RE HONG KONG INVESTMENTS GROUP LTD

RE HONG KONG INVESTMENTS GROUP LTD

The Court concluded the Company failed to show a genuine dispute on substantial grounds or a crossclaim with mutuality; the December Facility Agreement's purpose was to repay existing indebtedness not to provide securities margin financing so illegality under the SFO did not arise; HT Securities had priority over the margin account assets which were insufficient to satisfy HT Securities and thus unavailable to the Petitioner; the Company had sufficient connection with Hong Kong and the Court properly exercised its discretion to wind up the Company and make a bankruptcy order against the Debtor.

Citation
[2018] HKCFI 984
Parties
Petitioner: Haitong International Finance Company Limited; Company (respondent): Hong Kong Investments Group Limited; Debtor (respondent): Cheung Chi Mang
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 May 2018
Case Number
HCCW63/2017
Procedural Posture
Winding Up Petition and Bankruptcy Petition / Judgment on Petitions
Outcome
Winding up order made against Hong Kong Investments Group Limited; usual bankruptcy order made against Cheung Chi Mang; costs awarded to the Petitioner (nisi).
Legal Topics
Statutory Demand, Winding Up, Bankruptcy Order, Bona Fide Dispute, Crossclaim, Securities Margin Financing, Illegal/unlicensed Activity, Jurisdiction Over Foreign Company, Guarantee
Source Language
EN
Insolvency Company Law Bankruptcy Securities Regulation Contract Civil Procedure Statutory Demand Winding Up +7 more

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Parties

Haitong International Finance Company Limited

Petitioner

Hong Kong Investments Group Limited

Company (respondent)

Cheung Chi Mang

Debtor (respondent)

Procedural Posture

Winding Up Petition and Bankruptcy Petition / Judgment on Petitions

Legal Issues

  1. 1 Whether there is a genuine bona fide dispute on substantial grounds to the debt alleged by the Petitioner
  2. 2 Whether the Company's asserted crossclaim against third parties extinguishes or defeats the Petition
  3. 3 Whether the December Facility Agreement was unenforceable as unlicensed securities margin financing under the SFO

Ratio Decidendi

The Court concluded the Company failed to show a genuine dispute on substantial grounds or a crossclaim with mutuality; the December Facility Agreement's purpose was to repay existing indebtedness not to provide securities margin financing so illegality under the SFO did not arise; HT Securities had priority over the margin account assets which were insufficient to satisfy HT Securities and thus unavailable to the Petitioner; the Company had sufficient connection with Hong Kong and the Court properly exercised its discretion to wind up the Company and make a bankruptcy order against the Debtor.

Court Disposition

Winding up order made against Hong Kong Investments Group Limited; usual bankruptcy order made against Cheung Chi Mang; costs awarded to the Petitioner (nisi).

Orders

  • Winding up order against Hong Kong Investments Group Limited
  • Usual bankruptcy order against Cheung Chi Mang