Re Asia Television Holdings Ltd

HCCW 573/2025

[2026] HKCFI 3098

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO. 573 OF 2025

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J U D G M E N T

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1.In her petition, the Petitioner seeks to wind up Asia Television Holdings Limited (“Company”)  on the ground of insolvency. 

A.  THE FACTUAL BACKGROUND

2.The facts that gave rise to the presentation of the petition are as follows.

3.The Company was incorporated under the laws of the Cayman Islands on 26 January 2005, and was registered in Hong Kong under Part XI of Cap 32 as an oversea company on 7 June 2005.  

4.The Company’s shares were and still are listed on the Main Board of the Stock Exchange of Hong Kong Limited (“HKSE”).  Trading in the shares of the Company on the HKSE has been suspended since 11 August 2025.

5.According to the documents produced by the Petitioner:

(1)  On 29 November 2018, Asia Honest Finance Limited (“Asia Honest”)  entered into a written loan agreement with the Company for HK$4 million (“Loan”).  The sum was remitted from Asia Honest’s bank account to the Company’s bank account on the same day. 

(2)  On 22 June 2025, an agreement was executed between Asia Honest, the Company and the Petitioner for Asia Honest to assign the HK$4 million loan to the Petitioner, in consideration for the Petitioner to pay HK$300,000 to Asia Honest (“Assignment”).

(3)  On 25 July 2025, the Petitioner transferred HK$300,000 to Asia Honest’s bank account.

(4)  On 3 August 2025, a written acknowledgement of debt (“Acknowledgement of Debt”)  was entered into between the Company (executed by Ms Tang Po Yi on its behalf)  and the Petitioner, in which the Company acknowledged and confirmed, amongst other things, that (a)  it was indebted to the Petitioner a sum of HK$4,210,000 together with interest, and (b)  a partial payment of HK$30,000 was made to the Petitioner by the Company.

6.On 19 August 2025, the Petitioner served on the Company a statutory demand requiring payment of the principal sum and interest accrued thereon due to the Petitioner in the total amount of HK$7,410,186.30 (“Debt”).  However, no payment was made by the Company.  On 11 September 2025, the Petitioner presented the petition herein to seek to wind up the Company on the ground that it is unable to pay its debts.

7.By a notice of intention to appear dated 2 October 2025, Glowing Bonus Limited claimed that it is a creditor of the Company in the sum of HK$88,033,213 (as of September 2025)  and indicated its intention to support the petition.

B.  THE COMPANY’S CASE

8.The Company disputes that it is liable to repay any debt to the Petitioner.  In particular, the Company contends that:

(1)  the Loan would have already been time-barred when the Assignment was made on 22 June 2025;

(2)  there were disputes between the majority of the board of directors (“Impugned Directors”)  and the largest shareholder of the Company (Oriental Textile Products Limited (“Oriental Textile”)), which resulted in the removal of the Impugned Directors with effect from 12 August 2025; and

(3)  one of the Impugned Directors, Mr Lu, was also a director of Asia Honest, and had dug out the Loan, which was terminated, in an attempt to salvage the position.

9.Accordingly, the Company submits that the Assignment and the Acknowledgement of Debt are shams, and are liable to be set aside.

C.  WHETHER THERE IS A BONA FIDE DISPUTE ON SUBSTANTIAL GROUNDS

10.When determining whether there is a bona fide dispute on substantial grounds, I bear in mind the following principles set out in Kwan J’s decision in Re Hong Kong Construction (Works)  Limited (unreported, HCCW 670/2002, 7 January 2003)  at [6].

“(1)  The burden is on the company to establish that there is a genuine dispute of the debt on substantial grounds.  In this context, “substantial” means having substance and not frivolous.  An honest belief in an insubstantial ground of defence is not sufficient to avoid a winding-up order.

(2)  The court should look at the company’s evidence against so much of the background and evidence that is not disputed or not capable of being disputed in good faith; in other words, the evidence is not to be approached with a wholly uncritical eye.

(3)  The court would caution itself against unsubstantiated and unparticularised assertions, especially where particulars and information have been sought by the other side.  It is incumbent on the company to put forward “sufficiently precise factual evidence” to substantiate its allegations.

(4)  The court does not try the dispute on affidavit but is to determine whether a substantial dispute exists.  In so doing, the court necessarily has to take a view on the evidence, to see if the company is merely “raising a cloud of objections on affidavits” or whether there really is substance in the dispute raised by the company.  Even where the company has obtained unconditional leave to defend in an application for summary judgment, the Companies Court is not precluded from examining the evidence and taking a view on whether the debt is disputed on substantial grounds.”

11.As mentioned earlier, the Petitioner has produced documents to demonstrate the making of the Loan, the Assignment and the Acknowledgement of Debt.  In my view, these documents are sufficient to form the evidential basis of the Petitioner’s statutory demand which was served on the Company.  I disagree with the Company’s submission that the Petitioner is required to prove other matters, such as the existence and the outstanding nature of the indebtedness owing by the Company to Asia Honest, or the “veracity” of the Assignment and the Acknowledgement of Debt.  This submission reverses the burden that it is for the Company to identify matters with substance that give rise to a bona fide dispute on substantial grounds.

