RE PROMAN INTERNATIONAL LTD

RE PROMAN INTERNATIONAL LTD

The Deloitte Candidates made materially incorrect disclosures under ss262B and 262D of Cap 32 (notably as to the timing of audit engagements and DAHK advisory relationships) and failed to provide satisfactory evidence to dispel the inaccuracies; therefore they were disqualified and the court, exercising its discretion (including discounting affiliated votes), appointed the PwC Candidates as liquidators and refused retrospective leave to validate Deloitte's position.

Citation
[2023] HKCFI 2628
Parties
Company: Proman International Limited; Appellant/creditor: Seashore Global Group Limited; Petitioner/creditor: Bank of China Limited (including Shenzhen and Tianjin branches); Proposed Liquidators: PricewaterhouseCoopers Ltd (PwC Candidates); Proposed Liquidators: Deloitte Touche Tohmatsu (Deloitte Candidates); Official Receiver: Official Receiver
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
11 October 2023
Case Number
HCCW215/2021
Procedural Posture
Companies (winding Up) Proceedings / Appeal From Master's Appointment of Liquidators (reasons for Decision)
Outcome
Appeal dismissed. PwC Candidates appointed as liquidators. Deloitte Candidates disqualified. Retrospective leave application dismissed with costs.
Legal Topics
Appointment of Liquidators, Conflict of Interest, Statutory Disclosure Obligations (s262 B, S262 D Cap 32), Judicial Discretion in Voting Disputes, Retrospective Leave to Act
Source Language
EN
Company Law Insolvency Law Procedural Law Appointment of Liquidators Conflict of Interest Statutory Disclosure Obligations (s262 B, S262 D Cap 32) Judicial Discretion in Voting Disputes Retrospective Leave to Act

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Parties

Proman International Limited

Company

Seashore Global Group Limited

Appellant/creditor

Bank of China Limited (including Shenzhen and Tianjin branches)

Petitioner/creditor

PricewaterhouseCoopers Ltd (PwC Candidates)

Proposed Liquidators

Deloitte Touche Tohmatsu (Deloitte Candidates)

Proposed Liquidators

Official Receiver

Official Receiver

Procedural Posture

Companies (winding Up) Proceedings / Appeal From Master's Appointment of Liquidators (reasons for Decision)

Legal Issues

  1. 1 Whether Deloitte Candidates were disqualified under section 262B of Cap 32 for acting within the relevant two year period
  2. 2 Whether relationships existed under section 262D(2) of Cap 32 that required disclosure and disqualified Deloitte Candidates
  3. 3 Whether the court should defer to the majority creditor vote or exercise its discretion to appoint alternative liquidators

Ratio Decidendi

The Deloitte Candidates made materially incorrect disclosures under ss262B and 262D of Cap 32 (notably as to the timing of audit engagements and DAHK advisory relationships) and failed to provide satisfactory evidence to dispel the inaccuracies; therefore they were disqualified and the court, exercising its discretion (including discounting affiliated votes), appointed the PwC Candidates as liquidators and refused retrospective leave to validate Deloitte's position.

Court Disposition

Appeal dismissed. PwC Candidates appointed as liquidators. Deloitte Candidates disqualified. Retrospective leave application dismissed with costs.

Orders

  • Appeal dismissed with costs to Bank of China Ltd
  • PricewaterhouseCoopers Ltd appointed as joint liquidators of Proman International Limited