Re Veda Strategists Co. Ltd

HCCW 1313/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO. 1313 OF 2001

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J U D G M E N T

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1. This is a petition to wind-up a company by the name of Veda Strategists Co Ltd. The Petitioner is the landlord of premises that had been rented out to the Company. In August last year, consent orders were made for mesne profits owed by the Company to the Petitioner. The mesne profits amounted to about $938,000.00.

2. On 17 August 2001, based on those consent orders made on 11 August 2001, a statutory demand was presented. The statutory demand was not satisfied and on 6 December 2001, the present Petition was presented.

3. The Petition has been opposed by the Company and affidavits have been filed on its behalf indicating that a company by the name of Topart was interested in acquiring the Company. In February 2002, it was said that Topart would be performing due diligence on the Company. It was further said that a report would be available within two weeks of 23 March 2002 for the purpose of assisting Topart in deciding whether to acquire this Company. It was said that a price of $2.5 million may be paid for the shares of this Company subject to further agreement as to terms and conditions.

4. On 11 February 2002, Deputy Judge Poon gave an adjournment to 25 March 2002, and on 25 March 2002 Deputy Judge Poon gave what he called a last adjournment to 8 April 2002.

5. Before me today, Miss Ip for the Company has asked for a further adjournment of two months. It has transpired that Topart has not completed its due diligence and no final date has been indicated for completion of due diligence. Further and more alarmingly, it would appear that there has been no agreement even in principle at this stage for matters such as the payment schedule for the shares of the Company, and it would also appear that Topart would only commit to this purchase should there be confirmation from customers that they would remain customers of the Company, and it is anticipated that such confirmation may well take one to two months.

6. No further materials have been put before the court as to the viability of this proposed acquisition. No financial statements have been put before the court and it is not clear what is the total extent of the Company's liabilities.

7. Given the fact that the Petitioner, who apparently is the only creditor of the Company, wishes to press for the Company to wind-up even at the risk of getting less by way of liquidation, and given that it is conceded that this Company has little in the way of assets, I see nothing that would enable me to exercise my discretion not to wind up the Company and I would make the usual winding up order.