LEOW QUEK SHIONG and SEAH ROH LIN, Joint and Several Trustees of LIM OON KUIN's bankruptcy estate v. SHENG XING HOLDINGS LTD

HCMP 2518/2025

[2026] HKCFI 4123

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2518 OF 2025

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REASONS FOR DECISION

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1.  The Trustees seek:-

(1)  the Company’s 2019-2025 financial statements (whether audited or unaudited); and

(2)  the Company’s monthly management accounts from January 2024 to December 2025.

I shall refer to the foregoing collectively as “the Documents”.

2.  On 19 December 2024, the Singapore High Court made a bankruptcy order against OK Lim (“the Bankrupt”)  and appointed the Trustees as the joint and several trustees of the Bankrupt’s estate.

3.  On 18 June 2025, on the Trustees’ application, Linda Chan J recognised the Trustees’ appointment and conferred certain powers on them by way of assistance. More particularly, the judge’s Recognition Order empowered the Trustees:-

(a)  to request and receive from third parties documents and information belonging to the Bankrupt or to which the Bankrupt is otherwise entitled, including his business dealings, accounts, assets, liabilities and financial affairs …

(b)  to locate, protect, secure and take into their possession and control the books, papers, and records belonging to the Bankrupt or to which the Bankrupt is otherwise entitled including the accountancy and statutory records within the jurisdiction of this Court and to investigate the assets and affairs of the Bankrupt.

(c)  to bring legal proceedings and make applications to this Court whether in their own name or as trustees of the Bankrupt’s bankruptcy estate …

4.  The Bankrupt holds 87,964 shares (approximately 7.33%)  in Sheng Xing Holdings Ltd (“the Company”).

5.  The Bankrupt claims in his Statements of Affairs that the Shares are held on trust for his deceased sister, Lam Yuk Yip (“the Mother”). The Trustees seek the Documents to verify whether this is correct and to determine whether there is value in the Company.

6.  I am not persuaded that the Trustees are entitled to the Documents.

7.  First, the Trustees say that the Documents are reasonably required for the Trustees to carry out their functions.  It is not apparent to me that the Documents fall within the three sub-paragraphs of the Recognition Order which I have just highlighted.  More particularly, the Trustees have not satisfied me that the Documents “belong to the Bankrupt” or the Bankrupt is “otherwise entitled” to the same. 

8.  The Trustees initially submitted that, as a registered shareholder, the Bankrupt would be entitled, under Companies Ordinance (Cap 622)  section 740 and Article 127 of Table A, to the laying of profit and loss accounts, balance sheets, and reports in a general meeting.  But section 740 enables an applicant to apply to the court for an order for inspection.  Here the Trustee is applying pursuant to the Recognition Order.  There is no application under section 740.  In the absence of a specific order by the court made under section 740 enabling inspection of the Documents by the Trustees as applicant, the Trustees must show that the current application comes within the terms of the Recognition Order.  One cannot, by simply referring to section 740 in one’s skeleton, override the limits of the Recognition Order.  Article 127 of Table A provides:-

“The directors shall from time to time, in accordance with sections 122, 124 and 129D of the Ordinance, cause to be prepared and to be laid before the company in general meeting such profit and loss accounts, balance sheets, group accounts (if any)  and reports as are referred to in those sections.”

It does not follow from this that the Bankrupt as a shareholder is entitled to see all the Company’s financial statements (whether audited or unaudited)  or its management accounts outside of the context of a particular general meeting. 

9.  I note in this connection that, under the Company’s articles of Association:-

“Any person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such evidence being produced as may from time to time properly be required by the directors and subject as hereinafter provided, elect either to be registered himself as holder of the share or to have some person nominated by him registered as the transferee thereof, but the directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by that member before his death or bankruptcy, as the case may be.”

The Trustees have not complied with the procedure in the article for registering themselves or a nominee as shareholder in place of the Bankrupt.

10.  Second, there is compelling evidence that the shares were held by the Bankrupt on trust for the Mother or at the very least the Firm (as defined below).  The shares were paid through monies remitted to the Bankrupt by the family Firm behind the Company in what has been described as a circular transaction.  On this basis, there being no presumption of advancement, the shares would have been held by the Bankrupt on resulting trust for the Mother or the Firm.

