LEUNG CHUN WAH v. WILLAS-ARRAY (KOREA) HONG KONG LTD

LEUNG CHUN WAH v. WILLAS-ARRAY (KOREA) HONG KONG LTD

Relief was granted to regularise the breaches for all respondent companies because on the evidence the contraventions were, overall, inadvertent or isolated, affected shareholders either had knowledge of the companies' financial positions or were not prejudiced, and adequate measures (auditors, company secretarial advice, proposed independent directors and audit committee) were in place to ensure future compliance, such that the court properly exercised its discretion under s111 and s122 to grant relief.

Citation
LEUNG CHUN WAH v. WILLAS-ARRAY (KOREA) HONG KONG LTD
Parties
Applicant: Leung Chun Wah; Applicant: Kwok Chan Cheung; Respondent: Array Electronics (China) Limited; Respondent: Willas-Array Electronics (Hong Kong) Limited; Respondent: Valence Technology Limited; Respondent: Valence Semiconductor Design Limited; Respondent: ASP Microelectronics Limited; Respondent: Full Link Investment Limited; Respondent: LEC Electronic Components Limited; Respondent: Kind Faith Limited; Respondent: Elite Vantage Limited; Respondent: Joy Port Limited; Respondent: Bestime Corporation Limited; Respondent: Array Electronics Limited; Respondent: Brightway Transportation Limited; Respondent: Willas-Array Electronics Management Limited; Respondent: Willas-Array (Korea) Hong Kong Limited; Respondent: Willas-Array Investments Limited; Respondent: Aries Tech Hong Kong Limited; Respondent: Willas Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
12 November 2013
Case Number
HCMP1503/2013
Procedural Posture
Applications Under Companies Ordinance Sections 111 and 122 to Regularise Non Compliance / Heard Together in Chambers; Reasons for Decision Delivered
Outcome
Court exercised its discretion and granted orders to regularise non-compliance under sections 111 and 122 in respect of the respondent companies in Groups I, II and III
Legal Topics
Section 111 AGM Requirements, Section 122 Accounts and Balance Sheet Requirements, Court Discretion to Regularise Statutory Defaults, Listing Due Diligence Consequences
Source Language
EN
Company Law Corporate Governance Equity and Remedies Section 111 AGM Requirements Section 122 Accounts and Balance Sheet Requirements Court Discretion to Regularise Statutory Defaults Listing Due Diligence Consequences

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Parties

Leung Chun Wah

Applicant

Kwok Chan Cheung

Applicant

Array Electronics (China) Limited

Respondent

Willas-Array Electronics (Hong Kong) Limited

Respondent

Valence Technology Limited

Respondent

Valence Semiconductor Design Limited

Respondent

ASP Microelectronics Limited

Respondent

Full Link Investment Limited

Respondent

LEC Electronic Components Limited

Respondent

Kind Faith Limited

Respondent

Elite Vantage Limited

Respondent

Joy Port Limited

Respondent

Bestime Corporation Limited

Respondent

Array Electronics Limited

Respondent

Brightway Transportation Limited

Respondent

Willas-Array Electronics Management Limited

Respondent

Willas-Array (Korea) Hong Kong Limited

Respondent

Willas-Array Investments Limited

Respondent

Aries Tech Hong Kong Limited

Respondent

Willas Company Limited

Respondent

Procedural Posture

Applications Under Companies Ordinance Sections 111 and 122 to Regularise Non Compliance / Heard Together in Chambers; Reasons for Decision Delivered

Legal Issues

  1. 1 Whether court should exercise its discretion under s111(2) and s122(1B) to regularise longstanding breaches
  2. 2 Whether the breaches were inadvertent or indicative of indifference/wilful default
  3. 3 Whether affected shareholders were prejudiced or had requisite awareness

Ratio Decidendi

Relief was granted to regularise the breaches for all respondent companies because on the evidence the contraventions were, overall, inadvertent or isolated, affected shareholders either had knowledge of the companies' financial positions or were not prejudiced, and adequate measures (auditors, company secretarial advice, proposed independent directors and audit committee) were in place to ensure future compliance, such that the court properly exercised its discretion under s111 and s122 to grant relief.

Court Disposition

Court exercised its discretion and granted orders to regularise non-compliance under sections 111 and 122 in respect of the respondent companies in Groups I, II and III

Orders

  • Relief granted under Companies Ordinance s111(2) and s122(1B) to regularise the defaults identified in the originating summonses for the respondent companies listed in the reasons for decision
  • Reasons for decision handed down 12 November 2013