BOILL HEALTHCARE HOLDINGS LTD v. THE STOCK EXCHANGE OF HONG KONG LTD

HCAL 1021/2026

[2026] HKCFI 3827

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 1021 OF 2026

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REASONS FOR DECISION

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A.  Introduction

1.  By its Form 86 dated 3 June 2026, the Applicant (“Company”) sought leave to apply for judicial review so as to challenge the 12 May 2026 decision (“LRC Decision”) of the Listing Review Committee (“LRC”) of the Putative Respondent, The Stock Exchange of Hong Kong Ltd (“Exchange”), upholding the earlier decision (“LC Decision”) made by the Listing Committee to cancel the listing of the Company.

2.  I gave directions for an oral hearing of the application for leave to apply for judicial review, fixed for 2 July 2026.

3.  At that hearing, the Company was represented by Mr Hectar Pun SC, leading Mr Anson Wong Yu Yat and Mr David Chan of Counsel. The Exchange was represented by Mr Victor Dawes SC, leading Mr Geoffrey Yeung of Counsel.

4.  At the end of the hearing, I dismissed the application, with costs to the Exchange to be summarily assessed, for reasons to be given subsequently.

5.  These are my Reasons for Decision.

B.  Background

6.  The Company was first listed on the Main Board of the Exchange on 16 October 2013. It has been known by its current name since 12 September 2017. Before the events giving rise to these proceedings, the Company was primarily engaged in (1) the development of two property projects, one residential and one industrial, and (2) the sale of construction materials (“Property Development Business”).

7.  Between 22 and 24 July 2024, a number of conflicting announcements on the composition of the Company’s Board of directors were published. The conflict lay in whether the Board was composed of members led by Mr Qiu Dongfang (the original single largest beneficial holder of the Company’s shares) or members led by Mr He Yu, to whom Mr Qiu pledged shares as security for a loan. As a result, the trading of shares in the Company was suspended on 25 July 2024.

8.  The Company’s access to the Exchange’s e-Submission system (“ESS”) was also suspended, pending resolution of the conflict as to who actually comprised the members of the Board with authority to act for the Company.

9.  Following the trading suspension, albeit not all at once, the Listing Division imposed certain conditions (“Resumption Guidance”) which had to be met by the end of the 18-month ‘remedial period’ on 24 January 2026, before the Company could resume trading. The Resumption Guidance was:

(1)  RG1: Demonstrate, with appropriate evidence and to the Exchange’s satisfaction, the correct identities of the individuals who make up the Board.

(2)  RG2: Publish all outstanding financial results and address any orbit modifications.

(3)  RG3: Demonstrate the Company’s compliance with Rule 13.24.

(4)  RG4: Conduct an independent forensic investigation (“Investigation”) into the matters relating to certain unauthorised guarantees, loans, and disposals (“Unauthorised Transactions”), assess the impact on the Company’s business operation and financial position, announce the findings and take appropriate remedial actions.

(5)  RG5: Demonstrate that there is no reasonable regulatory concern about the integrity, competence and/or character of the Group’s management and/or any person with substantial influence over the Company’s management and operations, which may pose a risk to investors and damage market confidence.

(6)  RG6: Conduct an independent internal control review (“IC Review”) and demonstrate that the Company has in place adequate internal controls and procedures to comply with the Rules.

(7)  RG7: Re-comply with Rule 3.28 (appointment of Company Secretary).

(8)  RG8: Inform the market of all material information for the Company’s shareholders and investors to appraise the Company’s position.

10.  As to RG1, Mr Qiu and Mr He subsequently reached agreement on the composition of the Board, where the members of the Qiu camp were removed and replaced with members of the He camp. Through a process involving board resolutions and various legal opinions, the Company eventually satisfied the Exchange as to the correct identities of the individuals comprising the Board. This led to the Company’s access to the ESS being re-instated on 13 January 2026.

