commences upon the Winding-Up Order), which is an entirely separate matter; and

(5)  The Liquidators had not in fact made an application to the Malaysian Court for issuing a letter of request, and it was by no means clear that the Malaysian Court would take the same view as Mr Ong.   

16.In view of the aforesaid deficiencies, this Court adjourned the application with liberty to the Liquidators to file further materials in support of their application. Following the adjournment, the Liquidators filed an affirmation of Ho Lok Cheong on 2 March 2026 exhibiting a further opinion of Mr Ong dated 27 February 2026 (“2^nd Opinion”).

17.It appears from the 2^nd Opinion that Mr Ong was not asked to address the queries raised by this Court on the 1^st Opinion. Instead, Mr Ong was only instructed to review and opine on the proposed powers sought in the OS and to identify the provisions under the Malaysian Companies Act 2016 in respect of those powers.

18.After Re USUM Investment Group Limited [2026] HKCFI 1320 was handed down[11], on 6 March 2026, the Liquidators lodged a revised skeleton and a revised draft order following the principles expounded in Re USUM.

Discussion

19.The source of the court’s power to recognise and assist foreign liquidation and liquidators appointed by the foreign court derives from common law. As explained in Re USUM §§53-54:

(1)  Recognition and assistance are conceptually distinct.

(2)  Recognition of the fact of a foreign office-holder’s appointment and his powers over the company’s affairs is a matter of ordinary private international law principle. Provided the relevant criteria are satisfied in relation to the office-holder’s appointment, his ability to act as such within Hong Kong is not dependent on his first obtaining an order from the Hong Kong court. The order for recognition is only confirmatory in nature for the benefit of third parties in Hong Kong with whom the office-holder may have to deal.

(3)  On the other hand, assistance refers to the grant of specific power by the domestic court in furtherance of the office-holder’s functions.

20.The criteria for recognition and assistance have been summarised in Re USUM at §59(1)-(2) as follows:

“(1) The court may recognize the appointment of a foreign insolvency office-holder where:

(a) The foreign proceedings are collective insolvency proceedings;

(b) The foreign proceedings are conducted in the jurisdiction of the company’s place of incorporation or where its [centre of main interest] is located; and

(c) Recognition is not barred on grounds of public policy, fraud or breach of natural justice, or the enforcement of foreign penal or revenue laws.

(2) The court may grant assistance to a foreign insolvency office-holder where:

(a) The appointment of the foreign insolvency office-holder is recognised under Hong Kong law;

(b) The power which the office-holder invites the court to exercise or confer is of a nature which the court has recognised at common law or which is proper for the court to exercise having regard to the proper exercise of the judicial function;

(c) The order sought is one which can be made under the law by which they were appointed;

(d) The assistance is necessary for the administration of the foreign winding-up or the performance of the office-holder’s functions; and

(e) The order sought is consistent with the substantive law and policy of the Hong Kong court.” 

21.Each of the requirement for recognition (§1 of the OS/draft Order) is satisfied.

22.First, the liquidation of the Company is a collective proceeding and the Winding-up Order has the effect of placing the Company into compulsory liquidation under the supervision of the Malaysian Court, and the Liquidators were appointed to administer the Company’s affairs and assets in accordance with Malaysian law.[12]

23.Second, the liquidation of the Company has been commenced and conducted in Malaysia, which is the place of incorporation of the Company. By virtue of their appointment under the Winding-up Order and the applicable Malaysian law (discussed below), the Liquidators are the only persons with authority to act in the name and on behalf of the Company.[13]

24.Third, there is no public policy concern which may bar the court from granting an order recognising the appointment of the Liquidators. Although the Winding-Up Order is under appeal, it remains effective as no stay has been granted.[14]

25.The requirements for assistance under §§2-3 of the OS/draft Order are also met.

26.Although there is no letter of request issued by the Malaysian Court confirming the status and powers of the Liquidators, in the 2^nd Opinion, Mr Ong identified the source of each power the Liquidators  pursue by reference to the specific provisions under the Companies Act 2016, which show that the Liquidators do have such power without any further order made by the Malaysian Court. The table setting out the specific powers sought in the application and the sources of the powers under the relevant statutory provisions is reproduced in Schedule A hereto.

