XCHRX RE PEGASUS (CHINA) LTD.

HCCW 847/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS

CWU NO. 847 OF 1999

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D E C I S I O N

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1. This is an application by the company for validation under S.182 and also for an injunction restraining the Petitioner from advertising the Petition until 8th December 1999 being the date of hearing of the said petition.

2. In relation to the application for validation, there is some evidence before me that the company is in a sufficiently healthy financial state. The 1997 audited accounts show a good profit for a small company and the 1998 audited accounts (although qualified) do not appear to show a company which is insolvent. There is also some evidence of the manner in which this company's business is transacted:- there is a list showing the suppliers and the customers and it would appear that a good profit is made by this company on each of those transactions. The bank account of the company shows a good credit balance.

3. Accordingly, there is in my view, sufficient evidence that the company is solvent and therefore I would in the exercise of the normal principles grant a validation order in terms of paragraph 1 of the summons.

4. In relation to the application for an injunction to restrain the advertising of this Petition, I accept Miss Chan's point that the body of the Petition seems to lean towards a S.168A order. However, I do note that the prayer seeks an order to wind-up. It is inappropriate for me at the moment to consider the likely outcome of this Petition, given that Miss Chan has fairly admitted that she cannot make out a strong case of abuse.

5. Accordingly, I would not grant an order in relation to the application for an injunction.