XCHRX In re KEON TRADING CO. LTD.

1997, No.MP 3974

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS

--------------------

--------------------

------------------------

J U D G M E N T

------------------------

1. I have before me an Amended Originating Summons seeking the determination of the court pursuant to section 255 of the Companies Ordinance with regard to the following matters :

(1) Whether the members' voluntary liquidation initiated by the Special Resolution dated 14th February 1997 is effectively determined/terminated by the members of the Company by the passing of Special Resolution dated 23rd January 1998.

(2) Whether the Company is now in its full corporate state to continue to carry on its business with full corporate powers.

2. What has happened is that in February 1997 the Company went into voluntary liquidation. In the course of preparing the accounts, it came to the attention of the Company that it held title to certain properties as trustee or nominee for one of its directors. The properties are situated in China. The disposition of these properties would be complicated or made difficult if the Company were to be dissolved. In these circumstances, the Company has passed a further special resolution to rescind the earlier resolution. As no final meeting has yet been held, the Company continues to remain in existence notwithstanding the Special Resolution of 14 February 1997.

3. As to the first question, I am satisfied that the Special Resolution passed on 23 January 1998 effectively rescinded the earlier resolution that the Company be put into voluntary liquidation so as to put an end to the voluntary liquidation.

4. The second question raised by the Amended Originating Summons comes to this, namely, whether the Company, as result of the passing of the recent Special Resolution, resumed its pre-voluntary liquidation status so as to be able to continue to carry on business as a company with powers accorded to it under its Articles and the Companies Ordinance. I think it must follow from the fact that the rescission of the earlier resolution was effective, that the Company continues in existence and is therefore able to function as a company which has not passed any resolution to go into voluntary liquidation.

5. Accordingly, the questions raised in the Amended Originating Summons are to be answered in the affirmative.

(Doreen Le Pichon)

Judge of the Court of First Instance
High Court