TSE’S FINANCE LTD v. MING LAM HOLDINGS LTD formerly known as SINO HAIJING HOLDINGS LTD

HCCW 109/2020

[2020] HKCFI 2321

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 109 OF 2020

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D E C I S I O N

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1.  I have before me a winding-up petition seeking the winding-up of the Company on the grounds of insolvency. The Petitioner served a statutory demand for in excess of HK$50,000,000 on the Company in December of last year. The Petition is supported by a number of supporting creditors and no creditors have appeared to oppose a winding-up order.

2.  The Company is incorporated in the Cayman Islands and listed on the Main Board of the Hong Kong Stock Exchange.  Despite the fact that the Petition was issued in May and it would appear the Company’s solicitors instructed in early August, prior to the hearing this morning no evidence had been filed by the Company disputing the Petitioner’s debt or suggesting any reason why the Company should not be wound-up immediately.

3.  Mr Cheung who appears before me this morning on behalf of the Company, had with him an affirmation which would appear to have been prepared right at the end of last week referring in general terms to a restructuring proposal.  The petitioner and the supporting creditors do not agree to an adjournment of the petition in order that the possibility of restructuring of the Company’s debt can be explored further.

4.  This would appear to be yet another example of a Mainland business listed in Hong Kong facing serious financial problems, not engaging properly with its creditors or the court in an attempt to stave-off a winding-up by advancing a proposal for rehabilitating its business and restructuring its debt.

5.  I have in recent authorities (see for example: SMI Holdings Group Limited [1]) drawn attention to the unsatisfactory way in which listed companies of this sort are responding to winding-up petitions.  A peculiar characteristic of the companies winding-up list in the last few months has been that a significant proportion of the companies coming before the court have been listed rather than domestic small and medium size enterprises.  It is troubling that the court is repeatedly encountering Hong Kong listed Mainland business groups, who seem to lack any sophistication when it comes to dealing with insolvency and their more general company law obligations.

6.  I have in SMI Holdings and other authorities explained the principles which guide the court when an adjournment of a winding-up petition is sought in order to allow a company the opportunity to restructure its debt.  It is not necessary to repeat them here.  They are manifestly not satisfied in the present case.  I will make the normal winding-up order.