RE JINRO (H.K.) INTERNATIONAL LTD

HCCW 1352/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 1352 OF 2001

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D E C I S I O N

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1. This is an application by the provisional liquidators of Jinro (H.K.) International Limited ("the Company") for power to dispose of eleven kinds of loans and floating rate notes all in the nature of distressed debt securities. The application is opposed by the Company. The Official Receiver adopts a neutral position. The petitioners support the application of the provisional liquidators.

2. The estimated market value of these securities is in the region of US$1.7 million. Other than these securities, the only valuable asset of the Company is its interest in Jinro Japan Inc. The Company is insolvent, on the available evidence that has been adduced before the court in previous applications.

3. These securities are of a highly speculative nature. The provisional liquidators have obtained indicative bid pricing from Deutsche Bank and ICAP AP (Singapore) Pte Ltd. A number of them have been valued at as little as 5% or less of the principal amount.

4. The Company is opposed to giving power to the provisional liquidators to dispose of the securities on the ground that there should be no undue haste in this. It was submitted that the provisional liquidators should continue to investigate whether there would be any value in retaining these securities and, perhaps, to obtain expert advice if any of them should be sold. It was also submitted that if one of the reasons for the disposal of these securities is to fund the expenses of the provisional liquidators, the provisional liquidators should seek such funding from the petitioners who have applied for their appointment.

5. As I have said, these securities are of a highly speculative nature. Whether this is the right time to sell is a commercial decision that should rightly be left to the provisional liquidators, who are entrusted with the duty to gather in assets of this insolvent company for the benefit of creditors. The provisional liquidators may not necessarily wish to sell the securities immediately or en bloc, all they are seeking is power to dispose of some or all of these securities at an opportune moment.

6. In so far as the funding of the expenses of the provisional liquidators is concerned, there is no obligation that the provisional liquidators should seek funding from the petitioners in the first place.

7. In my view, it would be appropriate to grant the order as sought in paragraph 3 of the summons with one amendment in that the securities concerned should be set out in a schedule annexed to the order.