RE CHINA OCEAN INDUSTRY GROUP LTD (“THE COMPANY”)

RE CHINA OCEAN INDUSTRY GROUP LTD (“THE COMPANY”)

The issue or allotment of new shares and the issuance of convertible bonds do not constitute a disposition of company property, a transfer of shares or an alteration in the status of members within the meaning of section 182; therefore section 182 is not engaged and the court has no jurisdiction to grant a validation order in respect of those instruments; the summons for validation is dismissed.

Citation
[2021] HKCFI 247
Parties
Company: China Ocean Industry Group Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
29 January 2021
Case Number
HCCW230/2019
Procedural Posture
Companies Winding Up Proceedings; Validation Order Application Under Section 182 of the Companies (winding Up and Miscellaneous Provisions) Ordinance (cap 32) / Chambers Decision of the Court of First Instance (decision Dated 29 January 2021)
Outcome
Summons dismissed; no order as to costs; court confirmed absence of validation order does not prevent the company proceeding with issuance of the new shares and convertible bond.
Legal Topics
Validation Order, Section 182, Issue of New Shares, Convertible Bonds, Alteration in Status of Members
Source Language
EN
Company Law Insolvency Law Validation Order Section 182 Issue of New Shares Convertible Bonds Alteration in Status of Members

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Parties

China Ocean Industry Group Limited

Company

Procedural Posture

Companies Winding Up Proceedings; Validation Order Application Under Section 182 of the Companies (winding Up and Miscellaneous Provisions) Ordinance (cap 32) / Chambers Decision of the Court of First Instance (decision Dated 29 January 2021)

Legal Issues

  1. 1 Whether section 182 is engaged by the proposed issue of new shares
  2. 2 Whether the proposed issue of convertible bonds engages section 182
  3. 3 Whether the court has jurisdiction to grant a validation order in respect of the proposed fund raising

Ratio Decidendi

The issue or allotment of new shares and the issuance of convertible bonds do not constitute a disposition of company property, a transfer of shares or an alteration in the status of members within the meaning of section 182; therefore section 182 is not engaged and the court has no jurisdiction to grant a validation order in respect of those instruments; the summons for validation is dismissed.

Court Disposition

Summons dismissed; no order as to costs; court confirmed absence of validation order does not prevent the company proceeding with issuance of the new shares and convertible bond.

Orders

  • Summons dated 19 January 2021 dismissed
  • No order as to costs