NT PHARMA PACIFIC COMPANY LTD v. NT PHARMA INTERNATIONAL COMPANY LTD AND OTHERS

HCMP 2711/2024

[2025] HKCFI 229

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2711 OF 2024

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D E C I S I O N

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1.  By the summons dated 17 December 2021, the plaintiff (“P”)  is seeking for an injunction restraining the defendants (“Ds”)  to remove from Hong Kong any of their assets which are within Hong Kong, whether in his own name or not, and whether solely or jointly owned, up to the value of US$1,605,000; or in any way disposing of or deal with or diminish the value of any of their assets, which are within Hong Kong, up to the same amount.

2.  By an amendment made at the beginning of the hearing today, Mr Tong SC for P also sought an injunction prohibiting the 1^st defendant (“D1”)  from making any further payments to the 4^th defendant (“D4”)  by whatever means, unless D1 be given prior written notice of at least 2 weeks by D1, the 2^nd defendant (“D2”)  and the 3^rd defendant (“D3”)  or any of them before making such payment.

3.  P also sought to ask Ds to disclose to it in writing within 14 days from the service of the order of all their assets of an individual value of US$1,605,000 or more in Hong Kong.

4.  Although this is supposed to be an inter parte summons where Ds have had received notice and been served with the summons as well as the supporting affirmation evidence, it is clear that given the very shortage of time, ie less than 2 days, Ds are hardly in the positon to respond to the contents of the affirmations.

5.  Hence, I think Mr Lo for D2 & D3 was right to label the application made by Mr Tong SC today as “interim-interim relief” in respect of P’s amended summons.

6.  I am not satisfied that such an injunction should be allowed at this stage for the following reasons.

7.  First, I do not consider that P, whether deliberately or innocently, have provided a full picture to the Court regarding its application.  Mr Tong SC premised his application that this is a classic “fraud” case where Ds tried to use a sham contract to transfer money out of P’s company into the hands of another party. In particular, Mr Li Ying the Senior Finance Manager at D1 in his affirmation stated that the service agreement referred to in §5 of his affirmation dated 6 September 2024 was made without his knowledge and while he was on leave between 9 and 13 September 2024.  He said it was a very suspicious agreement as it only consisted of 3 pages and only “chopped” at the end without any signature.

8.  Mr Li also stated that he was instructed by D2 to initiate the payment process of 2 payments without his authority and without going through the usual procedure during his holiday.  He only approved the payment of US$430,000 following the instructions by phone on 16 September 2024 but the payment was actually paid on 10 September already.  He called it a clear irregularity in the internal OS system.

9.  Similar subsequent payments of US$595,000 and US$580,000 were made on 30 September 2024, making the total 3 transactions at US$1,605,000.

10.  Given the shortage of time, D2 & D3 were not able to file any evidence.  However, at the beginning of his submissions, Mr Lo was able to produce 3 almost identical service agreements between D1 ie the operating arm of P company, and other outside companies.  They were dated October 2021, October 2022 and April 2023 respectively.  In terms of the complaints made by P regarding the service agreement in question, there was no difference in substance, including the fact that the contacting person was an individual in one of the holding companies of P, ie Konruns. 

11.  But the most pertinent document produced by Mr Lo is a mobile phone “chat” record between Mr Derek Lee of P and D2 purportedly on 5 September 2024, ie one day before the date of the service agreement in question.  In the record, contrary to what Mr Li has stated in his affirmation, it appeared that he had in fact received the service agreement from D2 or at least aware from him that such a service agreement would be coming his way where the party receiving the service payment will be changed.

12.  Hence, on the surface of the matter, I am not satisfied that P had provided the full picture to the Court and disclosed all the relevant materials to overcome the hurdle that an interim injunction should be granted to it pending the substantive argument in this case.

13.  Second, I agree with Mr Lo that there is no urgency in the matter.  The service agreement was dated 6 September 2024.  On its own case, P were aware of the alleged fraud latest by October 2024.  However, it had waited until 17 December 2024 before it took out an originating summons and the inter parte injunction summons.  This in itself shows that there was delay on the part of P and there was no urgency to the application.

14.  Third, I agree with Mr Lo that while P is seeking an injunction to freeze the assets of D2 & D3 in Hong Kong, there is no evidence to show that D2 & D3, who being national of PRC and not residents in Hong Kong, have any assets to be frozen within the jurisdiction.  Thus, insofar as the amended summons is targeted against D2 & D3, it is my view defective.

15.  Fourth, I also agree with Mr Lo that no evidence has been shown that there is any risk of dissipation on the part of Ds.  By a flow chart exhibited to the affirmation of Mr Andy Ng at [C/71] of the hearing bundle, it can be seen that there had been a recent change of majority shareholding in D1.  D2 & D3 now own 73.7% of D1 and P only owns 25.3% of it.

16.  It appears to me that this case has all the hallmarks of a dispute between the shareholders of a company and, as a result of the recent changes in its majority shareholding, the minority shareholders was not happy with some of the financial transactions made by the majority shareholders.  This could be the case or may be it is not.  I cannot however on the present evidence decide on this by simply looking at the evidence provided by one side only.

17.  Hence, I consider that Ds should be given the chance to file their evidence and have the matter fully argued before a judge.

18.  I therefore would refuse Mr Tong SC’s application to grant an interim injunction as stated in the amended summons.  Instead, I would give directions for filing of evidence so that the amended summons can be adjourned for argument before a judge in chambers.