RE HANG SENG BANK LTD

HCMP 2348/2025

[2026] HKCFI 757

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2348 OF 2025

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REASONS FOR JUDGMENT

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1.  At the hearing of the petition presented on 13 January 2026 by Hang Seng Bank Limited (恒生銀行有限公司) (“Company”), I sanctioned a scheme of arrangement (“Scheme”) between the Company and the registered holders of its shares (other than 1,188,057,371 shares held by The Hongkong and Shanghai Banking Corporation Ltd (“HSBC Asia Pacific”) via its nominee) (“Scheme Shareholders”) and confirmed a reduction of capital for the purpose of implementing the Scheme. These are the reasons for my judgment.

A.  BACKGROUND

2.  The Company was incorporated in Hong Kong on 5 December 1952. It has since 1960 been a public company. The issued shares of the Company have since 1972 been listed on the Main Board of The Stock Exchange of Hong Kong Ltd (“HKEx”)[1].

3.  The Company and its subsidiaries (together “HS Group”) engage in banking and related financial businesses in Hong Kong[2].

4.  On 9 October 2025, HSBC Holdings plc (“HSBC Holdings”), HSBC Asia Pacific and the Company jointly announced (“Joint Announcement”) that HSBC Asia Pacific (as offeror) requested the Company’s board to put forward a proposal to the Scheme Shareholders for acquisition of all the shares held by them (“Scheme Shares”) and, thereafter, privatisation of the Company (“Proposal”).

5.  The Proposal involves cancellation of all the Scheme Share in exchange for payment by HSBC Asia Pacific of HK$155 in cash, less any dividend adjustment amount (see §8(2) below) (“Scheme Consideration”)[3].

6.  Following the Joint Announcement, the closing price of the Company’s shares surged by 25.9% from HK$119 on 8 October 2025, the last pre-announcement trading date (“LPTD”), to HK$149.8 on 9 October 2025[4].

7.  The shareholding structure of the Company as at 12 December 2025 was as follows[5]:

(1)  Issued shares: 1,872,937,536 shares.

(2)  Scheme Shares: 684,880,165 shares representing 36.57% of the issued shares;

(3)  “Non-Scheme Shares” held by HSBC Asia Pacific (via nominee): 1,188,057,371 shares representing the remaining 63.43% of shares in issue.

8.  The principal features of the Scheme are as follows:

(1)  All the Scheme Shares on the record date for determining entitlements under the Scheme will be cancelled and extinguished on the date on which the Scheme becomes effective, which is expected to be 26 January 2026 (“Scheme Effective Date”).

(2)  In exchange for cancellation of the Scheme Shares, HSBC Asia Pacific (as offeror) will pay HK$155 in cash for each Scheme Share, less any “dividend adjustment amount”. [6]  As no dividend has been declared after the Joint Announcement, there is no dividend adjustment amount[7].

(3)  The Company’s issued share capital will be reduced by the amount represented by the Scheme Shares cancelled (“Capital Reduction”), and will be immediately restored to the same level by the issue of the same number of new shares to HSBC Asia Pacific (or its nominee) as paid-up shares applying the credit arising from the Capital Reduction.

(4)  The Company will upon implementation of the Scheme and the Capital Reduction become a wholly-owned subsidiary of HSBC Asia Pacific, and the Company’s listing on HKEx will be withdrawn[8].

(5)  HSBC Asia Pacific will bear all costs and expenses incurred by the Company in connection with the Scheme[9].

B.  CONVENING HEARING

9.  At the convening hearing held on 11 December 2025, Mr Jose Maurellet SC (leading Mr Jason Yu), counsel for the Company, addressed the matters required to be considered by the court at the convening stage[10]. These included:

(1)  Identified the principal features of the Scheme and possible areas of concerns (as discussed in Section B1-B3 below);

(2)  Laid before the court a draft composite document which comprised Questions & Answers, Letters from the Board and Independent Board Committee, letter from Independent Financial Advisor[11] (“IFA Letter”), Explanatory Statement (“ES”), the Scheme, notice of Court Meeting, notice of General Meeting together with forms of proxy (“Scheme Document”);

(3)  Demonstrated that the draft Scheme Document complied with all regulatory and statutory requirements and the information was provided in a fair and accurate manner such that it was fit to be sent to the Scheme Shareholders. The information included:

(a)  the terms and effect of the Scheme;[12]