11.  It can be noted at this point that the suspension of the Company’s ESS access only 11 days before the expiry of the remedial period has formed a substantial part of the Company’s grievance in its dealings with the Listing Committee, the LRC and now in these proceedings. I have been taken through the chronology of correspondence during the period of ESS suspension, and I think it is fair to say – and Mr Pun agreed that it might be put neutrally – that there was some sharing of responsibility between the Company and the Exchange for the time taken between 28 January 2025, when the Exchange requested the Company to submit a legal opinion confirming the validity of certain appointments of directors and as authorised persons for the purpose of the ESS, and the restoration of access to the ESS on 13 January 2026. However, in the context of an argument that matters occurred outside its control, it is important not to lose sight of the period of 5 months which the Company itself took to provide a supplemental legal opinion on the validity of the Board.

12.  As to RG2, on 25 January 2026, the Company published its annual results for the financial year (“FY”) 2025, and its interim results for the half year (“HY”) 2025 and 2026. Those results showed:

(1)  Property Development – As noted, the Company had previously been primarily engaged in the Property Development Business. The residential project was substantially completed and sold between FY 2022 and FY 2024. The remaining industrial project was fully pledged to secure a bank loan, which was in default. The Company does not intend to pursue new property development projects in the foreseeable future. As for the sale of construction materials, the Company recorded revenue from this activity in FY 2023 (HK$178.6 million), FY 2025 (HK$33.5 million), and HY 2026 (HK$14.4 million).

(2)  Restaurant and healthcare holiday resort development – During FY 2016, the Company acquired a restaurant in Hong Kong and commenced a provision of catering services business. The restaurant was disposed of in FY 2018. During FY 2017, the Company ventured into the healthcare holiday resort development industry via the acquisition of the property in Shanghai, which was intended to be developed as a healthcare holiday resort. The Company disposed of its resort assets and discontinued the healthcare holiday resort development segment in FY 2023.

(3)  Healthcare and Leisure Business – During HY 2026, the Company commenced the sale of the food products (as mentioned below). The Company referred to this as a re-entry into the healthcare and leisure-related business, which was commenced during FY 2017 with the strategic expansion from traditional real estate into the healthcare and leisure sector and the development of the healthcare holiday resort.

13.  As to RG3, the Company points to the facts – notably, mostly after the expiry of the remedial period – that:

(1)  It executed an agreement on 25 March 2026 to dispose of four property development subsidiaries for a consideration of RMB 2 million, when out of the Company’s Group’s borrowings amounting to HK$851 million as at 30 September 2025, HK$847 million were attributable to those subsidiaries.

(2)  During HY 2026, it commenced the sale of various food products, such as herbal tea, grain-based drinks, huangjiu, and bioactive food ingredients, generating interim revenue of HK$37.2 million.

(3)  It proposed a two-for-one rights issue to raise HK$40 million, supported by irrevocable undertakings from the six new shareholders who invested in March 2026 (“New Investors”) (see below).

14.  As to RG4 and RG6, on 25 January 2026, the Company published the key findings of its Investigation and IC Review. According to the Company’s announcement:

(1)  The Unauthorised Transactions involved unauthorised guarantees, questionable loan arrangements, and serious breaches of the Listing Rules, which were conducted during Mr Qiu’s tenure and involved his failure to discharge his fiduciary duties, and where several former senior executives and finance or legal staff of the Company were also involved.

(2)  Deficiencies in the Company’s internal control procedures were identified, including the lack of independent written internal control management policies and an internal approval system, lack of monitoring of lending and guarantee transactions initiated by Mr Qiu as the Company’s substantial shareholder, deficiency in the seal management system, and a lack of awareness of Listing Rules compliance.

15.  As to RG7, the Company announced on 16 January 2026 that it had appointed a company secretary with effect from 30 December 2024.

16.  On 13 February 2026, the Listing Committee of the Exchange decided to cancel the listing of the Company under Rule 6.01A(1) of the Listing Rules, i.e. the LC Decision. It did so as it considered that the Company had not demonstrated compliance with RG3, RG4, RG5, RG6 and RG8. The Listing Committee did not take issue on RG1, RG2 and RG7.

17.  The Company applied to the LRC for a review of the LC Decision.

18.  Prior to the hearing before the LRC, the Company announced on 5 and 30 March 2026 a number of changes to the Board, including the resignation of the members of Mr He’s camp, and the appointment of Mr Zhou Wenjie as Executive Director and Chairman of the Court, Mr Yu Sicheng as an Executive Director and the Chief Executive Officer, and Mr Chen Wei as an Executive Director.