11.  The Company is essentially a family business.  Lam Kwok Wah (“the Father”)  and his wife (the Mother)  started a metal packaging business in the 1980s.  A partnership (“the Firm”)  was thus established in Hong Kong in August 1981 under the name of Sheng Xing Trading Co.  The original partners of the Firm were the Father and his sons Lam Wing Yin and Lam Wing Lung.  On the father’s death in 2007, another son Lam Wing Po succeeded to the Father’s one-third share.  Since 1 May 2008, the Firm has been owned in equal one-third shares by Lam Wing Yin, Lam Wing Lung, and Lam Wing Po (“the three Lam Brothers”).

12.  The Company was incorporated in September 2009 to take over the Firm’s business and function as a corporate vehicle for the Lam family in place of the Firm.

13.  The three Lam Brothers decided that the Company should recognise the contributions of all family members.  The intention was thus that the Mother, Lam Wing On (another Lam brother), and Penny (the sister of the Lam brothers)  should become shareholders of the Company.  Shares were thus allocated among Lam family members.  Rightly or wrongly, the Mother thought that it would a good idea to have her brother OK Lim (the Bankrupt)  named as a shareholder of the Company.  She apparently believed that his then reputation as a wealthy business person would help establish the new Company’s profile.  She accordingly directed that her shares in the Company be registered in the names of the Bankrupt and his son CM Lim.  The Lam brothers were not involved in the discussions of the arrangements among the Mother, OK Lim, and CM Lim.

14.  It was only when investigating the Bankrupt’s involvement in the Company following the Trustees’ request for disclosure of the Documents and in the course of discussions among the Lam brothers and Penny, that Penny referred to the Bankrupt and CM Lim holding their Company shares on trust for the Mother.  Penny was aware of this, because she had been requested by the Mother to carry out the arrangements in relation to such trust.  In searching for evidence in support, Penny found documents establishing the circular transaction by which the Bankrupt and CM Lim paid for their Company shares through monies remitted to them by the Firm.

15.  The Trustees suggest that the assertion of a resulting trust by the Company is suspicious.  They say that there is no explanation why the Mother believed that the Bankrupt’s reputation would benefit the Company.  If the Mother’s rationale was to use the Bankrupt’s name merely as a nominal shareholder, why did the Mother transfer her entire shareholding to the Bankrupt and CM Lim.  A much smaller nominal holding (the Trustees submit)  would have sufficed.  Further, why was CM Lim also made a shareholder?  How is it that the Lam brothers were not aware of the supposed trust, when the circular transaction was routed through their accounts? Why was the trust not listed in the statement of the Mother’s assets upon her death?

16.  It seems to me that, many years down the road, one can always raise questions about what the Mother’s thinking was.  Unfortunately, she is long deceased and cannot answer these questions.  The fact is, however, that the circular transaction is clearly documented.  It is difficult to explain the documentation as evidencing anything other than a resulting trust, either on behalf of the Firm or the Mother.  The Company is a family affair.  The circular transaction may not have been conducted with the formality or documentation that one might desire or expect from a publicly listed company or a company involving persons outside close family members.  It is doubtful that the Mother, the Lam brothers or Penny had any clear idea of what a resulting trust is as a matter of law.  They may simply have omitted to list the trust among the Mother’s assets at the time of her death.  But such omissions do not detract from the cogency of the documentary evidence supporting the circular transaction and from such transaction’s legal and equitable implications.

17.  Third, the Trustees say that irrespective of the powers in the Recognition Order, their recognition in Hong Kong allows them to seek and enable me to grant an order for the production of the Documents, if I am satisfied that the Documents are reasonably required for the Trustees to carry out their functions.  I am not so satisfied.  Assume (which I do not necessarily accept)  that I have the broad general common law power for which the Trustees contend.  I do not think that it follows that I should use such power to override the strictures of the Recognition Order or supplement it on the facts of this case.  Nor, specifically, should I exercise such power in light of the evidence of a resulting trust which I have just discussed.  In light of that evidence, I do not believe that the Trustees have reasonable grounds for suspicion, much less established that the Documents are reasonably required to enable them to carry out their functions.

18.  For the foregoing reasons, I dismiss the Trustees’ application.  I shall now hear the parties on costs and consequential orders.