(b)  the reasons for and benefits of the Proposal;[13]

(c)  an easy-to-understand summary of the Proposal and “questions and answers” section;

(d)  extensive analyses prepared by the IFA together with its opinion on the Proposal;[14] and

(e)  disclosure of material interests of the Company’s directors in compliance with s.671(3) of the Companies Ordinance (Cap. 622) (“CO”).[15]

10.  I turn to the areas of concerns which Mr Maurellet has helpfully drawn to the attention of the court.

B1.  Material adverse change as a condition

11.  In addition to the conventional conditions precedent for the Scheme to become effective, the Scheme includes a condition (h) (“Condition (h)”) based on several privatisation scheme precedents[16], which is in these terms:

“since publication of the Joint Announcement, there having been no adverse change in the business, assets, financial or trading positions, profits or prospects of any member of the [HS Group] to an extent which is material in the context of the [HS Group] taken as a whole or in the context of the Proposal”.

12.  The effect of Condition (h) is that even after the Scheme has been approved by the Scheme Shareholders and sanctioned by the court, there is a possibility that HSBC Asia Pacific may not proceed with Scheme. This gave rise to 2 concerns: (1) whether inclusion of Condition (h) is justifiable in the circumstances of the Scheme, and (2) how the Company goes about satisfying this Condition which is in substance a right to opt out which may only be exercised by the offeror.

13.  Mr Maurellet referred the court to the rationale for including Condition (h), which were[17]:

(1)  HSBC Asia pacific is a wholly-owned subsidiary of HSBC Holdings, whose securities are listed and traded on various exchanges including HKEx. HSBC Holdings owes duties to act in the best interests of itself and its shareholders as a whole. In addition, HSBC Asia Pacific is an authorised institution in Hong Kong with a very large number of customers and depositors. Condition (h) is necessary to protect the interests of these stakeholders, such that if there is a material adverse change in the business or assets of HS Group, it would not be in the interests of these stakeholders for HSBC Asia Pacific to proceed with the Proposal.

(2)  The interests of the Scheme Shareholders are safeguarded by the requirement under Note 2 to Rule 30.1 of the Codes on Takeovers and Mergers and Share Buy-backs (“Takeovers Code”). As prescribed in Note 2, HSBC Asia Pacific is only permitted to invoke Condition (h) as a basis for not proceeding with the Proposal if the circumstances which give rise to the right to invoke such condition are of material significance to HSBC Asia Pacific in the context of the Proposal. In other words, Condition (h) cannot be invoked by HSBC Asia Pacific lightly.

14.  I accepted that for the reasons given by HSBC Asia Pacific and the protection enshrined in Rule 30.1 of the Takeovers Code, the inclusion of Condition (h) as a condition precedent to the Scheme becoming effective was reasonable and justifiable.

15.  As regards compliance with Condition (h) for the Scheme to become effective, Mr Maurellet proposed that HSBC Asia Pacific do at the sanction hearing inform the court whether in its view, Condition (h) has been satisfied. Once the confirmation is given to the court and assuming the other conditions precedent are satisfied or waived, there will be certainty that the Scheme will become effective on 26 January 2026 as envisaged in the Expected Timetable.

B2.  Regulators’ comments  

16.  The Company submitted the earlier drafts of the Scheme Document to the Securities and Futures Commission (“SFC”)  and HKEx for their review and comments. Both the SFC and HKEx confirmed in writing that they have no further substantive comments on the latest draft Scheme Document. This was necessary to ensure that any concerns which the regulators had raised have been sufficiently addressed by the time the draft Scheme Document came to be considered by the court (Re Allied Properties, §26(4)).

17.  On the question of whether the “Non-Discretionary Client Shares” (as defined in §22(2)(b) below) should be allowed to attend and vote at the Court Meeting (as further discussed in Section B3 below), HSBC Asia Pacific filed submissions with the Executive Director of the Corporate Finance Division of the SFC (“Executive”) to explain why it considered the entities within HSBC group of companies (“HSBC Group”) (including HS Group entities) should be allowed to vote on the Non-Discretionary Client Shares if so instructed by clients who are not Concert Parties, and such votes are eligible to be counted towards Rule 2.10 of the Takeovers Code.

18.  The Executive’s delegate verbally confirmed to the solicitors for HSBC Asia Pacific and HSBC Holdings that the Executive did not have any concern or comment on the proposed arrangements and due diligence steps for the voting of the Non-Discretionary Client Shares[18].