12.Given that the Company’s contention is that the Assignment and Acknowledgement of Debt are shams and should be set aside, it is necessary to examine whether the Company has satisfactorily discharged its burden to demonstrate a bona fide dispute on substantial grounds in relation to such a contention.

13.The classic definition of sham is Diplock LJ’s formulation in Snook v London and West Riding Investments Ltd [1967] 2 QB 786.  A sham exists where (1)  the parties intended that the documents or acts they have done would not create the legal rights or obligations they appear to create and (2)  it was intended that the documents or acts would mislead a third party into believing the parties had created those rights and obligations.  At p 802C-F, Diplock LJ said:

“As regards the contention of the plaintiff that the transactions between himself, Auto Finance and the defendants were a “sham”, it is, I think, necessary to consider what, if any, legal concept is involved in the use of this popular and pejorative word. I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the “sham” which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any)  which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities ... that for acts or documents to be a “sham”, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating. No unexpressed intentions of a “shammer” affect the rights of a party whom he decided.”

14.To support its case of sham, the Company submits that (1) neither the Company, Asia Finance nor the Petitioner contemplated the acquisition by the Petitioner of an indebtedness owing by the Company, (2) the Impugned Directors were in fact hunting for monies at the Company’s expense and at the same time seeking measures to prevent robust investigation by the new Company board on past activities so as to prolong the time of unveiling ex-management’s wrongdoing, and (3)  the Petitioner knowingly assisted or just simply went along not caring whether what she entered into truly had the effect as the documents appeared to create.[1]

15.Remarkably, the Company has provided no evidential basis whatsoever to support these submissions.  The Company has filed two affirmations to oppose the petition.  However, neither affirmation contains any facts or cogent evidence which support any of the submissions.  The Company’s elaborate submissions to support a case of sham are therefore nothing but bare assertions, which are plainly insufficient to raise a bona fide dispute on substantial grounds.

16.Further, the Company has made lengthy submissions to contend that the “sham” is “underlied by the inexplicable peculiarities” concerning the Debt, namely (1)  there is no logic for the Company to revive a time-barred debt, (2)  there is no logic for the Petitioner to acquire a time-barred debt, (3)  the evidence goes against the presence of an outstanding debt in June 2025, (4)  there is inconsistency between the Petitioner’s pleaded case and her evidence and (5)  the Petitioner has ignored the Company’s request for inspection of supporting documents.[2]  The Company also submits that the Petitioner has not provided any answer to any of these “anomalies”. 

17.In other words, in opposing this petition, the approach taken by the Company is to point to the various so-called “peculiarities” or “anomalies”, which it says are unexplained by the Petitioner.  In my view, this approach is tantamount to reversing the burden of the Company to establish a bona fide dispute of substance over the debt in question, and is therefore incorrect.  The onus is not on the Petitioner to establish the genuineness of the Assignment or the Acknowledgement of Debt. 

18.In any event, the so-called “peculiarities” or “anomalies” are not in my view sufficient to establish a prima facie case of sham.

(1)  In order to establish the Assignment or the Acknowledgement of Debt is a sham, the Company must adduce evidence to show that the Petitioner and the Company intended that the document in question (a) would not create the legal rights or obligations it appears to create, and (b) would mislead a third party into believing the parties had created those rights and obligations. 

(2)  The Company has failed to adduce any evidence to support such intentions. 

(3)  Indeed, the objective evidence suggests otherwise.  The Petitioner has produced a bank transfer slip to show that she transferred HK$300,000 to Asia Honest on 25 July 2025 as consideration for Asia Honest’s assignment of the Loan to her.  This payment has not been challenged by the Company.  Such a payment is contrary to the Company’s assertion that the Petitioner did not intend the Assignment to create the legal rights or obligations it appears to create.

(4)  Further, on 3 August 2025, the Company made a partial repayment of the assigned loan in the sum of HK$30,000 to the Petitioner.  No evidence has been adduced by the Company to suggest that this did not happen.  Such partial repayment again negatives any suggestion that the Petitioner and the Company did not intend the Assignment or the Acknowledgement of Debt to have full legal effect according to its terms.

19.As Neuberger J said in National Westminster Bank plc v Jones [2001] 1 BCLC 98 at [59], “there is a very strong presumption indeed that parties intend to be bound by the provisions of agreements into which they enter, and, even more, intend the agreements they enter into to take effect.”  Other than “raising a cloud of objections on affidavits”, the Company has adduced no evidence to support the case that either the Petitioner or the Company (through its former management)  did not intend the Assignment or the Acknowledgement of Debt to take effect.  The Company’s absence of evidence to support its case of sham cannot be overcome by its counsel making extensive arguments based on “logic”.

20.I should also mention that I disagree with the Company’s suggestion that there is any inconsistency between the contents of the Petition and the Petitioner’s evidence.  The alleged inconsistency is that the Acknowledgement of Debt provides for interest to be charged but that was not fully reflected in the petition.  However, it is clear from the petition that the calculation of interest was not mentioned.  In any event, even if there is any such discrepancy, I fail to see how that can constitute evidence to support that the Assignment or the Acknowledgement of Debt is a sham.

