RE YOUNGARY DEVELOPMENT LTD. (IN LIQUIDATION)

HCCW 184/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 184 OF 1999

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(Heard Together)

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D E C I S I O N

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1. I have an application taken out by the Official Receiver in each of five proceedings involving five companies in liquidation. They are all in the Tse Yu Hong group of companies.

2. The Official Receiver seeks an order under section 221 of the Companies Ordinance, Cap. 32 that Mr Tong Hing Sun and Mr Lau Kwok Wah Benjamin, who have been officers of one or more of these five companies, be examined in a private examination.

3. I have considered the Official Receiver's report. I am satisfied that both Mr Tong and Mr Lau are capable of giving material information to the Official Receiver on the affairs of the five companies in the Tse Yu Hong Group that have been wound up. It is clear that I have jurisdiction to make an order for private examination under section 221.

4. As to whether I should exercise my discretion in making the order, Mr Tong has made no submission in this regard. Mr Lau submitted that I should not make the order now and that it would be more appropriate to adjourn the application to April 2003 after the expected conclusion of a criminal trial in which he is one of the accused.

5. Mr Lau has confirmed to the court that the subject matter of his charge in that case being conspiracy to defraud is wholly unrelated to the affairs of the Tse Yu Hong Group. Even if his connection with the Tse Yu Hong Group were to be brought up in the course of that trial, as he has apprehended, I am not persuaded that this would be of material importance so that he would suffer significant prejudice if his private examination is to take place before his criminal trial. Besides, the examination sought by the Official Receiver under section 221 is to be conducted in private. The deposition taken in the examination will not be open to inspection by anyone else not involved in the examination without the leave of the court.

6. As for the other point raised by Mr Lau that the Public Security Bureau in the mainland is investigating into his affairs in relation to the Tse Yu Hong Group, it seems from what Mr Lau has told me that this investigation is only at a very preliminary stage and no proceedings of any kind in the mainland are on foot. Besides, any such investigation is wholly separate from the Official Receiver's investigation. I am not persuaded that that is a sufficient reason for adjourning the present application to April 2003.

7. For the above reasons, I make an order for examination against Mr Tong and Mr Lau in each of the five proceedings. I am told by the Official Receiver that it is not necessary to seek production of any documents from Mr Tong or Mr Lau at this stage.

8. I make the following orders:

(1) Mr Tong Hing Sun and Mr Lau Kwok Wah Benjamin be examined on oath before a Master of the High Court pursuant to section 221 as to the promotion, formation, trade dealings, affairs and properties of each of the following five companies: Tse Yu Hong Limited, Tse Yu Hong Textiles Limited, Tse Yu Hong Metal Limited, Tongz Trading Company Limited and Youngary Development Limited;

(2) leave to the Official Receiver to set down the examination for hearing with an estimated length of one day; and

(3) there be no order as to the costs of this application.