B3.  Voting arrangement

19.  The Scheme constitutes a takeover offer under s.674(5) of the CO. Thus, voting at the Court Meeting must satisfy the requirements under CO s.674(2) and Rule 2.10 of the Takeovers Code:

(1)  Under the CO, at least 75% (in value) of the voting rights of the members present and voting, in person or by proxy, must be cast in favour of the Scheme.

(2)  Under the Takeovers Code, at least 75% of the votes attaching to the “disinterested shares” (within the meaning of the Takeovers Code) cast either in person or by proxy, must be cast in favour of the Scheme.

(3)  The negative 10% test under the CO and the Takeovers Code must also be satisfied. This requires not more than 10% of the total voting rights, present and voting at Court Meeting, attached to the “disinterested shares” (within the meaning under the CO and the Takeovers Code) are cast against the Scheme.

20.  The determination of which shareholders were entitled to vote at the Court Meeting was not a straight-forward exercise for the following reasons.

21.  The definition of “disinterested shares” under the CO and the Takeovers Code is different.

22.  Under CO s.674(3):

(1)  “disinterested shares” is defined as shares in the company other than those held by the offeror or its “associates”. The term “associate” is defined in s.667(1)(b) as a reference to “(i) a body corporate in the same group of companies as the offeror or member; (ii) a body corporate in which the offeror or member is substantially interested; or (iii) a person who is a party, or a nominee of a party, to an acquisition agreement with the offeror or member”.

(2)  In other words, “disinterested shares” comprise (a) the Scheme Shares held by Scheme Shareholders other than body corporates within HSBC Group, and (b) Scheme Shares held by HSBC Group entities on behalf of clients and the entities have no discretion over the exercise of voting rights in such shares (“Non-Discretionary Client Shares”).

(3)  As of mid-November 2025, HSBC Group entities held a total of 382 million Non-Discretionary Client Shares[19].

23.  Under the Takeovers Code:

(1)  “disinterested shares” is defined in Note 6 to Rule 2 as shares in the company other than those which are owned by the offeror or persons acting in concert with it.

(2)  “persons acting in concert” is defined as “comprise person who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate to obtain or consolidate ‘control’ (as defined below) of a company through the acquisition of any of them of voting rights of the company”, and the definition contains various classes of persons who will be presumed to be acting in concert unless the contrary is established (collectively “Concert Parties”).

24.  Mr Maurellet submitted that the Non-Discretionary Client Shares, albeit held by HSBC Group entities (which are Concert Parties) should be regarded as “disinterested shares” within the meaning of the CO for the following reasons:

(1)  The term “disinterested shares” is defined in s.674(3) of the CO as “shares in the company other than those held … by” persons specified in s.674(3)(a)(i), (ii) or (iii). The choice of words “shares … held … by” in s.674(3) is to be contrasted with references to “members”[20] in s.673[21] and s.674(2). This shows that “disinterested shares” may be “held by” persons who are not registered members.

(2)  The term “disinterested shares” is also used in the “negative 10% test” under s.674(2)(a)(ii) for scheme involving a takeover offer. The test ascertains whether the votes cast against the scheme “exceed 10% of the total voting rights attached to all disinterested shares”. The reference to “voting rights attached” suggest that, in identifying which shares are “held by” a disinterested person, the legislature is concerned with persons entitled to exercise the voting rights attached to shares, and not mere nominees or custodians.[22]

(3)  The vast majority of “shareholders” of listed companies hold their shares through CCASS, and CCASS would vote shares registered in its name in accordance with instructions (if any) received from its market participants. Such market participants would seek instructions from the beneficial owners. The result is that CCASS will vote a certain number of shares in favour of the resolution, and a certain number against it, according to the instructions it received (Re PCCW Ltd [2009] 3 HKC 292, §193, per Barma J (as he then was)).

25.  I agreed with Mr Maurellet’s submissions.

26.  In my view, in adopting the term “disinterested shares” (as opposed to disinterested shareholders or members) as the criterion for eligibility to vote on a members’ scheme, the legislature must have intended to allow the “shares”, regardless of whether they are held by an interested party or a concert party, to vote on the scheme. The Non-Discretionary Client Shares, as defined in the Scheme Document, falls within the meaning of “disinterested shares” under s.674(3) of the CO, and should be entitled to attend and vote at the Court Meeting.