19.  On 12 March 2026, the Company announced a change of substantial shareholders, in that Mr Qiu had (through companies controlled by him) disposed of 708,800,000 shares in the Company (approximately 52.19% of the issued shares) to a Mr Shum Wan Wah Walter and five other independent investors, i.e. the New Investors. The announcement provided that Mr He ceased to have any security interest in the shares charged to him by Mr Qiu.

20.  The LRC hearing was held on 14 April 2026. At the hearing, the Company submitted that it had fulfilled all Resumption Guidance and requested the LRC to overturn the LC Decision. Alternatively, the Applicant requested that the matter be remitted to the Listing Committee for reconsideration, or for an extension of the remedial period to 30 June 2026, if the LRC were to consider that publication of the audited annual results for the year ended 31 March 2026 would further demonstrate compliance or if any particular Resumption Guidance were to remain outstanding.

C.  The LRC Decision

21.  By letter and reasoned decision dated 12 May 2026, the LRC informed the Company that the LRC decided to uphold the LC Decision to cancel the listing of the Company, i.e. the LRC Decision. The LRC did consider the updated information and materials provided. However, the LRC considered that the Company had failed to fulfil all of the Resumption Guidance as at the time of the hearing, in particular RG3, RG4, RG5, and RG6. The LRC did not take issue with RG1, RG2 and RG7, and noted that compliance with RG8 could only be assessed after compliance with all of the other Resumption Guidance. Further, the LRC did not think there were exceptional circumstances for it to extend the remedial period.

22.  On its way to reaching those decisions, the LRC noted and rehearsed in summary the Company’s submissions to it. Amongst the submissions was the fact that the Company’s ESS access had been suspended for over 17 months, which was said to have prevented the Company from communicating updates to the market or keeping shareholders informed, making it practically impossible to demonstrate fulfilment of the Resumption Guidance. Restoration of access to ESS only 11 days before the end of the remedial period left no meaningful opportunity for dialogue before the listing was recommended by the Listing Division. The Company submitted that the circumstances were highly exceptional and warranted an extension of the remedial period. Submissions were also made as to the healthcare and leisure business, and the disposal of property development subsidiaries and the proposed rights issue. Further, the Company submitted how it said it had complied with RG3, RG4, RG5 and RG6.

23.  The LRC also noted the submissions made by the Listing Division, which need not be rehearsed here.

24.  In detail, the LRC set out its views and conclusions as follows:

27. The Listing Review Committee noted that trading in the Company’s shares had not resumed by the resumption deadline of 24 January 2026, or at the time of the hearing. The listing of the Company’s shares could therefore be cancelled under Rule 6.01A(1).

28. Firstly, having taken into account the submissions from the Company and the Listing Division, including the Company’s updates on the status of its compliance with the Resumption Guidance, the Listing Review Committee considered that the Company had failed to fulfil all of the Resumption Guidance as at the time of the hearing.

29. In reaching its decision, the Listing Review Committee considered the following points:

(a) On RG3 –

(i) The Listing Review Committee noted that the Company was basically only operating the Healthcare and Leisure Business going forward, and agreed with the Listing Division’s view that this was clearly not an extension of the previous restaurant and healthcare holiday resort development business. Despite the Company’s attempt to categorise its new food distribution activities as “healthcare and leisure”, it is apparent that the nature of the new business is completely different to the restaurant and the healthcare holiday resort previously operated by the Company. The Listing Review Committee considered that the current Healthcare and Leisure Business lacked sufficient track record to demonstrate its viability and sustainability.

(ii) On assets, the Listing Review Committee noted that the Company was in severe financial difficulty. The Listing Review Committee considered that the proposed disposal of the property development subsidiaries and the rights issue, with the intention of improving the Company’s financial situation, were preliminary, and subject to approvals from shareholders and/or the Exchange.

(iii) The Listing Review Committee concluded that the Company failed to demonstrate that it maintained a business with a sufficient level of operations and assets of sufficient value to support its operations to warrant the continued listing of its securities.

