RE LI WANCHENG

HCMP 155/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 155 OF 2008

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D E C I S I O N

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1.  This is an application taken out by Li Wancheng, a shareholder and director of Ying Hai Limited (“the Company”), under section 114B of the Companies Ordinance, Cap. 32.

2.  The applicant seeks an order that a general meeting be called and that his attendance alone be deemed to constitute a sufficient quorum for the meeting. The background of this application may be stated as follows.

3.  The Company was incorporated on 3 September 1992 with two subscribers. Both were senior staff of a mainland company known as Guangdong Foshan Shiwan Overseas Economy and Trade Corporation (“the Corporation”).

4.  The Corporation intended to invest in Hong Kong and instructed its staff to form a limited company as an investment vehicle. The subscribers of the Company both made declarations of trust, declaring that they held their shares on trust for the Corporation. They were the only directors.

5.  Thereafter, the Company has bought and sold properties in Hong Kong and Macau. It now holds two properties in Hong Kong, both are free from encumbrances.

6.  In August 2002, the applicant and Zhou Sanmei were appointed as directors to replace the previous directors. Both were senior management staff in the Corporation. Similarly, they signed declarations of trust declaring that they held their shares in the Company on trust for the Corporation.

7.  Zhou Sanmei died intestate in Foshan in May 2006, leaving the applicant as the only remaining director. The applicant has made a thorough search in the papers of the Company and found the two declarations of trust that he and Zhou made, and the original share certificate in Zhou’s name regarding Zhou’s shares. However, he has not been able to find the original or a copy of any instrument of transfer or bought and sold note regarding Zhou’s shares and is not aware if Zhou had signed any such documents.

8.  The applicant has also made enquiries with the family members of Zhou and was given to understand that none of them would apply for letters of administration regarding Zhou’s shares in Hong Kong.

9.  Under the articles of association of the Company, it is provided that the number of directors shall be not less than two unless and until the Company in general meeting shall otherwise determine. Unless otherwise determined by the Company by ordinary resolution, the quorum of meeting of directors shall be two. Further, the quorum for transaction of business at a general meeting shall be two members. Owing to these provisions in the articles of association, it is impracticable for a general meeting to be called in the manner as prescribed.

10.  As there is only one director in the Company, the Company has encountered problems regarding the buying and selling of properties in that it has failed to meet the requirement of the minimum number of directors in the articles of association.

11.  I am satisfied that this is an appropriate case to exercise the power of the court under section 114B to order that a general meeting be called with the direction that the attendance of the applicant alone would be deemed to constitute a sufficient quorum, to enable the Company to appoint an additional director to facilitate the operation of its business.

12.  I make an order in terms as sought in the originating summons.