27.  In the present case, the Company came up with a definition “Code Disinterested Shareholders” as a reference to holders of Scheme Shares, other than HSBC Asia Pacific and the Concert Parties, except where any member of HSBC Group, HS Group, BofA Securities group or Goldman Sachs group[23] is acting in its capacity as a holder of Scheme Shares on behalf of a beneficial owner where the beneficial owner meets the following 3 criteria (“Disinterested Beneficial Owner”):

(1)  It controls or directs the exercise of the voting rights attached to the shares;

(2)  It gives the instructions as to how the shares (if voted) are to be voted; and

(3)  It is not HSBC Asia Pacific or a Concert Party.

28.  In my judgment, for the purpose of the CO and the Takeovers Code, the “disinterested shares” entitled to vote on the Scheme should include all the shares beneficially owned by Disinterested Beneficial Owners even though such shares are held by HSBC Group entities or the  Concert Parties.

29.  To address the concerns in Re Chong Hing Bank, each of HSBC Asia Pacific and its Concert Parties which hold shares in the Company had given an irrevocable undertaking to the court[24] that it would  not attend or vote (or give instructions to vote) at the Court Meeting, save that the entities which hold Non-Discretionary Client Shares would vote at the Court Meeting on behalf of their clients if (and only if) express instructions have been given by such clients and if such shares are not held on behalf of HSBC Asia Pacific or Concert Parties (collectively “Undertakings”)[25].

30.  With the carefully crafted definitions of “Code Disinterested Shares”, “Non-Discretionary Client Shares” and “Disinterested Beneficial Owner”, and the Undertakings offered by the Concert Parties, there were sufficient safeguards to ensure that only the “disinterested shares” which satisfied the dual requirements under the CO and the Takeovers Code would be entitled to vote at the Court Meeting.

31.  Directions were given to the Company to convene a meeting of the Scheme Shareholders to be held on 8 January 2026 for the purpose of considering and, if thought fit, approving the Scheme (“Court Meeting”) and other ancillary matters (“Convening Order”).

32.  Pursuant to the Convening Order, the Court Meeting was held on 8 January 2026 at 10:30 am[26].

33.  According to the Chairman’s Report[27], Scheme Shareholders who held 275,909,257 Scheme Shares voted at the Court Meeting, in person or by proxy[28].

34.  On 8 January 2026, the Company held the General Meeting at 12:46 pm. A special resolution was passed with 97.30% of the votes cast by shareholders present and voting in favour of inter alia approving the Scheme, the Capital Reduction and withdrawal of the listing of the Company’s shares on HKEx[29].

C.  DISCUSSION

35.  The principles governing an application for sanction of a scheme of arrangement under ss.673-674 of the CO have been summarized in Re Chong Hing Bank Ltd [2021] HKCFI 3091, [2022] 1 HKC 377 at §27, a case involving privatisation of a listed company. The court will consider:

“(1) Whether the scheme is for a permissible purpose;

(2) Whether members who were called on to vote as a single class had sufficiently similar legal rights that they could consult together with a view to their common interest at a single meeting;

(3) Whether the meeting was duly convened in accordance with the Court’s directions;

(4) Whether members have been given sufficient information about the scheme to enable them to make an informed decision whether or not to support it;

(5) Whether the necessary statutory majority has been obtained; and

(6) Whether the Court is satisfied in the exercise of its discretion that an intelligent and honest man acting in accordance with his interests as a member of a class within which he voted might reasonably approve the scheme …”

36.  In the present case, each of the above factors is satisfied.

C1.  Permissible purpose & similar legal rights

37.  It is well established that privatisation of a listed company is an acceptable and permissible purpose for a scheme of arrangement (Re Allied Properties, §52).

38.  The Scheme Shareholders have sufficiently similar legal rights and could consult together with a view on their common interest at a single meeting given that all the Scheme Shares are ordinary shares, and the Scheme Shareholders will receive the Scheme Consideration in exchange for cancellation of their shares.

C2.  Court Meeting duly convened & held  

39.  The Court Meeting was duly convened:

(1)  In compliance with §§2-4 of the Convening Order, the Scheme Document (including notice of Court Meeting)[30] were made available or despatched to the Scheme Shareholders on 15 December 2025 by (a) advertisements[31], (b) publication at the Company’s website and HKExnews,[32] (c) prepaid service mail to their last known address in Hong Kong[33]; and (d) courier service to those Scheme Shareholders whose last known address is outside of Hong Kong (“Overseas Shareholders”)[34]. The Scheme Document was made available to any person entitled to attend the Court Meeting during the times specified and at the 3 addresses mentioned in §3 of the Convening Order[35].

