RE GOLD-FACE HOLDINGS LTD

HCCW 970/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 970 OF 2004

____________

____________

_______________

J U D G M E N T

_______________

1.  I have before me a petition to wind up Gold-Face Holdings Limited (“the Company”).  The petition was presented by China Overseas Building Construction Limited on 3 September 2004.  It was amended on 7 October 2004.

2.  The Company was incorporated in Bermuda.  It was registered under Part XI of the Companies Ordinance, Cap. 32 with a principal place of business in Hong Kong.  The shares of the Company have been listed on the Stock Exchange of Hong Kong Limited.

3.  The petition was presented on the basis of the judgment debts of HK$50,644,791.00 in High Court Action No. 2011 of 2003 dated 9 June 2004 and of HK$21,402,800.00 in High Court Action No. 2008 of 2003 also dated 9 June 2004.  The petitioner served a demand on the Company of the judgment debts on 4 August 2004.

4.  Since the petition first came before the court on 11 October 2004, it has been adjourned many, many times.  The reason for this is due to a restructuring proposal put forward by the Company.  On 19 April 2005, the court ordered in HCMP No. 3190 of 2004 a meeting of creditors to be held to consider the proposed scheme of arrangement.  I understand that to date, the court meeting has not been convened, because the Company proposes to focus its efforts on its resumption of trading proposal being accepted by the Stock Exchange and would not incur further costs to progress with the proposed scheme.

5.  Trading in the Company’s shares was suspended since 19 May 2003.  A restructuring agreement was entered into by the Company with an investor Mighty Miracle Technology Limited on 23 February 2005.  The completion of the restructuring agreement is conditional upon the Listing Committee of the Stock Exchange granting approval for the listing of and permission to deal in the new shares to which the investor is to subscribe.  This means that the Company would need to obtain approval from the Stock Exchange of its proposal for resumption of trading of its shares for there to be a viable restructuring of its debts.

6.  On 4 February 2005, the Listing Division of the Stock Exchange considered the application for resumption of trading in its shares by the Company and came to the decision that the proposal was not viable.  The financial advisers of the Company invoked on its behalf the procedure seeking a review of this decision.  A review hearing was held, and on 9 May 2005, the Listing Committee decided to uphold the decision of the Listing Division that the resumption proposal did not amount to a viable proposal and decided to cancel the listing of the Company’s shares.  The Listing Committee took the view that the Company had not provided sufficient materials to demonstrate that it would be in a position to comply with the Listing Rules which required a listed issuer to carry out a sufficient level of operations, or have tangible assets of sufficient value, or intangible assets for which a sufficient potential value could be demonstrated.

7.  On 11 May 2005, the Company decided to take the review procedure further by referring the decision of the Listing Committee to the Listing (Review) Committee.  A hearing was conducted by the Listing (Review) Committee on 22 July 2005.

8.  In August 2005, the Company was notified that the Listing (Review) Committee upheld the decision of the Listing Committee to cancel the listing of the Company’s shares.  The Company then lodged a request for review to Listing Appeals Committee.  The hearing was postponed due to a number of reasons.  The Company changed its financial advisers and put forward a new resumption proposal, it sought an extension of time from the Listing Appeals Committee to lodge submissions.  Further, the auditors of the Company had resigned in March 2006, and the consolidated financial statements of the Company could not be prepared in time for the hearing.  Lastly, due to changes made to the composition of the Listing Appeals Committee, the hearing was not held until 17 August 2006.

9.  During all this time, when the resumption proposal was first considered by the Stock Exchange in February 2005 until August 2006, the winding-up petition was repeatedly adjourned to await the outcome of the Company’s application on its proposal for resumption of trading of its shares.  The Listing Appeals Committee gave its decision on 4 September 2006, and decided to uphold the decision that the listing of the Company’s shares be cancelled.

10.  The Company now seeks a further adjournment of the winding-up petition for it to seek leave to apply for judicial review, to quash the various decisions of the Listing Division, the Listing Committee, the Listing (Review) Committee and the Listing Appeals Committee.

11.  I understand the notice of application for leave to apply for judicial review has not yet been issued, but counsel for the Company informed the court that it could and would be issued shortly.  The grounds for seeking judicial review are procedural impropriety, illegality and unreasonableness. I have considered in draft an 8^th affirmation which the Company proposes to file in support of its application for an adjournment.

12.  I am not minded to grant a further adjournment of this petition.  The Company has essentially exhausted all the avenues for review regarding its application to the Stock Exchange for resumption of trading of its shares.  This petition has been adjourned many times and for a very long period, for the Company to exhaust all the avenues for review and appeal within the Stock Exchange.

13.  At the moment, there is no viable proposal for restructuring, as the resumption proposal has not been approved.  On 19 September 2006, the Stock Exchange has announced the cancellation of the listing of the shares of the Company, with effect from 20 September 2006.

14.  Counsel for the petitioner informed the court that in the event an adjournment of the petition is refused, the petitioner will seek a winding-up order today.  I therefore make an order to wind up the Company.  The petitioner’s costs are to be paid out of the Company’s estate.  The petitioner is to have its costs reserved on all previous occasions.