18 May 2023
On 15 May 2023 (with Reasons for Decision delivered on 18 May 2023), the Companies Court made a winding-up order against Dangdai International Investments Ltd (當代國際投資有限公司) (“the Company”) which is in turn wholly owned by Wuhan Dangdai Science & Technology Industries (Group) Company Ltd (武漢當代科技產業集團股份有限公司) (“Wuhan Dangdai”).
Wuhan Dangdai is a company established in the Mainland, which is described as one of the largest privately-owned diversified enterprises in Hubei Province with core business segments in pharmaceutical, real estate, cultural and tourism industry.
In granting the winding-up order at the first hearing, the Honourable Madam Justice Linda Chan considers that no good ground has been demonstrated in the evidence for any adjournment to be given. In particular, the Court does not accept that weight should be given to the creditors purportedly in support of the adjournment, not least because they consist of a related entity and the unrelated creditors far from constitute a substantial percentage of the relevant creditors. In the same vein, the Court does not see why the view of onshore creditors (of Wuhan Dangdai and its subsidiaries) should be taken into account in the winding-up proceedings concerning the Company.
Hence, her Ladyship concludes that, having regard to the state of the evidence and especially what the Company has achieved despite having been in default of payment for almost a year, not much purpose would be served by the proposed adjournment.
This latest judgment of the Companies Court reiterates the level of detail and particularity expected of any company seeking to resist an immediate winding-up order. It serves as an important reminder that an adjournment – even a first one – is never to be expected as a matter of course.
For a related Bloomberg article on the decision: see https://www.bloomberg.com/news/articles/2023-05-15/another-china-defaulter-gets-liquidation-order-as-pressure-grows?sref=6ZE6q2XR#xj4y7vzkg
For the judgment: see https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=152602&currpage=T
Michael Lok (led by Eva Sit SC) acted for the Petitioner.
José-Antonio Maurellet SC and Tom Ng acted for the Company.
This case highlight was authored by Charlie Liu.