ZHAN YUNLIN v. HONG KONG NOROMEGA BIOTECHNOLOGY CO., LTD AND ANOTHER

HCMP 2467/2025 & HCA 397/2026
(HEARD TOGETHER)

[2026] HKCFI 4360

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2467 OF 2025

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 397 OF 2026

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(HEARD TOGETHER)

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REASONS FOR JUDGMENT

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Introduction

1.  On 3 June 2026 I heard two applications.  The first application was brought by Mr Zhan Yunlin (“Mr Zhan”) by originating summons in HCMP 2467/2025 (“OS”) dated 11 December 2025 seeking orders that the 1^st and 2^nd Defendants (“Company” and “Mr Liu” respectively) do make available within 28 days of the making of the order sought by Mr Zhan the documents described in paragraph 2 to Mr Zhan or his duly authorised representative(s) for inspection and copying at the Company’s registered office or such other location as the Parties agree in writing or the Court directs, alternatively if agreed by the Parties in writing, provide to Mr Zhan or his duly authorised representative(s) copies of the documents described in paragraph 2 of the OS, which in summary are.

(1)  All accounting records within the meaning of sections 373(2) and (3) of the Companies Ordinance, Cap. 622 (“Ordinance”) and, to the extent that they do not come within the scope of sections 373(2) and (3) any management accounts produced by the Company since its incorporation; and

(2)  All distribution agreements, contracts, delivery notes, invoices, receipts and vouchers in respect of any transaction by and for the Company with a value of more than HK$5,000.

2.  The second application was brought by two summonses issued by the Defendants on 24 April 2026 in these proceedings and HCA 397/2026 for consolidation of the OS with HCA 397/2026.

3.  The Defendants had agreed by the time of the hearing to disclose a certain proportion of the documents sought by Mr Zhan.  I made the following order for disclosure opn 3 June 2026 (“Order”) of those of the controversial documents that I was of the view Mr Zhan was entitled to see:

“(1) The 1^st and 2^nd Defendants do within 28 days hereof make available the documents described in the paragraphs below herein to the Plaintiff and/or his duly authorised representative(s) for inspection and copying at the 1^st Defendant’s registered office or such other location as the parties may agree in writing or as directed by the Court, or alternatively provide the Plaintiff and/or his duly authorised representative(s) with copies of the documents described in the paragraphs below herein:

(a) All accounting records within the meaning of sections 373(2) and 373(3) of the Companies Ordinance (Cap 622);

(b) To the extent that they do not come within the scope of paragraph 2(a), any management accounts produced by the 1^st Defendant since its incorporation; and

(c)  All distribution agreements, contracts, delivery notes, invoices, receipts and vouchers in respect of any transaction by and for the Company with a value of more than HK$5,000.”

4.  It followed that I dismissed the consolidation application.

5.  Mr Zhan owns 40% of the Company.  The Company is incorporated in Hong Kong. Its main business is to distribute high-end dietary supplements manufactured in Northern Europe, in Mainland China (“Mainland”) and Hong Kong. One of the main dietary supplements produced for the Company is the “Noromega” brand.  Noromega is supplied by Vitalis Pharma AS (“Vitalis”). The Company has four shareholders: Mr Zhan (40%), Mr Wang Zhongshan (“Mr Wang”) (45%), Mr Liu (10%) and Mr Zhang Jianli (5%).  The Company has two directors: Mr Zhan and Mr Liu.  They have fallen out and their disputes have resulted in Mr Zhan being unable to access the documents that he sought disclosed in the OS.

Legal Principle

6.  In broad terms a director of a company has a legal right to access all of a company’s documents without giving a reason[1]. The right arises in one of two ways.  The first is pursuant to section 375 of the Ordinance.  Section 373 of the Ordinance requires a company to keep accounting records. What those records must contain is set out in subsection 3.  The accounting records must be open to inspection by the directors at all times without charge, and a company must allow its directors to make a copy of its accounting records in the course of their inspection.

7.  In addition a director has an unfettered common law right to access a company’s documents: see Wong Sau Man v Wong Kan Po[2], [13].  This is the corollary of a director’s duties: Tsai Shao Chung v Asia Television Ltd[3].

8.  A company can only properly refuse access by a director to its documents if it can demonstrate by clear proof[4] that the director intends to abuse the exercise of his right to inspect and injure the company in a material way[5].  Consequently, the exercise of a director’s right of inspection is not generally speaking a matter of the Court’s discretion[6].  As I have mentioned earlier the onus of establishing that the right to inspect is relied on for an improper purpose is on the person asserting it and the Court must be satisfied by clear evidence that the right will be abused.  Generally, an allegation of impropriety must be proved by evidence commensurate with the allegation.  A party opposing inspection and copying of documents may have an understandable concern about the use to which the information may be put, but the possibility of misuse, or concerns and sensitivities arising from the existence of a dispute between the parties do not constitute proof, let alone clear proof, that the director intends to (A) abuse the right and (B) abuse the right in a way that will injure the company in a material way[7].  A party opposing an application of the type before me, therefore, has a very high bar to surmount.  In my view, the evidence filed by the Defendants falls far and obviously short of surmounting it.

