LI GUOZHU v. NEW CENTURY IATRICAL INV. MANAGEMENT LTD AND OTHERS

LI GUOZHU v. NEW CENTURY IATRICAL INV. MANAGEMENT LTD AND OTHERS

The respondents engaged in a coordinated conspiracy to misrepresent the sale price to defeat the petitioner’s contractual pre-emption rights and procured breaches by other shareholders, thereby wresting control and excluding the petitioner from management; those actions constituted conduct of the Company’s affairs...

Source-derived case information.

Citation
[2018] HKCFI 868
Parties
Petitioner: LI GUOZHU; 1st Respondent: NEW CENTURY IATRICAL INV. MANAGEMENT LIMITED; 2nd Respondent: SHU WEIMIN; 3rd Respondent: MA HONGQI; 4th Respondent: CAI HONGMING
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
26 April 2018
Case Number
HCMP3353/2014
Procedural Posture
Companies Ordinance S724 725 Petition (unfair Prejudice) / Judgment (court of First Instance)
Outcome
Petition allowed in part. Court ordered respondents to sell their shares to petitioner; respondents declared each entitled to one-seventh share; certain transfers set aside; buy-out valuation to be by valuer at date of judgment; damages refused; costs reserved as ordered nisi.
Legal Topics
Unfair Prejudice, Buy Out Order, Share Valuation, Pre Emption Rights, Share Transfers, Dividend Distribution, False Evidence/affirmation
Source Language
en
Company Law Equity Contract Law Civil Procedure Cross Border/mainland Law Unfair Prejudice Buy Out Order Share Valuation +4 more

Source-derived case record

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 11 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

LI GUOZHU

Petitioner

NEW CENTURY IATRICAL INV. MANAGEMENT LIMITED

1st Respondent

SHU WEIMIN

2nd Respondent

MA HONGQI

3rd Respondent

CAI HONGMING

4th Respondent

Procedural Posture

Companies Ordinance S724 725 Petition (unfair Prejudice) / Judgment (court of First Instance)

Legal Issues

  1. 1 Whether the respondents conducted the affairs of the Company in a manner unfairly prejudicial to the petitioner
  2. 2 Whether breach of pre-emption rights and procuring other shareholders to renege constituted conduct of the company's affairs
  3. 3 Whether petitioner committed misconduct (embezzlement) sufficient to justify respondents' conduct

Ratio Decidendi

The respondents engaged in a coordinated conspiracy to misrepresent the sale price to defeat the petitioner’s contractual pre-emption rights and procured breaches by other shareholders, thereby wresting control and excluding the petitioner from management; those actions constituted conduct of the Company’s affairs that was unfairly prejudicial. The appropriate remedy is a court-ordered buy-out of the respondents’ shares by the petitioner at a fair value to be determined by a valuer with valuation date as the date of judgment; contractual Preamble 4 valuation was not applied and damages were refused.

Court Disposition

Petition allowed in part. Court ordered respondents to sell their shares to petitioner; respondents declared each entitled to one-seventh share; certain transfers set aside; buy-out valuation to be by valuer at date of judgment; damages refused; costs reserved as ordered nisi.

Orders

  • 2nd, 3rd and 4th respondents to sell all their shares in the Company to the petitioner at a price to be determined by a valuer or joint valuers
  • Parties to confer on appointment of valuer(s); in default, nominate candidates and seek court directions