RE DAYS IMPEX LTD

HCCW298/2011
HCCW299/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO. 298 OF 2011

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(HEARD TOGETHER)

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D E C I S I O N

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1.  I have two winding-up petitions before me relating to two associated companies. Both petitions were issued on 14 September 2011 by the Hongkong & Shanghai Banking Corporation Limited.

2.  In HCCW298/2011, the debt relied on is HK$5,001,930.75 and US$19,330,077.17, plus interest which is continuing to accrue.  A statutory demand was served in respect of that debt on 12 August 2011.  In HCCW299/2011, the debt that is due is HK$33,288,589.76 and US$3,855,400.83, plus interest which is continuing to accrue.  The statutory demand in respect of that debt was also served on 12 August 2011. 

3.  It was suggested at one point to me this morning that, in the case of HCCW298/2011, there was a question concerning whether, at the moment, anything is actually due to the Petitioner.  It transpired, when I questioned how the calculation of the figures which are contained in paragraph 7 of the third affirmation of Mr Dayaram, was arrived at that it appears to have been a rather fanciful calculation which assumes that the company is entitled to treat as deductible from the amount claimed by HSBC the valuation of the property over which it has security.  Self-evidently, until that property is actually sold and security realised, the full amount claimed by HSBC is due and payable.  There is also a suggestion that there are some other amounts which should have been set off.  But even if those deductions which relate to the relationships between the relevant company and its associated companies are correct, then HSBC is still a creditor which is entitled to present a winding-up petition.

4.  The principal basis upon which I was asked today by Mr Sheppard, who appeared on behalf of the Companies, not to make winding-up orders was that Mr Dayaram, the ultimate beneficial owner of the Companies, wants to continue to try and negotiate with the principal banking creditors some form of restructuring to avoid a winding-up.

5.  Miss Lam, who appeared today on behalf of HSBC and the provisional liquidators, told me, on instructions, that all the proposals which had been received by HSBC from Mr Dayaram, up to and including proposals made on 8 December 2011, have been considered by the banking creditors who make up the large majority of the creditors of the two Companies and, other than in the case of Bank of Baroda, have been rejected.

6.  In these circumstances, I can see no legitimate reason for not granting the normal winding-up orders sought by the Petitioner in both cases.