A corporate law comedy in 3 acts: Re Mingyuan Medicare Development Company Limited

On 22 May 2017, Mrs. Justice Lisa Wong of the Hong Kong Court of First Instance gave judgment in the case of Guangwei Worldwide Limited v Cheung et al, Re Mingyuan Medicare Development Company Limited [2017] HKCFI 900, by which she struck out a minority shareholder’s application to set aside the resolutions and results of an Annual General Meeting (and subsequent corporate actions taken in reliance on such resolutions).

Mingyuan Medicare Development Company Limited is a Bermuda exempt company which was incorporated in Bermuda under the Bermuda Companies Act 1981 (“Act”), and which holds a number of subsidiaries in the British Virgin Islands (“BVI”) and the People’s Republic of China (“PRC”) carrying on business in the provision of medicare solutions in the PRC. The shares of the Company are and were at all material times listed on the Main Board of The Hong Kong Stock Exchange Limited (“HKEx”) (with stock code 233).

The Company has been plagued by corporate controversies and disputes since at least 2014, resulting in litigation both in Bermuda and in Hong Kong. The judgments in both the Bermuda and Hong Kong litigation are fairly entertaining (at least for those with an interest in corporate litigation) – particularly in circumstances where neither the Bermuda Court nor the Hong Kong court seem to have been much impressed by the Company’s former Board of Directors’ management of the Company’s affairs …

As Kawaley CJ expressed himself (and as was echoed by Mrs. Justice Lisa Wong in striking out an application brought by a minority shareholder), “It is difficult to imagine, in a commercial context, a more flagrant disregard for Court Orders, or indeed the rule of law, on the part of a listed company”.

 

 

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