RE WANG WEITAO

HCB 8432/2025

[2026] HKCFI 2813

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 8432 OF 2025

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J U D G M E N T

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1.  By petition presented on 4 November 2025 (“Bankruptcy Petition”), the Petitioner seeks a bankruptcy order against the Debtor based on an unsatisfied statutory demand served upon him on 1 September 2025.

2.  The petitioning debt in the amount of HK$160,200,257.01 is founded on the Debtor’s liability as guarantor of the liabilities of Elion International Investment Limited (“Company”) to the Petitioner under a short-term loan facility (“Short Term Loan”) and a margin loan (“Margin Loan”) advanced to the Company. The Debtor is the sole director of the Company.

3.  The Company’s liabilities to the Petitioner formed the subject matter of a winding-up petition presented by the Petitioner against the Company in HCCW 648/2025. By Judgment dated 21 January 2026 ([2026] HKCFI 465) (“WU Judgment”), Linda Chan J wound up the Company on insolvency ground.

4.  The background facts set out below are extracted from the WU Judgment and the Bankruptcy Petition.

5.  In respect of the Short Term Loan:

(1)  Pursuant to a short-term loan facility agreement dated 19 December 2019 (as amended by a supplemental agreement dated 21 August 2020 and further amended by a 2^nd supplemental agreement dated 10 September 2021), the Petitioner (as lender) advanced to the Company (as borrower) a term loan facility in the amount of HK$35,408,750. The Debtor executed a guarantee on 19 December 2019 in favour of the Petitioner to secure the liabilities owing by the Company to the Petitioner.

(2)  The Company failed to make repayment when the loan fell due on 18 June 2022.

6.  In relation to the Margin Loan:

(1)  On 22 September 2017, the Company opened and maintained a margin account with Quam Securities Limited (“Quam Securities”).

(2)  In November 2017, Quam Securities entered into a margin loan agreement with the Company whereupon it granted a margin facility of HK$140,000,000 to the Company for 2 years. The Company agreed to charge its 428,767,000 shares in China Oceanwide Holdings Limited (stock code: 715) (“China Oceanwide” and “428m Shares”) as security for the Margin Loan (“Share Charge”). At or around the same time, the Debtor executed a guarantee in favour of Quam Securities to secure the liabilities owing by the Company to Quam Securities.

(3)  In February 2020, the Margin Loan was extended for another year subject to the condition that the Company shall repay the outstanding amount under a margin call by 30 June 2020. The Company failed to meet the margin call.

(4)  On 18 November 2020, the Company made a partial repayment of HK$43,749,805 and requested Quam Securities to extend the grace period for forced liquidation of the collateral until the end of 2020. On 26 May 2021, the Company made a further partial repayment in the sum of HK$11,884,805.

(5)  On 16 June 2021, Quam Securities and the Company signed a letter of conditional extension of credit limit up to HK$70,000,000 under the margin account, extending the final maturity date to 31 December 2021 (together with the earlier agreements in respect of the Margin Loan, “Margin Loan Agreements”).

(6)  The Company failed to pay the agreed instalments and failed to repay the Margin Loan by the maturity date.

7.  On 31 August 2022, Quam Securities served a statutory demand on the Company requiring it to pay the outstanding amount under the Margin Loan.

8.  On 16 January 2023, Quam Securities enforced the Share Charge and sold 5 million shares in China Oceanwide to meet the margin shortfall.

9.  On 22 March 2024, another statutory demand was served by Quam Securities on the Company requiring it to pay the amount due under the Margin Loan.

10.  On 24 April 2024, Quam Securities presented a winding-up petition against the Company in HCCW 245/2024 relying on the outstanding Margin Loan.

11.  On 9 August 2024:

(1)  Quam Securities assigned all its rights and benefits under the Margin Loan Agreements to the Petitioner; and

(2)  The Company, the Petitioner and the Debtor entered into a settlement deed (“Settlement Deed”) wherein the Company acknowledged that as at 29 December 2023, the total outstanding amount of the Short Term Loan and the Margin Loan (together with accrued interest) was HK$135,669,008.58, and agreed to pay HK$82,523,957.46 (“Settlement Amount”) in full and final settlement by 9 instalments between June 2024 and December 2026.

12.  Pursuant to the terms of the Settlement Deed, Quam Securities and the Company jointly applied for leave to withdraw the winding-up petition which was granted by the Court on 4 September 2024.

13.  In breach of the Settlement Deed, the Company failed to pay the 4^th and 5^th instalments and did not make any further repayment to the Petitioner. The Petitioner exercised its right to terminate the Settlement Deed and, on 1 September 2025, served a statutory demand on the Company for the sum of HK$160,200,257.01 being the amount due and payable as at that date (“Debt”). This is also the petitioning debt based upon which the Petitioner now seeks to bankrupt the Debtor.

14.  The winding-up petition against the Company based on the Debt was presented on 20 October 2025. On 19 December 2025, the Company sought leave to file the 1^st Affirmation of the Debtor (“Wang 1^st”) in opposition to the winding-up petition out of time. Linda Chan J considered Wang 1^st on a de bene esse basis and held that the Company failed to discharge the burden of showing that there is a bona fide dispute on substantial grounds in respect of the Debt (WU Judgment [28]). She thus wound up the Company.

15.  As summarized in WU Judgment [31], the Company’s case is that there was a “Cooperation Agreement” between the Company and the Petitioner, which is said to arise in this way:

(1)  Mr Henry Liu (“Liu”) had been an executive director and deputy Chairman of China Oceanwide since November 2014 and January 2020 respectively.

(2)  The Petitioner and Quam Securities are wholly owned subsidiaries of Quam Plus International Financial Limited (stock code: 952) (“Quam Plus”). Quam Plus and its subsidiaries (“Quam Group”) carried on business in providing financial services.

(3)  In 2015, the Company began to invest in China Oceanwide and opened a margin account at Haitong International Securities Company Limited (“Haitong”) to finance the purchase. Between May 2015 and May 2016, the Company invested in and became the holder of the 428m Shares through a combination of subscriptions and purchase in the market.

(4)  In February 2017, the group of China Oceanwide (“Oceanwide Group”) acquired a controlling stake in the Quam Group, and Liu became an executive director of Quam Plus. Since then, China Oceanwide and Quam Plus were “connected entities” with Liu being a common director.

(5)  Since September 2017, the share price of China Oceanwide had collapsed, which created a risk that Haitong would make margin call and the Company would have to liquidate the 428m Shares to meet the call, and could lead to a further decline in share price.

(6)  At that time, Liu suggested to the Debtor that the Company should continue to hold the 428m Shares “in order to support, stabilize and (where possible) enhance its share price”. This constitutes the Cooperation Agreement relied upon by the Debtor.

(7)  In furtherance of the Cooperation Agreement, China Oceanwide would coordinate off-market funds under its control to provide loans to supplement and maintain the Company’s position in Haitong’s margin account. If a margin call was triggered, Liu would arrange for entities of Quam Securities and/or China Oceanwide to advance funds to the Company so as to satisfy any margin requirements, and the Company would not be required to make any payment in respect of any margin call.

(8)  Liu assured the Debtor that “the Company would not bear ultimate liability for any loans coordinated by China Oceanwide under the Cooperation Agreement; and he would coordinate with key officers within the Quam Group and the Oceanwide Group to that end, including to ensure that no enforcement action would be taken against the Company” (“Assurances”).

(9)  By the end of November 2017, the share price of China Oceanwide continued to call and a margin call from Haitong became imminent. The Company obtained the Margin Loan from Quam Securities and transferred the 428m Shares to Quam Securities as collateral (“Quam Account”).

(10)  In August 2019, the share price of China Oceanwide continued to fall and the outstanding Margin Loan exceeded the credit limit of the Quam Account. In December 2019, the Company obtained the Short Term Loan to meet the margin shortfall.

(11)  Had the Company not relied on the Assurances (and but for the Cooperation Agreement), it would not have borrowed the Margin Loan and Short Term Loan.

16.  Based on the above, the Company argued that there is a bona fide dispute on substantial grounds in respect of the Debt on “illegality ground” (in that it was part of the Cooperation Agreement that involved illegal price rigging, contrary to the Securities and Futures Ordinance, Cap 571) and “collateral contract ground” (in that the Company was assured by the Assurances that the Debt would not be enforced). Both grounds were rejected by Linda Chan J.

