ACROPOLIS LIMITED suing on behalf of itself and all other shareholders in AESO HOLDING LTD AND ANOTHER v. W&Q INVESTMENT LTD AND OTHERS

ACROPOLIS LIMITED suing on behalf of itself and all other shareholders in AESO HOLDING LTD AND ANOTHER v. W&Q INVESTMENT LTD AND OTHERS

The court found there was a serious issue to be tried based on the evidence (timing of CCASS transfers, connections shown in investigation material, meeting notes and other indicia pointing to a possibly fraudulent device) and that the balance of convenience favoured preserving the company and its operating subsidiary pending trial; accordingly the court granted a limited interlocutory injunction restraining the specified defendants from relying on or implementing the Disputed EGM resolutions (with narrowly drawn exceptions) and allowed permissive procedural relief (addition of parties and service out of jurisdiction).

Citation
ACROPOLIS LIMITED suing on behalf of itself and all other shareholders in AESO HOLDING LTD AND ANOTHER v. W&Q INVESTMENT LTD AND OTHERS
Parties
1st Plaintiff: Acropolis Limited; 2nd Plaintiff: Chan Siu Chung; 1st Defendant: W&Q Investment Limited; 2nd Defendant: Liu Chang Kien; 3rd Defendant: Zhang Qi; 4th Defendant: Law Wing Kit; 5th Defendant: To Lung Sang; 6th Defendant: Chan Kooi Por Benjamin; 7th Defendant: Cheung Denise; 8th Defendant: Chan Hin Hai Henry; 9th Defendant: Kort Wing Ho; 10th Defendant: Ko Kwok Fai Dennis; 11th Defendant: To Man Choy Jacky; 12th Defendant: Tsang Kwok Shan Sandy; 13th Defendant: Daniel Kan Pui Kei; 14th Defendant: Aeso Holding Limited; 15th Defendant: Aeschylus Limited; 16th Defendant: Aeso Limited (Aeso HK)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
31 August 2017
Case Number
HCA1496/2017
Procedural Posture
Derivative Action Seeking Interlocutory Injunctions (company/shareholder Dispute) / Chambers Hearing on Injunction Summons and Ancillary Applications (interlocutory Stage)
Outcome
Interim relief granted in part for plaintiffs; cross summons dismissed; leave granted to add D15 and D16 and to serve out of jurisdiction; order nisi to be made absolute after 21 days; costs in the cause
Legal Topics
Derivative Action, Interim Injunction, Validity of EGM and Board Appointments, Alleged Fraudulent Share Placement and Collusion, Takeovers/attribution of Shareholdings, Receivership Applications
Source Language
EN
Company Law Securities Regulation Civil Procedure Equity and Fiduciary Duties Insolvency/receivership Derivative Action Interim Injunction Validity of EGM and Board Appointments +3 more

Case Brief

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Parties

Acropolis Limited

1st Plaintiff

Chan Siu Chung

2nd Plaintiff

W&Q Investment Limited

1st Defendant

Liu Chang Kien

2nd Defendant

Zhang Qi

3rd Defendant

Law Wing Kit

4th Defendant

To Lung Sang

5th Defendant

Chan Kooi Por Benjamin

6th Defendant

Cheung Denise

7th Defendant

Chan Hin Hai Henry

8th Defendant

Kort Wing Ho

9th Defendant

Ko Kwok Fai Dennis

10th Defendant

To Man Choy Jacky

11th Defendant

Tsang Kwok Shan Sandy

12th Defendant

Daniel Kan Pui Kei

13th Defendant

Aeso Holding Limited

14th Defendant

Aeschylus Limited

15th Defendant

Aeso Limited (Aeso HK)

16th Defendant

Procedural Posture

Derivative Action Seeking Interlocutory Injunctions (company/shareholder Dispute) / Chambers Hearing on Injunction Summons and Ancillary Applications (interlocutory Stage)

Legal Issues

  1. 1 Whether there are serious issues to be tried on plaintiffs' allegation that shares and the requisition/EGM were procured by fraud and collusion
  2. 2 Whether the balance of convenience favours injunctive relief restraining reliance on the Disputed EGM resolutions
  3. 3 Whether plaintiffs have legal basis to seek nullification of share acquisitions/placements and EGM resolutions

Ratio Decidendi

The court found there was a serious issue to be tried based on the evidence (timing of CCASS transfers, connections shown in investigation material, meeting notes and other indicia pointing to a possibly fraudulent device) and that the balance of convenience favoured preserving the company and its operating subsidiary pending trial; accordingly the court granted a limited interlocutory injunction restraining the specified defendants from relying on or implementing the Disputed EGM resolutions (with narrowly drawn exceptions) and allowed permissive procedural relief (addition of parties and service out of jurisdiction).

Court Disposition

Interim relief granted in part for plaintiffs; cross summons dismissed; leave granted to add D15 and D16 and to serve out of jurisdiction; order nisi to be made absolute after 21 days; costs in the cause

Orders

  • D1-D4, D10-D12, D14-D16 are restrained until determination of the dispute or further order from relying on or carrying into effect: (a) the resolutions purportedly passed at the purported extraordinary general meeting of the Company on 12 June 2017 (Disputed EGM Resolutions); (b) the resolutions purportedly passed...
  • SAVE AND EXCEPT any resolutions passed to continue to defend HCMP 1647/2017 (Receivership Summons) and HCA 1737/2017