LEE KAM HUNG ALAN v. PIONEER INDUSTRIES (HOLDINGS) LTD

HCMP 1523/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1523 OF 2014

______________________

______________________

______________________

(HEARD TOGETHER)

_____________

D E C I S I O N

_____________

1.  I have before me two originating summonses seeking orders pursuant to section 122(1B) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32, and section 610 of the Companies Ordinance, Cap 622.

2.  The facts of the application are unusual. The company, which is the subject of the applications, was a listed company which was subsequently privatised.  Its accountants and Board proceeded for a number of years on the basis that it was a private company and therefore the annual general meetings which took place, which were purportedly conducted by written resolution, occurred within more than six moths and less than nine months after the end of the company’s financial year.

3.  If the company had been a private company, as the Board and the accountants had assumed, the relevant provisions of the Ordinance would have been complied with.  However, technically, the company remained a public company, and the Companies Registry have brought to the company’s attention the fact that consequently the annual general meetings should have been held within six months of the end of the relevant financial years. 

4.  I am satisfied that this is a highly technical breach of the Ordinance  and that it is appropriate to grant orders remedying the breaches in respect of the three years where, technically, a prosecution is still possible. 

5.  There is one technical point that does arise from the application which it is desirable that I explain.  Section 111(6)(a) of the Companies Ordinance, Cap 32, provides that:

“A company is not required to hold a meeting in accordance with subsection (1) if-

(a) everything that is required or intended to be done at the meeting (by resolution or otherwise) is done by a resolution or resolutions in accordance with section 116B.”

6.  Mr Benny Lo, who appeared for the applicant, argued that if the meetings were not held within the required time period, it followed that “everything that is required or intended to be done at the meeting (by resolution or otherwise)” had not been complied with because the reference to “meeting” must be taken as meaning a meeting convened, albeit notionally, within the correct time period, which in the present case is within six months of the end of the financial year.  It therefore followed that no effective written resolution had taken place and, therefore, there had been no annual general meeting.  In my view, this is correct. 

7.  It therefore follows that the orders that are to be granted are not to extend the periods within which the profit and loss account and balance sheet were approved by purported resolutions, but to convene a new annual general meeting, which will be 16 November 2014. 

8.  It follows, as this application was made after the new Ordinance came into effect, that although the sections have been breached are the relevant sections of the old Ordinance, the extension is to be granted pursuant to section 610 of the new Companies Ordinance, and I grant, pursuant to that section, an order that the annual general meetings to remedy the mistake that has taken place are held on or before 16 November 2014.