Re Rbg Global Sa

HCCW 865/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 865 OF 2002

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Before: Hon Kwan J in Court

Date of Hearing: 9 May 2005

Date of Judgment: 9 May 2005

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J U D G M E N T

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1.This is a petition to wind up RBG Global S.A. (“the Company”) presented by RBG Resources PLC (in liquidation).  The Company was incorporated in the British Virgin Islands (“the BVI”) and had a place of business in Hong Kong.  It was believed that the Company had assets in Hong Kong in the form of deposits held in various bank accounts.

2.On 31 July 2002, the Eastern Caribbean Supreme Court, High Court of Justice, Virgin Islands (“the BVI Court”), made an order appointing provisional liquidators for the Company.

3.An order for the appointment of provisional liquidators was made by this court on 2 August 2002 for the Company and 13 other companies implicated in a worldwide fraud perpetrated by the senior management of the Petitioner.

4.The senior management of the Petitioner had created fictitious commodity trades to procure finance from third party financial institutions and the Company was used as a fictitious counterparty to the Petitioner and other companies to deceive financial institutions into advancing funding by exaggerating turnover and revenue.

5.In April 2004, summary judgment was given by the Chancery Division of the High Court in England in favour of the Petitioner against its former directors of US$307 million odd, for the massive losses suffered by the Petitioner as a result of such bogus trading.

6.The affairs of the Company in Hong Kong clearly require investigation.  The Petitioner has locus to petition for winding-up of the Company.  It is a creditor of the Company on the basis of these debts:

(1)	US$121,774.00 being the difference between sales to the Company by the Petitioner and purchases from the Company by the Petitioner; and/or
(2)	an unliquidated amount to compensate the Petitioner for losses resulting from the Company’s dishonest assistance in the fraud of the Petitioner and/or knowing receipt of funds paid in breach of trust.

7.The Petitioner seeks a winding-up order on the just and equitable ground, under section 327(3)(c) of the Companies Ordinance, Cap.32.

8.Winding-up proceedings were also brought against the Company by the Petitioner in the BVI in July 2002.  The Hong Kong petition and the BVI petition were opposed by the Company.  Mr Pradip Sancheti, who claims to be a director of the Company, has filed evidence in opposition.

9.To save time and costs and to avoid contesting parallel proceedings in two jurisdictions, the parties agreed to delay the Hong Kong proceedings and allow the proceedings in the BVI be heard and determined first.  This court has therefore adjourned the petition on a number of occasions in 2003 and 2004.  On the last occasion, the hearing was adjourned to a date to be fixed not before the handing down of the decision of the BVI petition.

10.In or about September 2004, the BVI Court made an order to wind up the Company and appointed liquidators.  The liquidators had convened meetings of creditors in November 2004.

11.In January 2005, the Petitioner’s solicitors wrote to the Company’s then solicitors asking whether the Company intended to continue to oppose the petition in Hong Kong.  Despite repeated requests, the Company’s solicitors failed to give a substantive response.

12.On 8 April 2005, the Petitioner proceeded to restore the hearing of the petition.  On 20 April 2005, the Petitioner’s solicitors received notice that the Company’s solicitors had ceased to act for the Company by an order of the court.   They wrote to Mr Sancheti on 21 April 2005 to give him notice of the restored hearing of the petition.  As of today, no response has been received.

13.I am satisfied that the Company has had adequate notice of the restored hearing.  There is evidence that the Company’s business had been carried on in a fraudulent manner notwithstanding the denial of involvement in Mr Sancheti’s affidavit, to which I attach no weight.  There is a clear and continuing need to investigate the affairs of the Company.  I therefore make an order to wind up the Company.  I also order that the individuals appointed as provisional liquidators of the Company do continue to act as such until further order of the court.

14.The Petitioner’s costs are to be taxed and paid out of the assets of the Company.

Mr Eugene Fung instructed by Messrs Lovells, for the Petitioner

The Company: RGB Global SA, absent

Miss Karen Cheung, for the Official Receiver