Re Chun Tai Industries Ltd.

HCCW 969/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO.969 OF 1999

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J U D G M E N T

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1. This is a creditor's petition based on an outstanding debt of $174,063 in respect of goods sold and delivered. The debt is not disputed.

2. The Company which appears today by one of its directors Mr Wong Kui Chuen informed the court that the Company is undergoing a restructuring and submitted to the court a document dated 4 November 1999. It is a letter from the financial adviser to a proposed investor interested in putting forward a capital and debt restructuring proposal. It will be noted that the document is now over two months' old and there is no update as to the progress of that particular proposal. More importantly, the petitioner had no knowledge whatsoever of any possible restructuring until this morning. No one had attempted to contact or inform the petitioner which is undoubtedly a creditor of the Company of any proposal for restructuring. It would therefore appear that one should view any assertion of a possible restructuring with a certain amount of scepticism.

3. The Company made a proposal for repayment to the petitioner, namely that $20,000 be paid today and the balance in 11/2 months. That proposal was rejected. It would appear that several months back, in November 1999, there had been a settlement agreement between the parties but the Company had reneged on that agreement by providing a cheque that bounced. In the light of that experience, the petitioner is unwilling to embark on another attempted settlement. It does not believe that the Company will be able to come up with the balance.

4. Strictly speaking, there is no evidence of any restructuring. In any event, the oral evidence of Mr Wong relating to any possible restructuring is tentative and sketchy in the extreme. There is no evidence of any in-principle support by the majority of the Company's creditors even assuming (contrary to my view) the existence of a restructuring proposal. There is also the fact that the debt is not disputed. In these circumstances, I believe that an adjournment will be a waste of costs and resources and serve no useful purpose.

5. Accordingly I will make a compulsory winding-up order. The petitioner's costs and the costs of the Company are to be a liquidation expense.