XCHRX HCK CHINA INVESTMENTS LTD. AND ANOTHER v. WAH NAM GROUP LTD.

HCCW 130/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 130 OF 2000

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D E C I S I O N

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1. This is an application for validation under Section 182 of the Companies Ordinance of the issue of new shares by the Company under a Subscription Agreement made between the Company and a company called China Zone Limited.

2. The proposed issue is of 150m. new shares of 10 cents each in the Company. At the moment, I am told that the net asset value of the Company is about 3 cents. It is not for me to speculate as to why this company, China Zone, would want to acquire shares in the Company in this way. The subscription moneys are payable in cash. On that basis alone, I would make an order in terms of paragraph 1 of the Summons issued by the Company on 28 March 2000, with the amendments to the schedule as shown in the letter from the Applicant's solicitors dated 6 April 2000, with the addition of the words "into court" after the words "Wah Nam" in the new paragraph (c) of the schedule.

3. I have been brought to a number of pieces of evidence which indicate that some of the evidence filed on behalf of the Company may raise certain suspicions. As I have said, the present order that I am making is made on the basis and on the basis alone of the benefit that would accrue to the Company from being able to get cash of $15m. Therefore, I would reserve any views that I may have on the propriety or otherwise of the acts of the Company in the past few months as indicated in the evidence before me.