RE SEHR RICH DEVELOPMENT LTD

HCMP 1776/2018

[2018] HKCFI 2627

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1776 OF 2018

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D E C I S I O N

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1.  This is an application made by one of the shareholders in Regent Chinese Limited (“the Company”).  At all material times, the company has two shareholders, each holding 50 per cent of the shares in the company.  They are SEHR Rich Development Limited (“SEHR”) and Wingain International Limited (“Wingain”) respectively. 

2.  Also, at all material times, the company has two directors, namely one Madam Ying Tze Yeuk (“Madam Ying”) and SEHR.  In September 2018, by reason of the cessation of the company’s business, the directors decided to wind up the company.  They intended to achieve a members’ voluntary winding up.  Accordingly, the company purported to render a members’ resolution to wind up the company voluntarily, and also purported to issue a certificate of solvency.

3.  However, as pointed out by the Companies Registrar, the purported certificate of solvency was ineffective because it was not signed by both directors of the company.  Further, the purported written resolution was not signed by all members of the company. 

4.  By reason of the failure to duly file a certificate of solvency, the company did not successfully enter into a members’ voluntary winding up, and by the operation of section 233(4) of the Companies (Winding up and Miscellaneous Provisions) Ordinance, Cap 32, the company is now in creditors’ voluntary winding up. 

5.  I am told that the company has no creditor and is solvent.  SEHR now applies, by way of an ex parte originating summons, for a stay of the winding up.  Originally, I had concerns about whether the other shareholder is supporting the application.  At the hearing, I was offered an undertaking by those instructing Ms Ling that they would file a notice to act for Wingain within 14 days from today, and I presume that after they file a notice to act, the position will be, that Wingain will support this application.  So I accept this undertaking as sufficient comfort that the other shareholder supports this application. 

6.  The other slight query I had was whether the company has paid off all its debts, and indeed, has no creditor because the audited accounts up to March this year showed a small current liability.  I am told by Ms Ling that this liability has since been paid off and the applicant further undertakes to file evidence within 14 days to the effect that all liabilities of the company have been paid off.  I accept that undertaking and am satisfied on that basis that the company has no creditor and is indeed solvent.

7.  I accept that the reason for the present state of affairs is technical.  The company should not be in creditors’ voluntary winding up, given that the company has no creditors.  Also, given that the company has ceased business, there is no need for the expenditure of the appointment of a liquidator. 

8.  I am satisfied, therefore, that acceding to the present application would not prejudice the interests of any creditor because there is none.  Also, on the basis of the undertakings I have just mentioned, I am satisfied that acceding to the present application would not prejudice any member’s interest because such application is indeed supported by all the members of the company. 

9.  Further, on the basis of the materials before me, there is nothing indicating that the public interest is in any way engaged, or there is any matter which merits investigation or indicative of anything concerning lack of commercial morality.  For these reasons, I am prepared to grant the stay as sought, and Ms Ling has confirmed that the only order which she requires this morning is paragraph 1 of the ex parte originating summons dated 19 October 2018, and for the reasons I have just stated, I will grant that order, and also order that there be no order as to costs.