RE DESCARTES INVESTMENT MANAGEMENT LTD

HCCW 73/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 73 OF 2009

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J U D G M E N T

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1.  This petition was presented by Madam Yen Ling Ning to wind up Descartes Investment Management Limited (“the Company”).

2.  The Company was incorporated in the Cayman Islands in May 2003 with a principal place of business in Hong Kong.  The sole shareholder is Descartes Finance Limited (“DFL”).  The Company, DFL, Descartes Global Asset Management Limited (“DGAM”) and Descartes Athena Fund SPC (“the Fund”) are all controlled by Chuan Wei Chen and Ms Yeh Fang Ching. DGAM is licensed by the Securities and Futures Commission (“the SFC”) to carry on asset management.  The Fund is a segregated portfolio company and it appointed the Company as an investment manager.

3.  Since November 2008, the SFC has received enquiries and complaints from the public concerning the Fund, the Company, DGAM and persons associated with them.

4.  On 9 January 2009, the petitioner’s solicitors served a statutory demand on the Company at its principal place of business in Hong Kong for repayment of the debt of $18,397,904.16 being money in her investment account with the Company.  As no payment was made, this winding-up petition was presented on 4 February 2009 on the ground that the Company is insolvent and unable to pay its debts within the meaning of section 327 of the Companies Ordinance, Cap. 32.

5.  There is one supporting creditor with a claim of US$1,450,000.  The SFC has also filed a notice of intention to appear on this petition and to support it, on the basis it is empowered by section 212 of the Securities and Futures Ordinance, Cap. 571 to present a petition to wind up a corporation under Cap. 32 on the just and equitable ground.

6.  No evidence in opposition has been filed by the Company.  The Company’s solicitors have ceased to act by an order made on 27 April 2009.

7.  On the application of the SFC, I made an order on 27 April 2009 in HCMP No. 796 of 2009, appointing John Robert Lees and Colum Sebastian Joseph Bancroft joint and several administrators of the Company, DGAM, DFL and the Fund to administer the property of these four companies, on the basis there is evidence to suggest that the Company and other relevant parties have contravened Cap. 571, and that the assets of the Fund have been dissipated.

8.  The administrators have by a letter of their solicitors dated 22 May 2009 informed the court that the Company would not oppose the making of a winding-up order. 

9.  The court has jurisdiction to wind up the Company.  It has carried on business within Hong Kong and there would appear to be a reasonable possibility of a benefit accruing to creditors from the making of a winding-up order.  I am satisfied it is desirable in the public interest that the Company be wound up and make an order accordingly.

10.  Prior to the making of the winding-up order, I have on the application of the SFC made an order appointing the administrators as the provisional liquidators of the Company.  The administrators have gained knowledge of the Company in the performance of their duties as an administrators, their appointment as provisional liquidators would provide continuity and it would be more efficient as costs from duplication of work could be avoided.  They will continue in their office as provisional liquidators by virtue of the statutory provision until they or others should be appointed liquidators.

11.  I order the costs of the petitioner in these proceedings including the costs of its own application for the appointment of provisional liquidators but limited to the costs incurred up to 26 April 2009,  the costs of the supporting creditor and of the SFC in this petition to be paid out of the Company’s assets.

12.  I also order the hearing date of the petitioner’s application for appointment of provisional liquidators on 29 May 2009 to be vacated.