XCHRX HWANG DA-LIN AND ANOTHER v. WONG CHUNG KEUNG AND OTHERS

HCCW 643/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING UP NO. 643 OF 1996

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D E C I S I O N

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1. On 8 October 1998, Le Pichon J (as she then was) made an order to the effect that the 1st and 2nd Respondents purchase 600,000 ordinary shares at $1 each in the capital of the Company belonging to the Petitioners at a price to be fixed by such expert as appointed by the Court.

2. She further ordered that in the event of the 1st and 2nd Respondents failing to complete the purchase of the shares within such time as directed by the Court, the Company, that is the 3rd Respondent, do purchase the shares and that upon completion of such purchase by the Company, the reduction of capital of the Company by the nominal value of the Petitioners' shares so purchased be confirmed pursuant to section 168A(2)(c) of the Companies Ordinance Cap.32.

3. Subsequent to that order being made on 10 November 1998, she made a further order appointing receivers. However, in the order appointing receivers, although various specific orders were made, the scope of the powers of the receivers was said to be to manage the Company with a view to its continuance as a going concern until further order. From my reading of this order of 10 November 1998, the receivers were not given specific powers to employ the Company's moneys to acquire the Petitioners' shares in the event that the 1st and 2nd Respondents failed to do so.

4. In the event, the 1st and 2nd Respondents have not purchased the Petitioners' shares and therefore, pursuant to the order of 8 October 1998, it falls to the Company to purchase the Petitioners' shares. However, the Company is still in receivership and therefore the question has arisen as to whether the receivers have power to employ the Company's moneys for the implementation of the order made by Le Pichon J on 8 October 1998.

5. In my view, although the order appointing the receivers confined their powers to the continuance of the Company as a going concern, there must be someone who has to implement the earlier order of 8 October 1998, in other words, the acquisition of the Petitioners' shares in the event that the 1st and 2nd Respondents failed to complete that purchase.

6. Accordingly, I am prepared to order on this summons taken out by the receivers that they be empowered and authorized to utilise the money deposited in the account of the Company to acquire the following shares of the 1st and 2nd Petitioners, namely, 20,000 shares now registered in the name of Carson Wong and 10,000 shares now registered in the name of Hwang Da-lin at HK$1,117.1667 per share, completion to take place within 7 days from the date of this order and payment be made in favour of the transferors as to the relevant amount.

7. I further order that in the event that the money has been placed in a fixed deposit account, that the completion should take place at a time to be agreed between the receivers and the Petitioners' solicitors, failing which agreement there be liberty to apply to this Court. I order that the receivers' costs be borne by the Company.