27.As regards §3 of the OS/draft Order, the Liquidators seek an order for stay of all action or proceedings proceeded with or commenced against the Company or its affairs, property or assets within the jurisdiction save with leave of the court. It has not been demonstrated by the Liquidators that the court does have power under common law to grant a stay of all proceedings against the Company in such term. The assistance which the court has granted by way of assistance is to direct all applications for stay of proceedings to be made to the Companies Judge so that the application, if may, can considered at an inter partes application in the usual way.

28.The assistance sought in §2 is necessary to assist the Liquidators in performing their functions in Hong Kong for the reasons explained below.

29.First, the CR has raised query on whether the Liquidators’ appointment required recognition or approval by the Malaysian Court and/or the Hong Kong court before they can exercise the Company’s right qua sole shareholder of NEP HK.

(1)  This Court does not consider the query raised by the CR was right or justified as it ignored the fact that the Liquidators are office-holders appointed by the court of the place of incorporation of the Company (Malaysian Court), such that they are the only persons having proper authority to act in the name of the Company. It was unnecessary for the Liquidators to seek recognition of their appointment before they acted on behalf of the Company and exercised its right qua shareholder of NEP HK and passed the written resolutions to appoint the New Directors.

(2)  That said, in view of the CR’s query, the assistance, if granted, will assist the Liquidators in dealing with the CR and avoid the need for the Liquidators to bring further proceedings for the purpose of addressing the CR’s query or any further  complaint which may be made to the CR regarding the validity of the appointment of the New Directors.

30.Once the Liquidators are able to take control over NEP HK, they will be able to obtain the records and assets of NEP HK from LCH, LCK and any other persons whom they believe have possession, power or control over such records and assets.

31.Second, LCH and the former director have not been cooperative and have failed or refused to provide any corporate and financial records relating to the Company and NEP HK to the Liquidators. The assistance granted will facilitate and “give teeth” to the Liquidators’ request for information and records relating to the Company and NEP HK from the directors and other third parties as any refusal on their part in providing the Liquidators with the information and documents may be met by an application to compel them to do so.

32.Third, given the hostile stance adopted by LCH and the complaint which has been made to the CR, there is a real likelihood that similar complaints may be made to other third parties in Hong Kong who have possession of information and documents relating to the Company and NEP HK. The assistance granted will obviate the need for the Liquidators to incur time and costs to prove their authority to act for the Company and NEP HK whenever a complaint has been made to those third parties.

33.The assistance granted is consistent with the substantive law and policy of the Hong Kong court.

34.For the reasons set out above, it is appropriate to grant recognition and assistance in the following terms:

(1)  The liquidation of the Company and the appointment of the Liquidators pursuant to the Winding-up Order be recognised by this Court;

(2)  The Liquidators have and may exercise in Hong Kong the following powers: -

(a)  The Liquidators be at liberty to take into their custody or under their control all the property to which the Company is or appears to be entitled including but not limited to 10,000 ordinary shares in NEP HK (Business Registration Number 63457373), being all its issued shares;

(b)  The Liquidators may bring or defend any action or other legal proceedings in the name and on behalf of the Company;

(c)  The Liquidators may compromise any debt due to the Company other than calls and liabilities for calls and a debt where the amount claimed by the Company to be due to the Company does not exceed HK$20,000 (approximate ten thousand ringgit in Malaysian currency);

(d)  The Liquidators may sell the immovable and movable property and things in action of the Company by public auction, public tender or private contract with power to transfer the whole immovable and movable property and things to any person or company or to sell the same in parcels;

(e)  The Liquidators may do all acts and execute in the name and on behalf of the Company all deeds, receipts and other documents and when necessary, use the Company’s seal;

(f)  The Liquidators may do all such other things as are necessary for winding up the affairs of the Company and distributing its assets;

(3)  If the Liquidators wish to apply for a stay in respect of any proceedings commenced against the Company or NEP HK or otherwise as a consequence of the recognition of their appointment by this Order, such application shall be listed before the Companies Judge;

(4)  The Liquidators do have liberty to apply; and

(5)  There be no order as to costs.

Mr Jackson Chow, instructed by Franki Ho & Associates, for the Liquidators

Schedule A