Your World of Legal Intelligence
 Hong Kong | 1-800-335-6202

The Joint & Several Liquidators Of Kong Wah Holdings Ltd (In Compulsory Liquidation) v James Henry Ting

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date13 April 2005
Judgement NumberCACV305/2004
Citation[2005] 1 HKLRD 847
CourtCourt of Appeal (Hong Kong)
Subject MatterCivil Appeal
CACV000304/2004 THE JOINT & SEVERAL LIQUIDATORS OF KONG WAH HOLDINGS LTD (IN COMPULSORY LIQUIDATION) v. JAMES HENRY TING

cacv 304/2004 & CACV 305/2004

CACV 304/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 304 of 2004

(on appeal from HCCW NO. 49 of 2000)

_________________________

IN THE MATTER of Kong Wah Holdings Limited (In Compulsory Liquidation)
and
IN THE MATTER of S. 221, Companies Ordinance, Chapter 32

_________________________

BETWEEN

THE JOINT & SEVERAL LIQUIDATORS OF Applicants
KONG WAH HOLDINGS LIMITED
(IN COMPULSORY LIQUIDATION)
and
JAMES HENRY TING Respondent

_________________________

AND

CACV 305/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 305 of 2004

(on appeal from HCCW NO. 50 of 2000)

_________________________

IN THE MATTER of AKAI HOLDINGS LIMITED (IN COMPULSORY LIQUIDATION)
and
IN THE MATTER of S. 221, Companies Ordinance, Chapter 32

_________________________

BETWEEN

THE JOINT & SEVERAL LIQUIDATORS OF Applicants
AKAI HOLDINGS LIMITED
(IN COMPULSORY LIQUIDATION)
and
JAMES HENRY TING Respondent

_________________________

(Heard together)

Before: Hon Ma CJHC and Rogers VP in Court

Date of Hearing: 22 March 2005

Date of Judgment: 22 March 2005

Date of Handing Down Reasons for Judgment: 13 April 2005

_________________________

REASONS FOR JUDGMENT

_________________________

Hon Ma CJHC:

1. I agree with the reasons as contained in the judgment of Rogers VP for dismissing the present appeals.

Hon Rogers VP:

2. These were two appeals from a judgment and orders of Madam Justice Kwan given on 7 September 2004. The application before the judge was that the examination of the respondent under section 221 of the Companies Ordinance, Cap. 32, which had previously been sought, should be dismissed or stayed. The judge dismissed that application and ordered that the respondent should attend court on a date to be fixed to be examined on oath concerning the affairs of two companies namely Akai Holdings Limited (“AHL”) and Kong Wah Holdings Limited (“Kong Wah”) and that he should produce to the liquidators all documents relating to those companies and their subsidiaries in his custody or power. The judge also made provision as to costs. At the conclusion of the hearing of these appeals, these appeals were dismissed with costs, with reasons to be given in writing.

Background

3. AHL was a company listed on the Hong Kong Stock Exchange and from 1996 it was the parent company of a wholly-owned subsidiary Kong Wah, which had previously been listed on the stock exchange. In turn these companies had, until 1999, been within a group of companies, of which the parent was Semi-Tech Corporation Limited (“STC”). That company had been listed in New York apart from other jurisdictions. AHL and Kong Wah were wound up by orders dated 23 August 2000. As the judge recorded, the AHL insolvency constituted the largest corporate insolvency ever in Hong Kong. The group appeared to have liabilities in excess of US$1 billion and few remaining assets which could be realised for the benefit of the creditors. In the annual report of AHL for 1996, the STC group was described as an international business comprising numerous public companies listed on the world’s leading stock exchanges, with market capitalisations aggregating US$4.5 billion (equivalent to about HK$35 billion), and employing 100,000 people in over 120 countries worldwide.

4. Most of the key directors and executives of the AHL Group have left Hong Kong or were uncooperative with the liquidators and their requests for assistance. The companies that were involved in the management of AHL and Kong Wah have all refused to provide any meaningful assistance. The investigation of the financial affairs of AHL and Kong Wah has been severely hampered by the lack of sufficient books and records. Although 650 boxes of records have since been taken into possession in relation to AHL and 1,800 boxes in relation to Kong Wah, in the light of the size of the businesses of those companies, there are clearly grounds to believe that these do not constitute all the books and records.

5. The respondent was the chairman and chief executive of AHL. He is said to be the most important and crucial person who could provide information to the liquidators. In the principal supporting affidavit in this application, the liquidators have identified 18 areas of concern involving substantial sums in respect of which they require information from the respondent. Some of the matters referred to in the affidavit went back to 1998, so claims in relation to which the respondent’s assistance is required would become time-barred against third parties fairly soon, unless protective writs are issued by the liquidators or unless the liquidators are able to postpone the limitation period by virtue of fraud, concealment or mistake. There is clearly a need for the liquidators to be assisted by the respondent who can be expected to have knowledge of the events and transactions, which contributed to the collapse of the AHL Group. It is said, and the judge accepted, that the provision of a statement of affairs by answers in writing to a questionnaire could not be considered adequate in the circumstances.

6. On 2 May 2003, the respondent was charged with an offence of false accounting under section 19(1)(a) of the Theft Ordinance, Cap. 210. On 5 March 2004, four additional charges of false accounting were laid against him. All the charges relate to dealings concerning MicroMain Systems Limited (“MicroMain”) and shares in that company. The trial of those charges is scheduled to commence on 3 May 2005 and last until 7 June 2005. Meanwhile the examination under section 221 of the Companies Ordinance is scheduled to commence on 13 June 2005.

The judgment below

7. In the judgment below the judge came to the conclusion that section 221 of the Companies Ordinance permitted the examination to take place notwithstanding the common law privilege against self-incrimination which, as far as testimony is concerned, is now enshrined in Article 11(2)(g) of the Bill of Rights. She went on, however, to refer also to section 33(1) of the Theft Ordinance, Cap. 210. In paragraph 53 of her judgment the judge referred to the fact that the “compensatory protection” under section 33(1) provided a safeguard which was not “a disproportionate response to a serious social problem” and struck a fair balance between the general interest of the community and the protection of the rights of the individual. In those circumstances the judge permitted the examination to go ahead.

These appeals

8. On this appeal Mr Pannu, who appeared on behalf of the respondent, sought an order that the examination under section 221 should be stayed, but not dismissed, until the delivery of the verdicts in the existing criminal proceedings and in any further criminal proceedings also relating to the AHL and Kong Wah companies on the grounds that the section 221 proceedings are oppressive and/or an abuse of the process because they put in jeopardy the respondent’s common law privilege against self-incrimination and that the proceedings contravene Article 11(2)(g) of the Bill of Rights Ordinance, Cap. 383. The argument really fell into two parts. The first part related to the criminal charges in the imminent trial and the events involving MicroMain. The second part related to the remaining 17 heads of inquiry referred to in the affidavit filed on behalf of the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT