Relevant employees whose shares in China Shanshui Investment Company Limited held by ZHANG CAIKUI on trust (Please refer to Schedule 1 attached to the Writ of Summons for names of the relevant employees) AND ANOTHER v. ZHANG CAIKUI AND ANOTHER

Relevant employees whose shares in China Shanshui Investment Company Limited held by ZHANG CAIKUI on trust (Please refer to Schedule 1 attached to the Writ of Summons for names of the relevant employees) AND ANOTHER v. ZHANG CAIKUI AND ANOTHER

The application for directions was dismissed because applicants failed to meet the heavy onus to show lack of good faith or legal error by the receivers; the general mandate's grant did not by itself threaten immediate dilution; the receivers had undertaken not to vote to dilute CSI and there was no cogent evidence of conspiracy or imminent exercise warranting court intervention at this interlocutory stage.

Citation
Relevant employees whose shares in China Shanshui Investment Company Limited held by ZHANG CAIKUI on trust (Please refer to Schedule 1 attached to the Writ of Summons for names of the relevant employees) AND ANOTHER v. ZHANG CAIKUI AND ANOTHER
Parties
Applicants: Five Plaintiffs; Receivers: Receivers; 1st Defendant: 1st Defendant; Plaintiffs: Plaintiffs (represented by K&L Gates)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 June 2017
Case Number
HCA1766/2014
Procedural Posture
Application for Directions to Receivers / Urgent Chambers Hearing — Application Dismissed
Outcome
Application dismissed with costs; certificate for two counsel for the receivers.
Legal Topics
Receivership Duties, Conflict of Interest, Share Issuance Mandate, Shareholder Dilution, Court Directions to Officers of the Court, AGM Voting
Source Language
EN
Company Law Corporate Governance Receivership Equity and Trusts Receivership Duties Conflict of Interest Share Issuance Mandate Shareholder Dilution +2 more

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Parties

Five Plaintiffs

Applicants

Receivers

Receivers

1st Defendant

1st Defendant

Plaintiffs (represented by K&L Gates)

Plaintiffs

Procedural Posture

Application for Directions to Receivers / Urgent Chambers Hearing — Application Dismissed

Legal Issues

  1. 1 Whether the court should direct court‑appointed receivers to exercise voting rights to prevent a board general mandate to allot shares
  2. 2 Whether the receivers are in a conflict of duties arising from their positions as receivers of CSI shares and as directors of CSCG
  3. 3 Whether there is sufficient basis to intervene in the day‑to‑day decisions of receivers given the heavy onus on challengers

Ratio Decidendi

The application for directions was dismissed because applicants failed to meet the heavy onus to show lack of good faith or legal error by the receivers; the general mandate's grant did not by itself threaten immediate dilution; the receivers had undertaken not to vote to dilute CSI and there was no cogent evidence of conspiracy or imminent exercise warranting court intervention at this interlocutory stage.

Court Disposition

Application dismissed with costs; certificate for two counsel for the receivers.

Orders

  • Application dismissed with costs
  • Certificate for two counsel for the receivers