HONG WEI (ASIA) HOLDINGS CO LTD v. THE REGISTRAR OF COMPANIES

HCMP 1631/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO1631 OF 2016

____________

_____________

_____________

D E C I S I O N

_____________

1. On 10 December 2015, the applicant Company (“the Company”) allotted 15% coupon bonds for an aggregate principal amount of up to $17 million (“the bonds”) to 3 entities. An announcement was made by the Company on the same date.

2. Under section 316(1) of the Companies Ordinance, Cap 622 (“the Ordinance”), a company must, within one month after an allotment of debentures or debenture stock, deliver to the Registrar of Companies for registration a return of the allotment (“the return”), ie by 10 January 2016.

3. During the course of preparation of the Company’s annual report in about May 2016, the Company revisited all the transactions conducted in the financial year and noticed that the return has not been delivered to the Registrar of Companies.

4. It transpired that the Company had the impression that its solicitors had filed the return, whereas the solicitors were awaiting instructions as to whether or not they should prepare it. 

5. I accept that there was miscommunication between the Company and its solicitors. The error on the part of the Company was accidental and not deliberate. 

6. The omission to deliver the return for registration arose out of inadvertence, ie, carelessness and absence of bad faith: Re Poly Property Group Co Ltd, HCMP 3154/2015, 15 December 2015, L Chan J, at §15.

7. There was no intention to mislead the public or otherwise to hide the issue of the bonds.  This was borne out by the fact that the Company had issued a public announcement on the same day as the allotment.  As soon as they discovered the omission, they applied to the court under section 316(4) of the Ordinance for extension of time for delivery of a return to the Companies Registry.  No charge has been laid against the Company as yet for breaching section 316(1). 

8. The present application was 5 months out of time.  However, no prejudice will result to anyone.  The Registrar of Companies does not oppose the present application.

9. I am satisfied on the evidence before me that the failure to deliver the return on time was accidental or due to inadvertence, within the meaning of section 316(5)(a) of the Ordinance.  It will be just and equitable to extend the period for delivery by 7 days. Costs of $1,500 shall be paid by the Company to the Registrar of Companies.