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HCMP 806/2022 and HCMP 1022/2023
(HEARD TOGETHER)
[2023] HKCFI 2325
HCMP 806/2022
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
MISCELLANEOUS PROCEEDINGS NO 806 OF 2022
____________________
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IN THE MATTER OF Sino-I Technology Limited (中國數碼信息有限公司) (stock code: 0250) |
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and |
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IN THE MATTER OF Sections 429, 431 and 610 of the Companies Ordinance (Cap 622) |
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and |
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IN THE MATTER OF Order 102, rule 2 of the Rules of the High Court (Cap 4A) |
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BETWEEN
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LAM BING KWAN (林秉軍) |
Plaintiff |
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and |
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SINO-I TECHNOLOGY LIMITED |
Defendant |
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(中國數碼信息有限公司) |
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IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
MISCELLANEOUS PROCEEDINGS NO 1022 OF 2023
____________________
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IN THE MATTER OF Sino-I Technology Limited (中國數碼信息有限公司) (stock code: 0250) |
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and |
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IN THE MATTER OF Sections 429, 431 and 610 of the Companies Ordinance (Cap 622) |
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and |
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IN THE MATTER OF Order 102, rule 2 of the Rules of the High Court (Cap 4A) |
____________________
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BETWEEN
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LAM BING KWAN (林秉軍) |
Plaintiff |
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and |
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SINO-I TECHNOLOGY LIMITED |
Defendant |
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(中國數碼信息有限公司) |
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____________________
(HEARD TOGETHER)
| Before: |
Hon Harris J in Chambers |
| Date of Hearing: |
31 August 2023 |
| Date of Decision: |
31 August 2023 |
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D E C I S I O N
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1. I have summonses before me in two sets of proceedings commenced by the Defendant Company which is seeking an extension of time for the dates by which it must lay before the Company in general meeting audited financial statements. They relate to the financial years ending 31 December 2022 and 2023.
2. The reasons why the applications have been necessary are complicated but I do not think I need to explain in detail what has taken place. It would suffice to say this. The Company is an intermediate holding company of Nan Hai Corporation Limited which is not incorporated in Hong Kong but is listed on Hong Kong Stock Exchange (stock code: 680).
3. The Company’s auditors have taken the position that they cannot complete the audit of the Company’s financial statements for the relevant years until certain concerns they have about the appraisal of the value of security provided by the Nan Hai Group to the Company and its subsidiaries has been satisfactorily completed.
4. What makes this case anomalous is that because Nan Hai is not incorporated in Hong Kong, it is not subject to the relevant sections of the Companies Ordinance (“Ordinance”). The Company has found itself in the position, of being unable to complete its audit for reasons which it would appear its board genuinely has no control over. Of course, if Nan Hai itself was incorporated in Hong Kong then the live issue would probably be whether or not it should be entitled to an extension of time for putting its audited financial statements before its members.
5. I have already granted two extensions of time to the Defendant. Clearly it is not satisfactory that the Company continue to be unable to comply with its statutory obligations but I accept that: (1) the board of the Company genuinely is unable itself to address the problems that are preventing the audit being completed; (2) that it has taken steps to ensure that its members are fully cognisant of the financial state of the Company and the reasons why the audit cannot be completed.
6. In the circumstances I will, therefore, grant further extensions of time for compliance with section 431 of the Ordinance until the 28 February 2024. There be no order as to costs.
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(Jonathan Harris)
Judge of the Court of First Instance
High Court
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Mr Brian Lee, instructed by Ho Tse Wai & Partners, for the plaintiff (in both actions)
The defendant was not represented and did not appear (in both actions)
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