(2)  While delivery of the Scheme Document to 44 Overseas Shareholders was unsuccessful, this merely represented 0.075% of the Scheme Shares[36]. It is reasonable to assume that the Scheme Shareholders would monitor the development from the further announcements made by the Company on its website, through which they would have access to the Scheme Document. In any event, the Convening Order provides that non-receipt of the notice by any Scheme Shareholder shall not invalidate the proceedings or the resolutions passed at the Court Meeting[37].

40.  In accordance with the Convening Order, the Court Meeting was duly held in the form of a hybrid meeting on 8 January 2026 at 10:30am at Hopewell Hotel and through an online platform,[38] which remained fully operational throughout the Meeting[39].

C3.  Sufficient information about Scheme

41.  The Scheme Shareholders were given sufficient information about the Scheme. Amongst the information set out in §8(3) above, in the IFA Letter, essential financial information and analyses in respect of the Proposal were provided to explain why the IFA opined that the Scheme Consideration was fair and reasonable and to assist the Scheme Shareholders in making an informed decision whether to vote for the Scheme:

(1)  Comparisons of the Scheme Consideration against the trading prices of the shares on different trading dates, which showed a premium ranging from 18.3% to 34.4%, and a premium of 83.4% over the unaudited net asset value attributable to the shareholders as at 30 June 2025[40].

(2)  A review of HS Group’s financial information and prospects, including the dividends declared by the Company since 2022[41].

(3)  Comparisons of the premiums of the Scheme Consideration against all successful cash privatisations involving companies listed on the Main Board where the offeree had an implied value of at least HK$10 billion, as well as comparisons against all successful privatisation precedents involving Hong Kong licensed banking groups listed on the Main Board.[42]  

C4.  Intelligent & honest men might reasonably approve

42.  In considering whether an intelligent and honest man acting in accordance with his interests as a member might reasonably approve the Scheme, the Court would be slow to differ from the majority views (Re Chong Hing Bank, §38).

43.  The Scheme is one which intelligent and honest men acting in accordance with their interests may reasonably approve, taking into account the following facts and matters:

(1)  The Scheme Consideration was determined on an arm’s length basis taking into account, inter alia, the trading prices of the shares, publicly available financial information of the Company and recent successful privatisation transactions in Hong Kong. The amount was arrived at after 3 rounds of improvement over the initial proposal from HSBC Holdings[43].

(2)  The Scheme Consideration of HK$155 represents[44]:

(a)  A premium of 30.3% over the closing price of the shares of HK$119 quoted on 8 October 2025, being the LPTD.

(b)  A premium of 48.6% over the average closing price in the last 360 trading days up to and including the LPTD.

(c)  A price which is higher than the highest trading price of the shares (i.e. HK$154) from March 2022 to LPTD.

(d)  An implied price to book ratio (“P/B”) of 1.8x based on the unaudited consolidated net asset value of HS Group as at 30 June 2025.[45] This is higher than comparable Hong Kong banks (“HK Banking Peers”) whose P/B ratios are 0.3x, 0.4x and 1.1x respectively[46].

(3)  The IFA acknowledged that while not all Scheme Shareholders may wish to sell their shares, given the premium embedded in the Scheme Consideration, the Scheme Shareholders will be able to reinvest the proceeds in Hong Kong Banking Peers or HSBC Holdings if the Proposal is successful. Hence, the IFA concluded that the Proposal and Scheme are fair and reasonable as far as the Company’s disinterested shareholders are concerned, who are recommended to vote in favour of the Proposal.

(4)  The Company’s Independent Board Committee concurred with the IFA and recommended voting in favour of the Scheme.

