KWOK CHAN CHEUNG v. LEC ELECTRONIC COMPONENTS LTD

KWOK CHAN CHEUNG v. LEC ELECTRONIC COMPONENTS LTD

The court granted relief under sections 111 and/or 122 for the respondent companies because on the evidence the contraventions were, on the whole, inadvertent or excusable (notably the 2007 accounts issue caused by auditor timing), affected shareholders were aware and not prejudiced, and robust measures were in place to ensure future compliance; in those circumstances the statutory discretion to regularise non-compliance should be exercised to remove impediments to the proposed Hong Kong listing.

Citation
KWOK CHAN CHEUNG v. LEC ELECTRONIC COMPONENTS 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
HCMP1495/2013
Procedural Posture
Applications for Relief Under Companies Ordinance (cap 32) Sections 111 and 122 / Application Heard; Reasons for Decision Delivered (post‑hearing Judgment)
Outcome
Relief granted to regularise past non-compliance under sections 111 and/or 122 for the respondent companies in Groups I, II and III
Legal Topics
Section 111 Companies Ordinance, Section 122 Companies Ordinance, Relief to Regularise Non Compliance, Annual General Meeting Requirements, Audited Financial Statements
Source Language
EN
Company Law Corporate Governance Civil Procedure Securities Regulation Section 111 Companies Ordinance Section 122 Companies Ordinance Relief to Regularise Non Compliance Annual General Meeting Requirements +1 more

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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 for Relief Under Companies Ordinance (cap 32) Sections 111 and 122 / Application Heard; Reasons for Decision Delivered (post‑hearing Judgment)

Legal Issues

  1. 1 Whether court should exercise discretion to grant relief under s111(2) and s122(1B) to regularise non-compliance
  2. 2 Whether breaches were inadvertent or the product of indifference
  3. 3 Whether affected shareholders were aware of financial position and suffered prejudice

Ratio Decidendi

The court granted relief under sections 111 and/or 122 for the respondent companies because on the evidence the contraventions were, on the whole, inadvertent or excusable (notably the 2007 accounts issue caused by auditor timing), affected shareholders were aware and not prejudiced, and robust measures were in place to ensure future compliance; in those circumstances the statutory discretion to regularise non-compliance should be exercised to remove impediments to the proposed Hong Kong listing.

Court Disposition

Relief granted to regularise past non-compliance under sections 111 and/or 122 for the respondent companies in Groups I, II and III

Orders

  • Court granted the relief sought to regularise non-compliance under section 111(2) and/or section 122(1B) of the Companies Ordinance for each respondent company in the listed proceedings