17.  At the first hearing of the Bankruptcy Petition on 2 February 2026, DHCJ Alan Kwong ordered the Debtor to pay into Court a sum of HK$80,000,000 within 28 days (i.e. on or before 2 March 2026) as a condition for him to be granted retrospective leave to file his notice of intention to show cause dated 19 January 2026 and 3 affirmations in opposition to the Bankruptcy Petition out of time (“Condition”). The Condition is a usual condition to be imposed where a debtor fails to file and send a notice of intention to show cause against a bankruptcy petition 3 days before the hearing of the petition as required under rule 68 of the Bankruptcy Rules (Cap 6A): Re Guy Kwok-hung Lam [2025] HKCFI 1220 at [10]-[12]; Practice  Direction 3.1, para 16.1.

18.  The Debtor did not comply with the Condition. Instead, on the last day for compliance, he took out a summons (“Stay Summons”) for a stay of: (1) the Bankruptcy Petition pending the resolution of the Company’s appeal in CACV 142/2026 against the WU Judgment; and (2) the Order of DHCJ Alan Kwong imposing the Condition until 28 days after the uplift of the stay pending the Company’s appeal.

19.  At the first hearing of the Stay Summons on 20 March 2026, DHCJ Alan Kwong adjourned it for substantive argument to be heard together with the Bankruptcy Petition.

20.  The Stay Summons and the Bankruptcy Petition came before me on 30 April 2026. At the hearing, the Petitioner was represented by Mr Alexander Burg, and the Debtor was represented by Mr Du Jinsong. After hearing argument from counsel, I reserved my Judgment, which I now deliver.

21.  Mr Burg made an overarching point that it was an abuse of process for the Debtor to ask for a stay of the Bankruptcy Petition, having previously failed to obtain such a stay from DHCJ Alan Kwong at the first hearing of the Bankruptcy Petition on 2 February 2026. Para 28 of the Debtor’s skeleton argument for that hearing reads:

“Or alternatively [to the dismissal of the Bankruptcy Petition], the [Bankruptcy] Petition should be stayed, or adjourned until the disposal of the intended appeal by the Company [against the WU Judgment] with costs be reserved.”

22.  The Debtor’s request for a stay was unsuccessful before DHCJ Alan Kwong who, rather than granting a stay of proceedings, made the order imposing the Condition.

23.  Mr Du relied on Order 45, rule 11 of the Rules of the High Court which provides that the Court may grant a stay of execution of a judgment or order or other relief on the ground of matters which have occurred since the date of the judgment or order. He submitted that the Company’s filing of the Notice of Appeal (“NOA”) against the WU Judgment on 20 February 2026 happened after the 2 February 2026 hearing before DHCJ Alan Kwong. The Debtor was therefore justified in asking the Court to revisit the question of stay.

24.  As was held in Tam Ho Man v Wong Kwok Tai (HCA 4736/1985, 20 October 1986), “matters which have occurred since the date of the judgment or order” within the meaning of Order 45, rule 11 refer to “matters which go to the validity of the judgment, and which if established before the court, might justify the court in saying that, this is not a judgment which on material now placed before it, it will allow to be executed upon”. The rationale is that the party against whom the judgment or order was made could not have taken advantage of such matters to persuade the Court not to make the judgment or order.

25.  In the present case, I agree with Mr Burg that there was no material change in circumstances since the hearing before DHCJ Alan Kwong when the Debtor’s request for a stay was not granted. The Company’s filing of the NOA did not constitute a material change in circumstances, because at the hearing before DHCJ Alan Kwong, the Debtor had already relied on the Company’s intention to mount the appeal as a basis for the stay. Order 45, rule 11 therefore does not assist the Debtor.

26.  Even if the Court were to entertain the Stay Summons, whilst the Court has case management power under section 16(3) of the High Court Ordinance and Order 1B, rule 1(2)(e) of the Rules of the High Court to stay any proceedings before it, Mr Burg reminded me that when called on to exercise such power, the Court should consider the balance of convenience and fairness as between the parties, and exercise its discretion in such a manner to ensure that its procedures are used in a logical, fair and cost-efficient manner: Lok Man Sin v Lam Chi Wing [2019] HKCFI 56 at [20]. A plaintiff should not be deprived of the right to continue proceedings commenced as of right in the absence of “very good reasons”: Rankothpedi Durayalage Kamalawathi v The Director of Immigration [2018] HKCFI 1579 at [13].