The Defendants’ Case

9.  The Defendants’ evidence said to prove that Mr Zhan will use the information contained in the contentious documents in a way which will damage the Company is as follows.

10.  The Company was formed by Mr Zhan and Mr Wang in 2018 as a corporate vehicle which would be used to facilitate the development of a business which involved obtaining fish oil from sources in Norway with a view to ultimately sell them in the Mainland.  The name “Noromega” being an amalgamation of the words “omega-3” and “Norway”.  Mr Zhan is a Norwegian citizen and has the relevant connections in Norway.  Mr Wang is based in the Mainland and has connections relevant to the development of a sales network for the Noromega products in the Mainland.  In about March 2018, Mr Zhan and Mr Wang reached an agreement and an understanding which, as seems to be common in dealings between Mainland businessmen, was not reduced to writing. That involved the establishment of corporate entities in the Mainland, Hong Kong, and Norway (“Noromega Group”) to facilitate and streamline research, procurement, sales, and marketing, with Mr Wang and his associates (“Wang Camp”) holding 60% of the relevant company and Mr Zhan holding 40%, such that any profit would be distributed in a 6:4 ratio.  The Company was the relevant Hong Kong corporate vehicle and held the beneficial ownership of the entire issued shareholding in Vitalis.  Vitalis was to be the Norwegian corporate vehicle, which the Wang Camp believed had no material assets and was effectively a shell company.  Mr Wang says that he was persuaded by Mr Zhan that the shareholding in Vitalis should be held by one of Mr Zhan’s corporate vehicles, which would hold the shares in Vitalis on trust for the Company.  It is Mr Wang’s case that Vitalis had no assets until the Company began to inject them.

11.  In around late 2020, Mr Wang gradually uncovered information which suggested that Mr Zhan had committed various wrongdoings against the interests of the Company and the Noromega Group generally.  In Mr Liu’s first affirmation, these are explained and can be summarised as follows.

12.  It was the understanding between Mr Wang and Mr Zhan that the profit of the Noromega Group was to be concentrated in the Company.  The Wang Camp, which is how Mr Liu refers to whoever it was who knows the matters that he refers to in his first affirmation, noted that Vitalis appeared to be selling products to the Company at undisclosed and/or unwarranted mark-ups.  The implication being that profit was being made within Vitalis, contrary to the understanding that the profit should be made in the Company.  Mr Zhan failed to provide information requested in order to allow the Wang Camp to determine whether Mr Zhan had been causing improper pricing of the products supplied by Vitalis.  The Wang Camp concluded that it had become clear that profits were being held at the Vitalis level.  However, Mr Liu does not, in his first affirmation, provide any financial evidence to support this conclusion.  Mr Liu also, in this part of his evidence, records that there were quality issues with the products sourced by Mr Zhan, presumably through Vitalis, although it is unclear why this in itself might have been, assuming it is correct, anything other than a quality control issue.  Mr Liu then says that in May 2018, when the Wang Camp sought to register the Noromega trademark in the Mainland, they discovered that it was already registered by a company which had acted previously as an agent for Mr Zhan. In 2019, Vitalis registered the trademark “Noromega” in Norway.  The Company registered the trademark in Hong Kong in August 2018.  In January 2021, the Wang Camp discovered that the Mainland trademark had been transferred to Vitalis.  The Wang Camp therefore believe that Mr Zhan was trying to arrange matters so that he had control of the Noromega trademark in the Mainland.

13.  Next, Mr Liu says in his first affirmation that in March 2019, Mr Zhan registered a trademark of the name “Nordmea” and began to distribute pharmaceutical products using that brand name on the Mainland online shopping platforms.  He points to the similarity between the name “Nordmea” and “Noromega”, and what he says are similarities in the packaging of the products. He believes that the sale of Nordmea products led to inquiries and complaints from Noromega customers who were confused by the existence of similar and apparently competing brands Mr Liu says that Mr Zhan acknowledged that Nordmea was similar to Noromega, but said that it did not conflict with the Noromega Group’s business.  Mr Liu says that this is wrong.  The products directly compete with the Noromega Group’s business, and this was plainly a conflict of interest.  The conflict being between the interests of the Company and Mr Zhan’s actions in setting up and promoting a similar brand.  Mr Liu says that Mr Zhan has not disputed that he controls Nordmea and that it sells products similar to those sold by Noromega.

14.  The final and, as I understand it, the most serious complaint is that Mr Zhan has sold the shares in Vitalis.  Mr Liu suggests that this would necessarily cut off the existing distributor relationship between Vitalis and the Company, and would amount to Mr Zhan misappropriating Vitalis:

“58. In gist, on or about 24 November 2025, Mr Zhan caused and/or procured Norsund to, amongst others, sell 49.0662% of Vitalis’ entire issued shareholding at the consideration of 150 million kr (approximately RMB 106 million) to, and to allot an additional 32.9157% of Vitalis’ entire issued shareholding for the subscription price of 150 million kr in favour of, Qingmu Pte Ltd (‘Qingmu’). This was supposed to result in Qingmu’s subsidiary becoming the ‘exclusive distributor of the Noromega brand in China’, as mentioned in Qingmu’s announcement.

