|
HCMP000081/1991
IN THE SUPREME COURT OF HONG KONG
HIGH COURT
MISCELLANEOUS PROCEEDINGS
----------------------
|
IN THE MATTER of THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
and
IN THE MATTER of the Companies Ordinance (Chapter 32)
|
-------------------
Coram: Hon. Jones J. in Court
Date of hearing: 26 March 1991
Date of delivery of judgment: 26 March 1991
-----------------------
J U D G M E N T
-----------------------
1. I have before me a petition that was presented on behalf of the Hongkong and Shanghai Banking Corporation Limited (the Bank) on the 4th March 1991 that seeks the sanction of the court to a scheme of arrangement dated the 1st February 1991 under s.166 of the Companies Ordinance. The principal object of the scheme is for the Bank to become a wholly owned subsidiary of HSBC Holdings plc. (Holdings), a public company that is registered in England and also in Hong Kong under Part XI of the ordinance. If the scheme is approved, the shareholders of the Bank will become shareholders of Holdings. The scheme is to be effected by a transfer of the issued shares of the Bank to Holdings or its nominees. It is intended that the shares will be listed on the Stock Exchange of Hong Kong, the International Stock Exchange of the United Kingdom and the Republic of Ireland Limited, whilst the present listings of the Bank on those exchanges will be withdrawn.
2. At the court meeting held by the Bank on the 26th February to consider the proposals, pursuant to the order that I made on the 21st January, the scheme of arrangement was approved by an overwhelming majority of 98.78% of the shareholders who voted in person or by proxy and by 99.65% in value.
3. My attention has been drawn today by Mr Sykes, counsel who appeared for the Bank, to the matter of the court's jurisdiction for this is the first scheme in Hong Kong relating to a transfer rather than through a reduction of capital. He cited in support of his submission In re Savoy Hotel Ltd. [1981] 1 Ch.351. From this authority I am satisfied that the scheme constitutes an arrangement in respect of which the court has jurisdiction, for the Bank is directly concerned with the scheme.
4. My attention was also drawn to the various conditions that are required to be complied with before the scheme can become operative, including the requirements of the Securities and Exchange Commission in the United States, the Hong Kong Stock Exchange and the London Stock Exchange. Apart from a meeting of the London stock Exchange, which I am told is fixed for tomorrow for an application for formal listing, all these conditions have been fulfilled.
5. Mr Sykes referred to In re Dorman, Long and Company, Limited [1934] 1 Ch.635 where it was held that in determining whether a compromise or arrangement should be sanctioned, the Court must be satisfied that the resolutions in favour of it are passed by the statutory majority in value and number and in accordance with the provisions of the Companies Act, and that the proposal is such as intelligent and honest members of the classes concerned, acting in respect of their own interests, would approve.
6. The scheme in this case is set out in a very comprehensive document that was sent to all the shareholders. The Board and two independent financial advisers, Schroders and Wolfensohn, have recommended approval of the scheme. The shareholders who cannot be traced are adequately protected under a trust deed, whilst appropriate undertakings have been given on behalf of Holdings and the National Westminster International Trust Corporation (Jersey) Limited, the trustee.
7. Having considered the submission made by Mr Sykes to whom I am most grateful for taking me through the papers and the relevant authorities so clearly, and after due consideration of the scheme, I am quite satisfied that it is in the interests of all the shareholders of the company for the court's sanction to be given. I shall therefore make an order in terms of the application and grant liberty to apply to the Bank in the event that it is necessary for further directions to be sought.
|
(B.L. Jones) |
|
Judge of the High Court |
Representation:
Mr Richard Sykes, Q.C. and Mr D.A.L. Wright (Norton Rose) for Applicant
|