27.  Mr Burg submitted that the Stay Summons should be dismissed because the Company’s appeal against the WU Judgment has no merits. There is therefore no good reason, let alone very good reason, to stay the Bankruptcy Petition pending the resolution of the Company’s appeal.

28.  Mr Du contended that the Company’s appeal against the WU Judgment has a strong likelihood of success, or is at least reasonably arguable. He relied solely on para 3 of the NOA which reads:

“Further, the learned judged (sic) erred in law in concluding that the Assurance (sic) are wholly incredulous by failing to consider the sufficiently particularised contemporaneous evidence in Wang 1^st, which forms the substantial ground of a bona fide dispute.”

29.  Para 3 of the NOA challenges Linda Chan J’s rejection of the “collateral contract ground” (see [16] above), and is directed at WU Judgment [46] where the judge found that the Assurances is wholly incredulous and is contradicted by:

(1)  The Company’s own act in (a) making repayment of the Margin Loan, (b) entering into formal agreements with Quam Securities and the Petitioner for the purpose of extending the repayment dates of the Margin Loan and the Short Term Loan, and (c) entering into the Settlement Deed acknowledging and admitting liability to pay the Margin Loan and the Short Term Loan; and

(2)  Quam Securities’ act in (a) selling 5 million shares in China Oceanwide to meet the margin call in January 2023, (b) demanding the Company to repay the Margin Loan, and (c) presenting winding-up petition against the Company in HCCW 245/2024.

30.  As a start, there is no basis to complain that Linda Chan J failed to consider the contents of Wang 1^st, when she expressly stated in WU Judgment [28] that she had considered the grounds raised by the Company in Wang 1^st on a de bene esse basis, and summarized the Company’s case in WU Judgment [31]-[33]. The judge’s assessment and weighing of evidence is a matter predominantly within her purview. There is nothing in the NOA to convince me that she was plainly wrong in her conclusion which warrants appellate intervention.

31.  In any event, I agree with Linda Chan J’s analysis set out in WU Judgment [46]. The Debtor also had no answer to the judge’s finding that: (1) the Company is precluded from disputing its liability to pay the Petitioner by reason of contractual estoppel, in the face of the statements, acknowledgments and representations made by the parties as recorded in the Settlement Deed (WU Judgment [36]-[42]); and (2) the Company has not been able to show how the Assurances would bind the Petitioner, when Liu was only an executive director of Quam Plus and did not have authority to act on behalf of (and bind) Quam Securities and the Petitioner which are separate entities from Quam Plus (WU Judgment [45]). Her overall reasoning in rejecting the “collateral contract ground” advanced by the Company could not be faulted.

32.  At the hearing, Mr Du made a further point that Linda Chan J “deviated from the Petitioner’s pleaded case” in the winding-up petition when she stated in WU Judgment [30] that the Petitioner “relies on the Settlement Deed”, whereas the Debt under the statutory demand and the winding-up petition was based on the outstanding Short Term Loan and Margin Loan. The argument could not be understood. Clearly, the judge was referring to the Settlement Deed as evidence of admission by the Company of its liability to pay the outstanding Short Term Loan and Margin Loan. The Petitioner was not suing on the Settlement Deed as such. The WU Judgment [15] made clear that the Petitioner had exercised its right to terminate the Settlement Deed by reason of the Company’s failure to pay the Settlement Amount.

33.  In the premises, the Company’s appeal against the WU Judgment based on para 3 of the NOA is devoid of merit. There is no good reason to delay the bankruptcy proceedings against the Debtor and await the determination of the Company’s appeal against the WU Judgment which has no prospect of success, especially where no appeal date has been fixed and it is uncertain when the appeal will be resolved.

34.  It follows that the Stay Summons must be dismissed.

35.  Mr Du accepted that without a stay and following the Debtor’s failure to comply with the Condition, the Bankruptcy Petition is uncontested and the Court should make the usual bankruptcy order against the Debtor: Re Guy Kwok-hung Lam, supra at [15]; Re Deng Jiang [2024] HKCFI 2260 at [18]. I so order.

36.  The Petitioner’s costs of the Bankruptcy Petition and the Stay Summons (including all costs reserved, if any) shall be paid out of the estate of the Debtor. Such costs are to be taxed if not agreed.