(b) On RG4 and RG5, the Company was unable to satisfy the Listing Review Committee during the hearing on the validity of the share transfers from Mr Qiu and/or Mr He to the six new investors. The Listing Review Committee considered that the question of potential influence by Mr Qiu had not been resolved, nor had the Company taken appropriate remedial action to address the Investigation findings. The Listing Review Committee concluded that the Company had failed to demonstrate compliance with RG4 and RG5.

(c) As for RG6, the Listing Review Committee accepted the Listing Division’s submission that IC Review report was unable to address all the deficiencies previously raised by the Listing Division. RG6 was therefore not met.

(d) For the sake of completeness, the Listing Review Committee did not take issue with RG1, RG2 and RG7. RG8 can only be assessed after compliance with all the remaining Resumption Guidance.

30. Secondly, given the Listing Review Committee’s conclusion that compliance with the Resumption Guidance remains outstanding, the Listing Review Committee considered the Company’s request for an extension of the remedial period to 30 June 2026.

31. Under paragraph 22 of GL95-18, the remedial period may only be extended in exceptional circumstances. The Listing Review Committee therefore had to assess whether the Company’s circumstances allowed for an extension of the remedial period under paragraphs 22 or 23 of GL95-18.

32. The Listing Review Committee considered that there were no exceptional circumstances within the purview of paragraphs 22 and 23 of GL95-18 for it to extend the remedial period. In reaching its decision, the Listing Review Committee considered the following points:

(a) The Company has not shown that it has substantially implemented the steps that, with sufficient certainty, would lead to a resumption of trading, nor has it demonstrated that it was unable to meet its planned timeframe and required a short extension of time to finalise matters due to factors outside its control.

(b) The Listing Review Committee did not agree that the suspension of the Company’s access to ESS was highly exceptional and warranted an extension of the remedial period. The Listing Review Committee noted that the majority of the Resumption Guidance was unrelated to ESS access, including the Resumption Guidance on clarification of Board composition, compliance with Rule 13.24, and concluding an Investigation and an IC Review. The Listing Review Committee also noted that the Company had taken a long time to resolve the issue of Board composition.

(c) The remaining steps to fulfil the Resumption Guidance are more than procedural in nature, including addressing management integrity concerns and demonstrating compliance with Rule 13.24. The Company failed to demonstrate that it had taken adequate and prompt steps throughout the remedial period to achieve compliance with the Resumption Guidance, or that full compliance could be achieved with sufficient certainty even if an extension was granted.

33. In the circumstances, the Listing Review Committee concluded that the Company had, as at the time of the hearing, neither complied with all the Resumption Guidance, nor identified sufficient grounds based on which the remedial period could be extended, under the relevant paragraphs of GL95-18.

34. Finally, the Listing Review Committee considered that there were no reasons for it to remit the matter back to the Listing Committee for reconsideration as requested by the Company.

25.  Hence the LRC Decision, to uphold the Listing Committee’s decision to cancel the Company’s listing under Rule 6.01A(1).

D.  Intended Grounds of Review

26.  In summary, the Company sought to advance three intended grounds of review, being:

(1)  Ground 1: The LRC’s finding that there are no “exceptional circumstances” warranting an extension of the remedial period is irrational in the public law sense.

(2)  Ground 2: The LRC’s finding that the Company was unable to satisfy it during the hearing on the validity of the share transfers from Mr Qiu and/or Mr He to the six independent shareholders is in breach of its Tameside duty.

(3)  Ground 3: The LRC’s finding that the question of potential influence by Mr Qiu had not been resolved is irrational in the public law sense.

27.  As submitted by Mr Dawes, it bears emphasis to recognise that – save in the rather oblique way touched on below – the Company does not challenge the LRC’s findings on RG3, namely on compliance with Rule 13.24. That rule relates to the requirement for the issuer to carry out, directly or indirectly, a business with a sufficient level of operations and assets of sufficient value to support its operations to warrant the continued listing of its securities. The LRC found that the Company failed to demonstrate that it maintained such a business.

28.  Nor does the Company directly challenge the LRC’s findings on RG6, relating to the IC Review. The LRC accepted the Listing Division’s submissions that the Company’s IC Review Report was unable to address the deficiencies previously raised by the Listing Division.

E.  Ground 1

29.  This is a Wednesbury unreasonableness or irrationality challenge, where it is settled law that the hurdle is high. That hurdle is sometimes described as requiring the decision to be shown to be so unreasonable that no reasonable authority could ever have come to it. But a simpler formulation of the test is simply whether the decision is outside the range of reasonable decisions open to the decision-maker.

30.  Another aspect of irrationality – though merely another way of applying the same overarching test – may look at the process by which the impugned decision was reached, to see whether there was significant reliance placed on an irrelevant consideration, or whether there was an unexplained evidential gap or leap in the reasoning which fails to justify the conclusion, or whether the reasoning involved a serious logical or methodological error.

31.  Heavy reliance was put by Mr Pun on the Guidance Letter HKEX-GL95-18 (“Guidance Letter”), which relates to guidance on long suspension and delisting. He urged the Court to keep firmly in mind the rationale for the 18-month remedial period and any extension for it. This I have done, in line with what I have also said in previous decisions such as Cai Zhenrong v The Stock Exchange of Hong Kong Ltd [2023] HKCFI 1899 at §127, Titan Petrochemicals Group Ltd v The Stock Exchange of Hong Kong Ltd [2023] HKCFI 2935 at §§12-13 and §§78-79, and China Wood Optimization (Holdings) Ltd v The Stock Exchange of Hong Kong Ltd [2023] HKCFI 1000 at §§87-91.

32.  In short, the remedial period is to give issuers a clear deadline, incentivizing them to develop a viable action plan to ensure remedying of the relevant issues to the Exchange’s satisfaction, to permit resumed trading before the end of the prescribed period – so giving the issuer a reasonable opportunity to take remedial action with the view of resuming trading. There is no entitlement to an extension of time merely because the issuer is able to demonstrate it is likely to fulfil the resumption guidance at some point in the future, after the deadline. Instead, an extension of the remedial period will only be granted in “exceptional circumstances”. Extension of the remedial period may be granted where an issuer has substantially implemented the steps that, it has shown with sufficient certainty, will lead to resumption but, due to factors outside its control, it becomes unable to meet its planned timeframe and requires a short extension of time to finalize the matters. The Exchange will also consider whether adequate and prompt steps have been taken throughout the remedial period to achieve compliance with the resumption guidance. Whilst “exceptional circumstances” are not limited to those expressly mentioned in §22 of the Guidance Letter, and may include those where a failure substantially to implement remedial steps was caused by matters outside the issuer’s control, it is incorrect to think that whenever an issuer’s ability to take remedial steps is inhibited by matters out of its control it must amount to “exceptional circumstances”. Further, what amounts to “exceptional circumstances” is a matter for the Exchange, and not for the Court to decide. The Court’s role is restricted to seeing if the Exchange’s decision is impugnable on the ground of irrationality.

33.  Mr Pun submitted that the prolonged suspension of the Company’s access to the ESS had a material adverse effect on the Company. He repeated and again relied on the submissions made before the LRC as to what those adverse effects were, namely:

(i)  Inability to publish announcements and financial reports – The Company was unable to publish any announcements and financial reports, including quarterly updates on its progress, financial results, or material developments, despite of (sic) its readiness to do so. This meant that even though the Company was making progress on the Resumption Guidance behind the scenes, it could not demonstrate this progress to the market or the Stock Exchange;

(ii)  Delayed communication with the Stock Exchange – The Company could not effectively communicate with the Listing Division or respond to enquiries through publications of announcements or financial reports via the formal ESS channel, leaving it in a state of uncertainty regarding the status of its resumption efforts and whether its planned actions would be sufficient to meet the Presumption Guidance;

