Re China Ocean Industry Group Ltd
Harris J in Chambers
29 January 2021

[Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32) s.182]

C, an insolvent company listed on the Main Board of the Stock Exchange of Hong Kong Ltd, applied for a validation order under s.182 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32) (the Ordinance) in respect of a fund-raising programme which involved the issue of new shares and convertible bonds.

Held, dismissing the application, that s.182 of the Ordinance was not engaged because issuing the new shares and convertible bonds did not involve any transfer of shares or alteration in the status of the members. Accordingly, the Court had no jurisdiction to validate the issue of the new shares and convertible bonds. The absence of a validation order did not prevent C from proceeding with issuing the new shares and convertible bonds (Re Sellers [2003] FCA 523, Inland Revenue Commissioners v Laird Group plc [2003] UKHL 54, Bank of China (Hong Kong) Ltd v Oasis HKTL 04A Ltd (HCA 763/2008, [2008] HKEC 2387), Lollback v Brakepower Pty Ltd [2010] NSWSC 1457, Seah Teong Kang v Seah Yong Chwan [2015] 5 SLR 792 applied; Singasia Holdings Ltd v 劉新生 [2019] HKCLC 1023, Re China Ocean Industry Group Ltd [2019] HKCLC 975 disapproved). (See paras.3, 5–10, 12–13.)

Application

This was the subject company’s application for a validation order under s.182 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32).

Jurisdictions: