RE TAI WAH SECURITIES LTD

HCCW 872/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 872 OF 2003

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J U D G M E N T

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1. This is a petition presented by Hong Kong Securities Clearing Company Limited against Tai Wah Securities Limited ("the Company"), upon a debt of $2,300,846.19 due to the petitioner under a broker participation agreement dated 4 December 1997. A demand for $2,361,352.61 being the debt then outstanding was served on the Company on 17 May 2003. On 31 July 2003, the Company paid $100,000.00 to the petitioner in part payment. It is not in dispute that the debt in the petition is due and owing to the petitioner.

2. The Company appearing by Miss Liu today seeks a two-month adjournment. The ground for seeking the adjournment is that since 9 April 2003, the Company has an account receivable in the sum of $5,679,433.93 owing from a client one Madam Xu Li. Since April 2003, the Company has issued letters to Madam Xu demanding payment. Madam Xu was not located by the Company until mid September 2003 and she has made an oral assurance to the Company that her debt of $5.6 million odd would be repaid before mid November 2003.

3. According to the affirmation of the Company, its business has been suspended since 4 April 2003 and it is alleged that its cash flow problem is temporary and caused by the default of one single client being Madam Xu.

4. On the available evidence, there is nothing to suggest to this court that there are reasonable grounds for believing that the debt owed to the Company would be repaid before mid November 2003 as allegedly promised.

5. As there is no dispute about the petitioning debt and no reasonable prospects of repayment of this debt within a short time, I refuse the application for the adjournment. I make a winding-up order against the Company and order that the petitioner's costs are to be paid out of the Company's assets.