(iii)  Impact on business operations – The underlying cause of the suspension was a Shareholder and Board dispute. Although a new Board was appointed in December 2024 to resolve the matter and take the Company forward, the Listing Division required a legal opinion to confirm the validity of the new board composition and appeared to devote much of its attention to scrutinising the scope of the legal opinion prepared by Conyers, the Company’s legal adviser, in relation to the shareholders’ dispute. Due to the suspension of ESS access, the Company was unable to publish the necessary announcements to confirm the new Board’s validity until ESS rights were restored on 13 January 2026. This prolonged period of uncertainty and inability to communicate materially delayed the new Board’s ability to effectively manage the Group, implement its strategic vision, and progress its business operations during the suspension period;

(iv)  Compressed timeline for compliance – Upon restoration of ESS access, the Company had only 11 days to publish all outstanding financial results (including interim results for two periods and annual results for two years), findings of the Forensic Investigation, the IC Review results, and all other required announcements.

34.  Mr Pun submitted the inability to access the ESS for such a large part of the remedial period was rare and exceptional, and was out of its control because of the time taken in correspondence and the seeking and provision of legal opinions (see above). Its effects, he submitted, included that it caused practical impossibility for the new Board to make progress in corporate governance or business operations (especially with regard to RG3, which concerned compliance with Listing Rule 13.24). Further, by the time access to ESS was restored, there remained only 11 days of the remedial period, so that it would be unfair to require Company to have substantially implemented the steps that, with sufficient certainty, would lead to a resumption of trading, yet that was the LRC’s finding.

35.  However, I accepted Mr Dawes’ submission that the LRC Decision cannot be said to be reasonably arguably Wednesbury unreasonable. There was force in his submission that the submissions made to the LRC (as quoted above) were generic, unsubstantiated and far-fetched in logic. Indeed, the LRC addressed the Company’s submissions made but, as the LRC held – in a way which I do not think can be challenged as unreasonable or irrational in the public law sense – the majority of the Resumption Guidance was unrelated to ESS access, including guidance on clarification of the composition of the Board, compliance with Rule 13.24, and conducting the Investigation and IC Review.

36.  In addition, the focus on whether the suspension from ESS access was rare or exceptional is misconceived for the additional reason that the assessment of whether to grant any extension also looks forward to what it is said would be achieved in any extended period. This point was specifically canvassed by the LRC at the hearing, but the Company was unable to offer anything of substance that it might actually achieve in the requested extended period (no doubt in part because the Company’s primary stance was that it had actually already complied with the Resumption Guidance). I do not think it is reasonably arguable to suggest that it was irrational for the LRC to consider the outstanding matters to be more than procedural in nature, where the outstanding Resumption Guidance was wide-ranging and substantial – including perhaps in particular the failure to show a viable and sustainable business under Rule 13.24.

37.  Ground 1 is not reasonably arguable with any realistic prospect of success.

F.  Ground 2

38.  During the hearing before it, members of the LRC canvassed the issue of the validity of the share transfers from Mr Qiu and/or Mr He to the New Investors. In his submissions, Mr Pun focused on that aspect for his argument on Ground 2.

39.  Mr Pun submitted that the LRC failed to take reasonable steps to acquaint itself with the relevant information to enable it properly to form a view on the validity of the share transfers. This was because, he said, (1) the issue was material to whether there had been compliance with RG4 and RG5, and (2) the Company’s representatives stated that they were ready (a) to inspect the Company’s share registry to verify the transfers and seek documents about them, (b) to obtain a legal opinion of the validity of the transfers, if required, and (c) to conduct a shareholders search. In those circumstances, Mr Pun argued, no reasonable decision-maker would have gone on to make the decision without taking the steps to obtain that information or permit the Company to supply it.

40.  I have already pointed out that the Tameside duty is but one facet of Wednesbury reasonableness, and the hurdle is high. In this case, the challenge is a non-starter. Though Mr Pun has (again) narrowed his focus, the issue on the transfer of shares to the New Investors was of wider range, and comprised manifold aspects. The narrow point as to formal validity of the share transfers was but a part of the potential problems with RG4 and RG5.

41.  As Mr Dawes submitted, the background included the share pledge, the unsettled loan, and the disputes about the defect on the pledge, yet Mr Qiu and/or Mr He were said to have somehow found six new investors who would take up the shares, just before the LRC hearing (and well after the expiry of the remedial period). The circumstances were already suspicious, and there were additional circumstances including the sudden change in directors without a clear account of the facts, the cessation of the original Property Development Business, and the start of a new business without proven track record. Hence, it seemed to me that it is not reasonably arguable to suggest that the dealings overall did not call into question at least (a) whether the new directors were genuinely rescuing the Company and operating the business, (b) whether the share transfers were valid, (c) and whether there were any side arrangements. It was for the LRC to weigh these matters. It is clear that the LRC considered the bigger picture – not the “micro” one, as put by one member of the LRC – and it was plainly entitled to reach its conclusion.

42.  Ground 2 is not reasonably arguable with any realistic prospect of success.

G.  Ground 3

43.  This ground sought to challenge the LRC’s finding that the question of potential influence by Mr Qiu had not been resolved. Mr Pun submitted that was an irrational finding, because (1) the LRC did not identify an evidential basis to form that view, (2) according to two background statements on the transfers of shares to the New Investors, Mr Qiu was not involved in the transfers, which were instead arranged by Mr He on his understanding that the sale was to enforce the pledge of the shares to him, (3) the matters noted by the Exchange about the similarities of the transfers of four of the six New Investors, even taken at their highest, do not suggest Mr Qiu was in any manner associated with the six New Investors or that he could by any means influence them.

44.  The matters noted about the share transfers to four of the six are worth noting. They all (a) executed the transfer on 12 March 2026, (b) each acquiring 100 million shares, (c) settled by cash, (d) at the same average consideration of HK$0.0168 per share, and (e) where all six New Investors provided irrevocable undertakings to participate in the proposed rights issue.

45.  This intended challenge is put as an irrationality challenge, but it is essentially a ‘merits’ challenge, extending an invitation to the Court to reach a different conclusion on the evidence. Hence, again it can be noted that the weighing exercise was a matter for the LRC, deploying its combined experience and expertise. The transcript of the hearing demonstrates that the LRC addressed the matter at the hearing, and it explained its approach in the LRC Decision. As pointed out by Mr Dawes in his submission, it is noteworthy (for example) that the Company was not able to say that the six New Investors were independent of Mr Qiu, saying only that they were independent of each other (which also seems to me to be reasonably in doubt).

46.  Ground 3 is not reasonably arguable with any realistic prospect of success.

H.  Materiality

47.  Though academic in light of my above conclusions, I note that the Exchange also opposed the Company’s application for leave to apply for judicial review on the ground that the intended challenges were not material to the LRC Decision.

48.  Mr Dawes submitted that Grounds 2 and 3 leave untouched the LRC’s findings on the Company’s non-fulfilment of RG3, RG6 and RG8. Nor, he said, is Ground 1 relevant to RG3 and RG6, where the Company cannot show it could resolve the Resumption Guidance even within its proposed extension of time. Hence, Mr Dawes submitted that it would be inevitable that the LRC would have made the same decision to cancel the listing of the Company on the basis of multiple failures to fulfil the Resumption Guidance.

49.  As reminded by Mr Pun, I accept that the Court will not likely reach the conclusion that the outcome would inevitably be the same, having regard to the fact that the decision-maker, in rehearing, is required to approach the matter with an open mind. Therefore, Mr Pun submitted, it is not inevitable that the LRC would come to the same conclusion based on whatever are the latest materials available as and when the matter comes before it for reconsideration.

50.  However, it seemed to me that the materiality point taken on behalf at the Exchange is a good one. The argument is different from that which might be regarded as more typical, when it is said that the decision-maker will inevitably reach the same conclusion. In this case, the point is that even if there was any merit in the intended grounds of review, the Company would still face what seem to be insurmountable hurdles as regards either having already complied with all of the Resumption Guidance (its primary case) or achieving compliance with all of the Resumption Guidance in a short extension to the remedial period (its alternative case).

51.  Were it necessary to have done so, I would have dismissed the application on this ground too.

I.  Result

52.  The Company has failed to identify any grounds of judicial review which are reasonably arguable with any realistic prospect of success. Therefore, and for the reasons given above, I dismissed the application for leave to apply for judicial review.

