Did you know that a major shareholder can obtain relief pursuant
to section 168A of the Companies Ordinance (Cap 32) (CO), a
provision traditionally used by minority shareholders to seek an
alternative remedy to winding-up in cases of unfair prejudice?
In the recent matter of Luck Continent Ltd v. Cheng Chee Tock
Theodore1, the Court of Appeal (CA) confirmed the
decision of Barma J (as he then was) in the court below2
that the major shareholder (holding 46.58% issued shares) of a Hong
Kong listed company is entitled to relief pursuant to section 168A
CO. Section 168A(1) CO relevantly provides:
Any member of a specified corporation who complains that the
affairs of the specified corporation are being or have been
conducted in a manner unfairly prejudicial to the interests of the
members generally or of some part of the members (including
himself)...may make an application to the court by petition for an
order under this section.
Section 168A(2) provides the court with a broad discretion to
make such orders as it thinks fit so as to bring an end to the
matters complained of. In granting the relief sought by the major
shareholder, Lam JA with whom the CA agreed, confirmed:
...s.168A itself has not limited its application to minority
shareholder or small companies. Whether it is adaptable to deal
with unfairness in large listed companies is one of the contentious
issues in this appeal. In principle, the question should hinge on
whether unfairness can be established as opposed to whether the
company is a small company or a large listed
His Lordship's comments echo those of Barma J (as he then
was) that "[u]nusually for proceedings under section 168A,
these proceedings are brought in respect of a publicly listed
company. Also somewhat unusually, they are brought by the
company's major shareholder"4 but that a major
shareholder is not precluded from utilising this CO provision.
On the facts, the CA agreed with the court below that the
minority shareholders' blocking of a motion to amend the listed
company's bye-laws did constitute unfairly prejudicial conduct
by the minority shareholders. Among other things, the
minorities' exercise of their voting power was contrary to what
the parties had agreed and a breach of a fundamental understanding
between the shareholders that the company should maintain its
listing status. The blocking of the motion was especially
significant as the listed company's shares had been suspended
from trading (for reasons unconnected with the bye-laws issue) and
the suspension would unlikely be lifted until all regulatory
concerns, including the failure to amend the bye-laws, were
1  4 HKLRD 181
2 Luck Continent Ltd v. Cheng Chee Tock Theodore and Others 
3 4 HKLRD 181 at 200 4  HKCFI 571 at para.3
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A guide which outlines the procedures to wind up Jersey registered companies, the circumstances in which transactions entered into by an insolvent company may be set aside, and the circumstances in which a company’s officers and managers may incur civil or criminal liability.
issue a certificate of dissolution in the approved form certifying that the company has been dissolved.
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