C5.  Approval by requisite majority

44.  The Company’s shareholding structure as at the Meeting Record Time[47] is as follows:

Shares		Number of Shares	~ Percentage of Shares in issue
Non-Scheme Shares
(A) Shares held by HSBC Asia Pacific		1,188,057,371	63.4328
Scheme Shares
(B) Scheme Shares held by HSBC Asia Pacific and Concert Parties (other than Code Disinterested Shares):		22,813,471	1.2180
	(B1) HSBC Group discretionary fund managers, asset managers and principal traders, and other entities	17,647,285	0.9422
	(B2) Kathleen Gan Chieh Huey	2,500	0.0001
	(B3) David Gordon Eldon	300	0.0000
	(B4) Close relatives and controlled entities of Kuok Khoon Chen	5,148,634	0.2749
	(B5) Camay Wong	4,514	0.0002
	(B6) BofA Securities	10,217	0.0005
	(B7) Goldman Sachs	21	0.0000
(C) Code Disinterested Shares = (F) – (A) – (B)		662,066,694	35.3491
(D) Disinterested Shares under CO = (F) – (A) – (B1)		667,232,880	35.6249
(E) Total Scheme Shares = (F) – (A)		684,880,165	36.5672
(F) Total Shares		1,872,937,536	100

45.  At the Court Meeting, the votes cast by Scheme Shareholders present and voting, in person or by proxy, for and against the resolution approving the Scheme (“Resolution”) were as follows[48]:

	(1) Total number (or percentage) of votes cast	(2) FOR Resolution	(3) AGAINST Resolution
Present and voting, in person or by proxy	275,909,257	236,604,569	39,304,688
Percentage of voting rights	100%	85.7545%	14.2455%

46.  The majority in value test was satisfied under both s.674(2) of the CO and Rule 2.10 of the Takeovers Code:

(1)  In light of the Undertakings provided by the Concert Parties, only Code Disinterested Shares were voted at the Court Meeting[49].

(2)  Therefore, 85.75% of the voting rights of members (who only held Code Disinterested Shares) present and voting at the Court Meeting, in person or by proxy, were cast in favour of the Resolution.

(3)  The voting turnout among the Code Disinterested Shares is 41.67% (i.e. 275,909,257 ÷ 662,066,694).

47.  The negative 10% test under the CO and the Takeovers Code is also satisfied. Votes attached to 39,304,688 Scheme Shares were cast against the Resolution at the Court Meeting. This represents[50]:

(1)  5.89% of total voting rights attached to all the “disinterested shares” under the CO; and

(2)  5.94% of total voting rights attached to all the Code Disinterested Shares.

48.  Accordingly, the Scheme attained the requisite majorities under both the CO and the Takeovers Code.

C6.  Other matters specific to Scheme

49.  In addition to the Undertakings given by the Concert Parties, HSBC Asia Pacific (which is not a party to the Scheme) has also given an undertaking to the court agreeing to be bound by the Scheme and will execute and do and procure to be executed and done all such documents, acts and things as may be necessary or desirable to be executed and done by it to give effect to the Scheme.

50.  Mr Maurellet confirms that subject to obtaining sanction from the court, all the conditions precedent to the Scheme have been satisfied. The Company and HSBC Asia Pacific are not aware of any material adverse change to the business or assets of HS Group[51]. HSBC Asia Pacific will give notice to the Company immediately after the hearing to confirm that Condition (h) has been satisfied.

C7.  Confirmation of Capital Reduction

51.  The Scheme involves a technical reduction of share capital[52]. Under s.229 of the CO, the court will confirm a reduction of capital which has been approved by a special resolution of members if: (1) the shareholders are treated equitably; (2) the reasons for the reduction are properly explained; (3) the interests of creditors are safeguarded; and (4) the reduction is for a discernible purpose (Re Chong Hing Bank at §68).

52.  Each of the above requirements is satisfied: 

(1)  A technical reduction which is integral to a scheme satisfies the above criteria (Re Chong Hing Bank at §69).

(2)  At the General Meeting, 97.30% of members present voted in favour of the special resolution approving the Capital Reduction.

(3)  The shareholders were treated equitably; they were provided with detailed explanations about the Capital Reduction in the Scheme Document. Scheme Shareholders will each receive the same Scheme Consideration for each Scheme Share being cancelled.

(4)  Creditors’ interests will not be prejudiced. The Capital Reduction only exists for a brief moment and will be restored to the same level upon the Company issuing the same number of new shares cancelled to HSBC Asia Pacific (or its nominee).

(5)  There is a discernible purpose for the Capital Reduction since it is an integral part of the Scheme.

53.  For all the above reasons, the court makes an order sanctioning the Scheme and confirming the Capital Reduction, and directs the Company to produce the order to the Registrar of Companies together with the Minute and a return that complies with s.230(3) of the CO within 7 days of the order.