RE CENTURY MAIN INVESTMENTS LTD

HCCW 811/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 811 OF 2004

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D E C I S I O N

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1. I am hearing this application ex parte on notice. On 27 July 2004 I directed the petitioner's solicitors to give notice of their intended application to appoint provisional liquidators to Century Main Investments Limited ("the Company") of the hearing today at 10 am.

2. Notice was duly given to the Company on 27 July 2004 at 8 pm. Documents were served at the registered office of the Company with a covering letter in Chinese informing the Company of the nature of the petitioner's application.

3. The Company knows, as a limited company, that leave of the court is required for a director to represent the company, as the Company has already sought leave for one of its directors, Mr Hui Xiaodong, to represent the Company in another High Court action.

4. Mr Hui has turned up at the hearing today. No leave was obtained from the court for him to represent the Company. He has no right to address the court in these circumstances. I decide to hear the petitioner's application as ample opportunity has been given to the Company to seek the necessary order regarding representation from the court. I would also mention that I find it astonishing that a company with a paid-up capital of $25 million should find itself in a position with no funds to arrange for legal representation.

5. I have been taken through the skeleton submission of the petitioner's counsel, Mr Law. I am satisfied there is a good prima facie case for a winding-up order and that the circumstances are such to justify an ex parte application to the court for provisional liquidators to be appointed.

6. The parent company of the Company, Shenzhen Nanyou (Holdings) Limited, has been carrying on a restructuring or reorganisation of the business of the group for some time. Part of the plan is for the Company to cease business and for the Company's assets to be transferred to the parent. The valuable assets are then to be sold to third party investors to reduce the liabilities of the parent.

7. The Company's assets, apart from real properties in Hong Kong, which are under mortgage, consist of shares in various companies in the mainland. These shares can easily be transferred by the Company to its parent. If that is done, they would be put out of the reach of the creditors of the Company.

8. The status quo should be maintained pending the determination of the winding-up petition. There would be no prejudice occasioned to the Company in the meantime by the appointment of provisional liquidators, as the Company has ceased business on the available evidence. Besides, the Company would be protected by the undertaking as to damages offered by the petitioner, which is a bank.

9. I therefore grant the ex parte application for the appointment of provisional liquidators. I will also direct the petitioner to issue an inter partes summons returnable within a week for continuation of the order granted today.

10. If the Company wishes to oppose the continuation of the order at the hearing next week, it should either instruct solicitors to appear or seek leave from a master in the meantime for a director to represent the Company.

11. I will now hear counsel on the terms of the order to be made.