21.Similarly, the fact that the Petitioner did not expressly say in the petition that the Company was a party to the Assignment is neither here nor there.  That omission is immaterial and again cannot constitute a basis to say that the Assignment or the Acknowledge of Debt is a sham.

22.The Company also seeks to attack the credibility of the Petitioner.  It submits that the Petitioner says in her 2^nd affirmation (at paragraph 18)  that she wishes to “recover the money that is legitimately owed to [her]”, but later on (at paragraphs 28 and 29)  says that the Company’s liquidation will leave her “with virtually nothing”.  It is clear from the context of the various paragraphs that the Petitioner was referring to different things: she was seeking to respond to the Company’s allegations of collusion and improper motive in the earlier part, and to respond to the unsatisfactory nature of the Company’s debt-restructuring plans in the latter part.  I do not believe this example can be used to undermine the Petitioner’s credibility, or to support the Company’s assertion that all the Petitioner wants is to force out the existing management of the Company.

23.For the sake of completeness, I should record that the Company has also made some suggestion that the Loan Agreement (between Asia Honest and the Company)  was bogus.[3] Again, no evidence has been adduced by the Company to support this suggestion.  Indeed, the Company’s audit confirmation for Asia Honest’s auditors dated 15 February 2019 suggests that the Loan between Asia Honest and the Company was genuine.  Further, any suggestion that the Loan was time-barred in 2025 would be negatived by the Assignment or the Acknowledgement of Debt to which the Company signed as one of the parties, as well as the partial repayment of HK$30,000 made by the Company on 3 August 2025.

24.Although some references were made in the affirmations filed on behalf of the Company about the “debt-restructuring plans”, the Company made no reference to it in its skeleton arguments.  It therefore does not appear that the Company’s opposition of the petition is based on any proposed restructuring.  In any event, it is well-established that to oppose a petition on the ground that there is reasonable prospect to restructure the debts, the company “has to demonstrate to the court that a concrete restructuring or a scheme of arrangement has been prepared and put forward to the creditors for their considerations, and such proposal or scheme has the support of the requisite majorities of creditors.  It is not enough for the company to point to certain commercial discussions with some creditors or make a general assertion that it has been actively pursuing a restructuring proposal”.  Further, the court would only adjourn a winding-up petition if it is satisfied that there is funding for the proposed restructuring, there is a restructuring plan and the plan has a timetable.  See Re Dafa Properties Group Ltd [2024] HKCFI 3034 at [10]-[11] (Linda Chan J).  I note that it does not appear from the Company’s evidence that the purported “debt-restructuring plans” have been put forward to all the creditors or have received the support from the majority of the creditors.  I therefore say no more about such plans.

25.For all these reasons, I find that the Company has failed to demonstrate that its case of sham is genuine, serious and of substance.  It has no adduced any cogent evidence to show that there is a bona fide dispute of the Debt on substantial grounds.

D.  DISPOSITION

26.The Company has not taken any point to dispute that the 3 threshold requirements are met for the court to exercise its discretion to wind up the Company (a foreign-incorporated company). 

(1)  The Company has sufficient connection with Hong Kong: (a) its shares are listed on the HKSE, (b)  it has been registered as a non-Hong Kong company since 2025, (c)  it has its principal place of business in Hong Kong, and (d)  four of the nine directors, and the authorised representatives, of the Company are Hong Kong residents with Hong Kong Identity Cards.

(2)  There is a reasonable possibility that a winding-up order against the Company would benefit the creditors including the Petitioner and the supporting creditor. The commercial pressure on the Company to satisfy the debts created by the prospect of a winding-up is a legitimate form of benefit: Shangdong Chenming Paper Holdings Ltd v Arjowiggins HKK 2 Limited (2022)  25 HKCFAR 98 at [57], [81]-[82] (Fok and Lam PJJ). 

(3)  Given that several of the Company’s directors and the Company’s authorised representatives are Hong Kong residents, the Court can exercise its in personam jurisdiction over such individuals in the distribution of the Company’s assets.

27.The Company has failed to pay the Debt pursuant to the statutory demand, and is deemed to be unable to pay its debts under s.327(4)(a)  of the Companies (Winding Up and Miscellaneous Provisions)  Ordinance (Cap 32).  Further, as I found earlier, the Company has failed to show that there is any bona fide dispute of the Debt on substantial grounds.

28.Accordingly, I make an order to wind up the Company.  I will now hear the parties on costs.

[Submissions on costs]

29.I make an order that the Petitioner’s costs and the costs of the supporting creditor be taxed and paid out of the Company’s assets. 

Ms Cyndi TY Ho, instructed by M.C.A. Lai Solicitors LLP, for the Petitioner

Mr Mike Yeung, instructed by Ling & Lawyers, for the Company

Mr Alexander Cheung, instructed by Tso Au Yim & Yeung, for the Supporting Creditor

The Official Receiver, attendance excused