59.  Qingmu is a subsidiary of 青木科技股份有限公司, whose group is engaged in the health products business—and thus is a competitor with the Noromega Group (and specifically, HK Noromega)”

15.  Mr Liu says that the transaction is, on the assumption that Vitalis was beneficially owned by the Company, obviously problematic; if the transaction is valid, it means that the Company’s interest in Vitalis is substantially diluted and Qingmu will be its majority shareholder.  Mr Liu says that the sale was in any event at an undervalue.  In order to substantiate this allegation, he exhibits a valuation report.  The report assesses the value of Vitalis, taking into account the present value of expected future cash flow.

16.  Mr Liu suggests that, in the light of the matters that I have summarised, it appears that Mr Zhan is seeking the documents not to discharge his duties as a director or as a shareholder of the Company, but instead to advance and prefer his personal interests to the detriment of the Company.

The Plaintiff’s Case

17.  As one would expect, Mr Zhan disputes the Wang Camp’s case.  He advances his own complaints about their conduct as well as addressing the concerns expressed in Mr Liu’s first affirmation.

18.  First, he says that documents provided under cover of a letter from Mr Liu’s former legal representatives, Li & Partner dated 14 January 2026 consisted of a number of documents signed in his name but not by him.  These include the report of the directors and the audited financial statements of the Company for the financial years ended 31 December 2020, 2021, 2022, 2023, and 2024.  The response from Mr Liu in an email in February 2026 was that Mr Zhan had authorised his signature to be placed on these documents.  Mr Zhan disputes this in paragraph 19 of his second affirmation. He lists what he characterises as “unusual features” in the audit documents.  In paragraph 20, not only does he suggest that the matters which he has detailed call into question Mr Liu’s credibility, but also suggest that the financial statements were not audited.  He further suggests that this has been done in an attempt to hide the true state of the Company’s accounts.  He complains more generally that he has been kept in the dark about the Company’s financial affairs and activities.  It is for these reasons that he wishes to inspect in detail the financial records of the Company.

19.  So far as the alleged wrongdoing is concerned, Mr Zhan responds as follows.

(1)  He suggests that it is contradictory for the Wang Camp to allege, on the one hand, that the Company was the beneficial owner of Vitalis, and then, on the other, suggest that he had arranged the commercial transactions so as to prefer Vitalis’ interests over those of the Company.

(2)  He also suggests that it is inherently unlikely that, if the Wang Camp had a significant ultimate beneficial interest in Vitalis, they would not have taken some steps to have this formally recognised in order that they could exercise the legal rights that would normally attach to such an interest.

20.  However, Mr Zhan disputes that Vitalis is beneficially owned by the Company.  He says it has its own independent management and directors, consistent with the Company having no beneficial interest in it.  The reality is that Vitalis and the Company have maintained a mutually beneficial business relationship over the years.  Both companies have had successful and profitable businesses.  He says that, this being the case, the Wang Camp have always known that he has interests in both Vitalis and the Company, and they had not, prior to the recent falling out, expressed any concerns about a conflict of interest. He also says that the fact that Vitalis is independent of the Company explains why it has not disclosed to the Company details of its internal pricing.

21.  So far as the trademarks are concerned, Mr Zhan says that he had registered various similar trademarks prior to his collaboration with the Wang Camp.  More generally, Vitalis had been carrying on business with other companies in the Mainland prior to the agreements made with the Wang Camp.  In short, Mr Zhan says that Vitalis had always been in the business of selling supplements to Mainland distributors, and that the Company became one of them as a consequence of his discussions with Mr Wang.  He does, however, dispute that the brands “Nordmea” and “Noromega” are in direct competition.  He says that the logos are different, as are their price points in the market.  He says that it is disingenuous for the Wang Camp to appear to suggest that Vitalis should only be supplying to the Company when the Wang Camp themselves have another company which markets supplements imported from the United States under the brand name “MegaGold”.

22.  Consistent with Mr Zhan’s case that the Company had no beneficial interest in Vitalis, he says that there was nothing objectionable in the sale of shares in it to Qingmu.

23.  In conclusion, Mr Zhan says that he wishes to carry out a comprehensive inspection of the Company’s financial records in order to ascertain whether the financial statements he has seen accurately reflect its financial state and to better understand its financial affairs.  He is not doing so in order to obtain confidential information that he will misuse.

Disposition

24.  The Court cannot determine on affidavit evidence, nor would it be appropriate or proper for it to attempt to do so, the Parties’ conflicting cases on the propriety of each other’s conduct.  As I have explained, the burden rests on the Defendants to adduce clear evidence of a likely risk of material damage to the Company if Mr Zhan is given access to the controversial documents, which, as a director of the Company, he would generally be entitled to.  It cannot do this simply by adducing evidence of dispute, suspicions or general conjecture.  It must adduce evidence from which it is readily apparent that there is a real and material risk of damage to the Company.  In my view, the evidence filed by the Defendants in the form of Mr Liu’s first affirmation plainly falls short of this.  For that reason, I granted the order referred to at the outset of these Reasons.