J.  Costs

53.  As to costs, Mr Dawes sought an order for costs to the Exchange with the certificate for two Counsel, to be summarily assessed. However, for the Company, Mr Wong argued that the ordinary applicable principles should lead to there being no order as to costs.

54.  Mr Wong relied upon the principles set out by the Court of Final Appeal’s decision in Leung Kwok Hung v President of the Legislative Council (No 2) (2014) 17 HKCFAR 841 at §17(1)-(5). Insofar as material for present purposes, those principles include the following:

(1)  Costs lie in the discretion of the Court which must retain the flexibility to make or refuse to make an award of costs as the particular circumstances of the case and justice warrant.

(2)  Since applications for leave to apply for judicial review are, by the rules themselves, meant to proceed on an ex parte basis, the general rule should be that an unsuccessful applicant will not be ordered to pay the costs of a putative respondent or putative interested party unless there are special or unusual circumstances which justify such an award.

(3)  Good reason will therefore be required in order for the Court to make an order in relation to these costs against an applicant, and that discretion should be sparingly exercised.

(4)  There is no definitive list of reasons that may justify an award of costs against an applicant and in favour of a putative respondent, because the discretion as to costs is broad.

(5)  All facts and circumstances may be relevant and should be taken into account in the exercise of the discretion.

(6)  Amongst the matters which (non-exhaustively) might be taken into account will be the reason that has led the opposing party to attend at the hearing, whether that party’s attendance has been of material benefit to the Court in determining the leave application, and the underlying lack of merits of the application, always bearing in mind that the context is the end result that the Court has refused to grant leave to apply for judicial review.

(7)  By way of example of these considerations: (a) if the putative respondent or putative interested party has attended at the invitation of the Court, the reason why the Court has considered that party’s presence necessary will be relevant; (b) if the opposing party’s presence at the hearing may have been necessary because of an application for interim relief; (c) if an application was thoroughly ill-conceived or unmeritorious, this may be a weighty factor justifying an adverse costs order; (d) similarly, if it was so frivolous or vexatious, or motivated for a tactical purpose indicating bad faith.

(8)  Also, where, as a result of the attendance of an opposing party, the hearing has proceeded with full argument and documentary evidence so that the applicant has, in effect, had a full substantive hearing of the judicial review challenge, this may be sufficient to persuade the court to make a costs order as if the matter had proceeded at a full inter partes hearing.

(9)  These considerations may or may not justify a costs order in favour of a putative respondent, and it is important to stress that the ultimate decision remains in the discretion of the Judge.

55.  I apply those principles. Whilst I recognise that this application was made ex parte, the Company made the express request that there be an oral hearing if the Court were not minded to grant leave on the papers alone. Not least in light of the slew of previous decisions made by this Court, I do not think it could have come as a surprise that the Court would (and did) invite or permit the Exchange to attend that oral hearing, to provide assistance to the Court. Such assistance was in fact provided through the submissions made by Mr Dawes. Indeed, on the grounds advanced by it, the Company has in effect had the benefit of argument approaching or almost equivalent to a full hearing.

56.  I also think it would be inappropriate for a listed issuer to proceed on the basis that it can seek leave to apply for judicial review of a decision of the LRC to cancel its listing, without facing potential cost consequences. This is not least when the Exchange is likely to consider – with or without the Court’s invitation – that it is appropriate in support and furtherance of its regulatory duties to attend any oral hearing fixed.

57.  I also took into account that the merits of this application seemed to me to be weak. Indeed, I have found the intended grounds of review to be not reasonably arguable. I do not accept Mr Wong’s submission that because the Exchange was arguing that none of the intended grounds advanced by the Company were arguable, the Exchange did not need to attend the hearing and/or its costs incurred in doing so should not be payable by the Company.

58.  To the contrary, if a listed issuer chooses to advance what are plainly weak grounds of review in an attempt to challenge a decision of a decision-maker appointed because of its relevant experience and expertise, the listed issuer can look forward to the Court marking that choice by making an adverse costs order.

59.  For those reasons, and in the exercise of my discretion, I ordered the Exchange’s costs to be payable by the Company, with certificate for two Counsel, to be summarily assessed in accordance with a timetable set by me.