RE TARGET SONIC LTD

RE TARGET SONIC LTD

All statutory requirements were met: the articles authorised the reduction, a unanimous special resolution was passed, shareholders were properly informed, audited and management accounts showed permanent losses exceeding the reduction so creditors would not be prejudiced, and the reduction served a recognised purpose under s.58(1)(b); accordingly the court confirmed the capital reduction subject to a minor amendment to the minutes.

Citation
RE TARGET SONIC LTD
Parties
Petitioner (company): Target Sonic Limited; Shareholder: Sadao Yamamoto; Shareholder: Taiwan Shoko Co. Ltd; Shareholder: Shokosha Co. Ltd; Shareholder: Shindo Co. Ltd
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 February 2004
Case Number
HCMP5572/2003
Procedural Posture
Companies Ordinance Petition (capital Reduction) / Judgment (confirmation of Capital Reduction)
Outcome
Petition granted — court confirmed the reduction of share capital and approved the minutes subject to a minor amendment.
Legal Topics
Reduction of Capital, Shareholder Approval, Creditors' Protection, Special Resolution, Companies Ordinance Ss.58 60
Source Language
EN
Company Law Corporate Finance Insolvency Law Reduction of Capital Shareholder Approval Creditors' Protection Special Resolution Companies Ordinance Ss.58 60

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Parties

Target Sonic Limited

Petitioner (company)

Sadao Yamamoto

Shareholder

Taiwan Shoko Co. Ltd

Shareholder

Shokosha Co. Ltd

Shareholder

Shindo Co. Ltd

Shareholder

Procedural Posture

Companies Ordinance Petition (capital Reduction) / Judgment (confirmation of Capital Reduction)

Legal Issues

  1. 1 Whether statutory requirements for reduction of capital under s.58 were satisfied
  2. 2 Whether shareholders were treated equitably
  3. 3 Whether shareholders were properly informed

Ratio Decidendi

All statutory requirements were met: the articles authorised the reduction, a unanimous special resolution was passed, shareholders were properly informed, audited and management accounts showed permanent losses exceeding the reduction so creditors would not be prejudiced, and the reduction served a recognised purpose under s.58(1)(b); accordingly the court confirmed the capital reduction subject to a minor amendment to the minutes.

Court Disposition

Petition granted — court confirmed the reduction of share capital and approved the minutes subject to a minor amendment.

Orders

  • Capital reduction confirmed: authorised capital reduced from HK$38,100,000 to HK$28,100,000 by cancelling 10,000,000 issued shares.
  • Approve minutes proposed to be registered subject to one minor amendment.