XCHRX RE YOUNG CRUISE CO. LTD.

HCCW 788/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO. 788 OF 2000

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D E C I S I O N

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1. On 11 December 2000, I made an order for the winding up of a company now known as Young Cruise Company Limited and formerly known as Fortune Oil Company Limited. This was despite the fact that an attempt had been made to wind up the Company voluntarily after the presentation of the Petition by a creditor, Lief Petroleum Pty Ltd.

2. Pursuant to that winding up order, a meeting of the creditors and a meeting of the contributories were held. According to the report made of those meetings by the Official Receiver, the liabilities of the Company were in the region of about US$54 million from proofs of debt which had been received and admitted for voting purposes.

3. There were originally three nominations for liquidators received from the creditors:

1) Mr Kennic Lui and Mrs Lauren Lau, both of Messrs Kennic L H Lui & Co.;

2) two gentlemen from HLB Hodgson Impey Cheng;

3) Mr John Robert Lees and Mr Desmond Chung, both of Ferrier Hodgson.

4. Subsequently the nomination of the two gentlemen from HLB Hodgson Impey Cheng was withdrawn. Therefore, the remaining two nominations were tabled for voting. It would appear that the resolution which was passed by a majority in value at the meeting was that Mr Lui and Mrs Lau be appointed as joint and several liquidators of the Company and that there should be a committee of inspection consisting of the following members:

1) Bank International Ningbo

2) the Petitioner

3) First Level Holdings Limited

4) Roman Spring International Limited

At that first meeting of the creditors, a total of nine creditors appeared. It would appear from subsequent evidence that of those nine creditors who appeared and voted, eight voted in favour of Mr Lui and Mrs Lau. The one creditor who did not so vote was Lief Petroleum which had nominated Mr Lees and Mr Chung.

5. After the report of the Official Receiver was presented to the court for the purposes of seeking the appointment of Mr Lui and Mrs Lau as liquidators, objections were received from the Petitioner on the ground that the creditors who had voted in favour of the appointment of Mr Lui and Mrs Lau were all related in one way or another with certain persons who had controlled the Company prior to its liquidation. I say no more about that matter because it has since transpired that some of the parties have arrived at a compromise. In the meantime, after the objections were received from the Petitioner, on 4 May 2001, I gave various directions as sought by the Official Receiver including that he should give notice of the Petitioner's opposition to the appointment of Mr Lui and Mrs Lau, and that any creditors or contributories wishing to be heard in respect of the Petitioner's application to appoint some other persons as liquidators should give notice of its intention to appear to the Official Receiver and to the Petitioner. Consequently, the present application was set down for hearing today.

6. As I have said, it would appear that it has since transpired that some of the parties have arrived at a compromise. The Petitioner together with three of the creditors, namely Roman Spring International Limited, Vitol S.A. and First Level Holdings Limited, have agreed upon the appointment as joint and several liquidators of Mr Matthew O'Driscoll and Mr Stephen Liu, both of Ernst & Young, and that there will be a committee of inspection in the winding up comprising not only the four members who had been resolved upon at the first meeting of creditors but also Fortune Oil Plc. I should add at this stage that as far as the contributories meeting was concerned, it had passed the same resolutions as at the first meeting of the creditors.

7. After this compromise as to the appointment of liquidators was arrived at between the Petitioner and three of the creditors, pursuant to the directions given in May 2001 all creditors and contributories have been notified of this compromise and all have been invited to give notice of any objections but none has been forthcoming. Today no other creditors than those represented by Richards Butler, namely Roman Spring, Vitol and First Level have appeared and none of the contributories has appeared; in particular I have noted that the company known as Sinochem, which had not appeared at the first meeting of creditors, has been notified but has chosen not to attend the hearing today. I have also noted that Mr Lee Ching, who is a contributory, has also chosen not to appear.

8. In the circumstances, bearing in mind this compromise between the parties which had previously been in dispute as to the appointment of liquidators and taking into account the fact that other creditors and contributories, although having been notified, have chosen not to attend the hearing today, I am prepared to make an order in terms of the draft order.