RE CHEUNG CHI MANG

RE CHEUNG CHI MANG

The Court found no genuine dispute on substantial grounds nor a crossclaim against the Petitioner capable of extinguishing the debt; the December facility’s purpose was to repay the Debtor and not margin financing under the SFO so illegality did not arise; the HT Group shares in the margin account were subject to HT Securities' prior rights and insufficient to satisfy HT Securities’ own indebtedness; the Company had sufficient Hong Kong connection and the core requirements for winding up a foreign company were met; accordingly the winding up order and bankruptcy order were granted and costs ordered nisi.

Citation
[2018] HKCFI 984
Parties
Petitioner: Haitong International Finance Company Limited; Respondent/company: 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
HCB1361/2017
Procedural Posture
Winding Up and Bankruptcy Petitions / Judgment
Outcome
Winding up order made against Hong Kong Investments Group Limited; usual bankruptcy order made against Cheung Chi Mang; costs order nisi to the Petitioner, to be taxed if not agreed, with certificate for two counsel.
Legal Topics
Winding Up, Bankruptcy Order, Statutory Demand, Bona Fide Dispute, Crossclaim, Unlicensed Securities Margin Financing, Jurisdiction Over Foreign Company, Guarantee
Source Language
EN
Company Law Bankruptcy Securities Regulation Contract Civil Procedure Winding Up Bankruptcy Order Statutory Demand +5 more

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Parties

Haitong International Finance Company Limited

Petitioner

Hong Kong Investments Group Limited

Respondent/company

Cheung Chi Mang

Debtor/respondent

Procedural Posture

Winding Up and Bankruptcy Petitions / Judgment

Legal Issues

  1. 1 Whether there is a bona fide dispute on substantial grounds to the petition debt
  2. 2 Whether crossclaims against related group companies extinguish the petition debt absent mutuality
  3. 3 Whether the December facility constituted unlicensed securities margin financing under the SFO rendering the loan illegal and unenforceable

Ratio Decidendi

The Court found no genuine dispute on substantial grounds nor a crossclaim against the Petitioner capable of extinguishing the debt; the December facility’s purpose was to repay the Debtor and not margin financing under the SFO so illegality did not arise; the HT Group shares in the margin account were subject to HT Securities' prior rights and insufficient to satisfy HT Securities’ own indebtedness; the Company had sufficient Hong Kong connection and the core requirements for winding up a foreign company were met; accordingly the winding up order and bankruptcy order were granted and costs ordered nisi.

Court Disposition

Winding up order made against Hong Kong Investments Group Limited; usual bankruptcy order made against Cheung Chi Mang; costs order nisi to the Petitioner, to be taxed if not agreed, with certificate for two counsel.

Orders

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