RE ADVANCED INK & COATINGS LTD

HCCW 400/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 400 OF 2005

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J U D G M E NT

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1.  This is a petition to wind up Advanced Ink & Coatings Ltd (“the Company”) presented by a contributory, Chan Man Bun, under section 177(1)(f) of the Companies Ordinance, Cap. 32.

2.  The Company has not appeared.  On 27 July 2005, there was an application before the Practice Master for leave to be given to a director Li Hsien Chen to represent the Company.  Leave was refused by the Practice Master.

3.  No evidence has been filed by the Company in these proceedings, although the Company has written to the court on 25 and 28 July 2005.  It would appear that these letters had not been copied to the petitioner although they had been supplied to the Official Receiver.  Notwithstanding no evidence was filed by the Company, I have noted the grounds of opposition raised in the said letters of the Company.  In my view, none of the grounds of opposition in the said letters are valid.

4.  The Company was incorporated in 1986.  It has a nominal capital of $3.9 million divided into 3.9 million shares of $1 each.  In about May 1994, the petitioner subscribed for shares in the Company.  According to him, he was allotted 390,000 shares but he has paid only $200,000 for 200,000 of the shares allotted.  He claimed that the remaining $190,000 was credited as fully paid.

5.  That is disputed by the Company.  The Company alleged that the petitioner has refused to pay the balance of $190,000 and because of this the petitioner has “abnegated” his rights to be a shareholder.

6.  I cannot see how this could be the case.  As admitted by the Company in its letters to the court, the petitioner’s name remains on the register of members.  Whether the Company has failed to delete the petitioner’s name due to negligence is neither here nor there.  There is nothing in the Company’s contention that the petitioner does not have the necessary locus to present this petition.

7.  In 2002, the Company decided to sell its fixed assets, as it had failed to obtain a renewal of its licence for its factory in Shenzhen.  The sale was completed in about March 2003 and the Company has discontinued its operation since.  According to the balance sheet as at 31 December 2003, the Company has retained profits of about $3.7 million.  The petitioner had liaised with the other directors to obtain his share of the proceeds of sale from the Company, in anticipation that the Company was to be wound up after it has ceased operation.  As nothing had happened, in October 2004 the petitioner retained solicitors and his solicitors wrote to the Company demanding audited accounts and an account on the sale of the assets in 2003.

8.  The demand was repeated in November 2004.  Neither the Company nor the other directors had replied to the letters of the petitioner’s solicitors.  Hence, the petition herein was presented on 31 May 2005.  It would appear from the audited accounts as at 31 December 2003 that the Company is solvent.  Since the sale of its fixed assets and technology in March 2003, the Company has ceased to be a going concern.

9.  The substratum of the Company has gone since it ceased all operations.  Unless the Company is wound up, the petitioner is unable to obtain the fruit of his investment.  The “financial issues” that would need to be resolved mentioned in one of the Company’s letters would be attended to by the liquidators.

10.  I am satisfied in the circumstances that it would be just and equitable to wind up the Company.  I make a winding-up order.  The petitioner’s costs are to be paid out of the assets of the Company.