Hong Kong Case Law: Decisions & Judgments

Topic

Share allotment and dilution

Legal area

Court

8 Aug 2024

TSE YUN LAM ARIES (formerly known as TSE CHEE LAM ARIES) v. HAINE INTERNATIONAL INVESTMENT CONSULTANTS LTD AND OTHERS

Citation

[2024] HKCFI 2070
Court

Court of First Instance
Case number

HCMP1747/2020

The Jinheng-controlled directors exercised the power to allot shares for an improper purpose—dilution of minority shareholders—without genuine documented need, imposed unreasonable subscription terms, failed to convene AGMs or lay proper consolidated accounts, and withheld required documents; the allotments were therefore voidable and unfairly prejudicial under s.724 CO; a buy-out order would be futile given respondents' admitted inability to fund compliance and the lack of reliable financial information, so the appropriate relief is to set aside the allotments, order repayment of subscriptio…
4 Dec 2015

ANTHONY A SPERANDEO v. GEORGE LENCSAK BARRINGTON STUDIOS LTD

Citation

ANTHONY A SPERANDEO v. GEORGE LENCSAK BARRINGTON STUDIOS LTD
Court

Court of First Instance
Case number

HCMP1022/2013

Exclusion from management was not unfairly prejudicial on the evidence because the petitioner had been bought out of Barrington US and the Hong Kong company's commercial value derived from Barrington US such that exclusion was commercially neutral; however the allotment of 774,999 shares in October 2011 was artificial (the US$100,000 deposit was held personally by the 1st Respondent) and constituted an unfair dilution and must be set aside; appropriate relief is a buy‑out by the 1st Respondent with valuation as at 31 December 2011 without minority discount.
22 Sept 2010

PENG HUI ZHOU v. HONG KONG TACHIBANA ELECTRONICS CO LTD AND OTHERS

Citation

PENG HUI ZHOU v. HONG KONG TACHIBANA ELECTRONICS CO LTD AND OTHERS
Court

Court of First Instance
Case number

HCMP1080/2008

The court rejected the petitioner's factual case that there was an agreement to remunerate him by dividends and that a quasi‑partnership existed; the shares were given as a customary recognition at par pursuant to Japanese practice and no enforceable expectation to dividends or management rights was proven; therefore the conduct complained of was not unfairly prejudicial under s168A and the petition was dismissed.
22 Jun 2001

WONG MAN YIN v. LAW LAM WAI AND OTHERS

Citation

WONG MAN YIN v. LAW LAM WAI AND OTHERS
Court

Court of First Instance
Case number

HCA6260/1997

The court held that, although procedural irregularities and some allotments occurred, those allotments did not amount to unfair prejudice because petitioner had been offered shares and chose not to subscribe and had initially agreed to capital increases; however, the directors' payment of very large emoluments combined with persistent failure to distribute profits and systematic failures to keep a non‑participating substantial shareholder informed amounted to conduct unfairly prejudicial under s168A, warranting the remedy of a compulsory purchase of the petitioner's shares by the majority sha…
18 Feb 2000

LAM SO YUK HANG MINNIE AND OTHERS v. SUPERYIELD HOLDINGS LTD. AND OTHERS

Citation

LAM SO YUK HANG MINNIE AND OTHERS v. SUPERYIELD HOLDINGS LTD. AND OTHERS
Court

Court of First Instance
Case number

HCMP6440/1998

Judge found on the evidence that the 2nd respondent arranged and provided the funds for the purchase of the Ascot Villa Property and was the beneficial owner of Superyield Holdings Ltd and Superyield Construction; the deceased was a nominee/director only and had no beneficial interest; any presumption of resulting trust was displaced by evidence and by the presumption of advancement in the familial relationship; accordingly the petition alleging unfair prejudice failed and must be dismissed.

Hong Kong Case Law

TSE YUN LAM ARIES (formerly known as TSE CHEE LAM ARIES) v. HAINE INTERNATIONAL INVESTMENT CONSULTANTS LTD AND OTHERS

ANTHONY A SPERANDEO v. GEORGE LENCSAK BARRINGTON STUDIOS LTD

PENG HUI ZHOU v. HONG KONG TACHIBANA ELECTRONICS CO LTD AND OTHERS

WONG MAN YIN v. LAW LAM WAI AND OTHERS

LAM SO YUK HANG MINNIE AND OTHERS v. SUPERYIELD HOLDINGS LTD. AND OTHERS