RE AKM INDUSTRIAL CO LTD

HCMP 525/2022

[2022] HKCFI 2321

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 525 OF 2022

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D E C I S I O N

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1.  I have before me applications brought by the Company for sanction under section 673 of the Companies Ordinance, Cap 622 (“Ordinance”). The scheme of arrangement to privatise it and an associated confirmation of the reduction of the Company’s capital pursuant to section 229 of the Ordinance which is part of the mechanism used in order to effect the privatisation.

2.  On 22 June 2022 a meeting of shareholders was held in accordance with an order of the court made on 25 May 2022 which resulted in 99.88% of those shareholders’ present and voting in person or by proxy approving the scheme. At the same time the Company held an extraordinary general meeting and passed the necessary special resolution by a similar majority approving the reduction of capital.

3.  It is not necessary for me to discuss the application and its various components in detail. It will suffice to say that it is Hong Kong incorporated and listed on the Main Board of the Hong Kong Stock Exchange. The major shareholders of the Company have taken the view that it should be privatised and the proposed cancellation price of the scheme shareholders’ shares is fair and sufficiently attractive to obtain, as self-evidently it did, shareholder approval.

4.  The court applies well-established principles in considering applications to approve a scheme of arrangement for privatisation. It is well-established that the use of the scheme to achieve this result is a permissible purpose of the scheme of arrangement mechanism provided in the Ordinance. As this scheme involves the cancellation of all the ordinary shares of the Company and the payment to the class which is to dispose of its interest in the Company in exchange for the cash payment, it was clearly appropriate that there only be one class voting on the scheme.

5.  It seems to me that the explanatory statement was satisfactory, the order convening the scheme meeting has been complied with and that the privatisation is an arrangement which a reasonable shareholder could approve.

6.  I will, therefore, approve the scheme and confirm the reduction of capital. I will make an order in the terms of the draft that has been handed up to me.