Borrelli & Ors v Ting & Ors (Bermuda)

[2010] UKPC 21

Privy Council Appeal No 0049 of 2009

Lord Saville of Newdigate:

1.               James Henry Ting was formerly the Chairman and Chief Executive Officer of Akai Holdings Ltd, a Bermudan company originally incorporated in Hong Kong. Akai Holdings Ltd controlled a multinational group of companies specializing in electronics. The assets of the Akai group of companies were reported in January 1999 to exceed US$2 billion. However, in late 1999 Akai Holdings Ltd collapsed with an estimated net asset deficiency of over US$1 billion. On 23 August 2000 in Hong Kong, and on 29 September 2000 in Bermuda, Akai Holdings Ltd was ordered to be wound up.

2.               The Liquidators of Akai Holdings were hampered in their investigation of the affairs of Akai Holdings Ltd by the absence of books and records; by the failure of James Henry Ting, despite many requests by the Liquidators, to provide them with any assistance; and by the fact that there were scant resources to fund the liquidation.

3.               In order to raise funds, the Liquidators wished to realize the value of Akai Holdings Ltd's listing on the Hong Kong Stock Exchange. To this end the Liquidators proposed a scheme of arrangement under section 99 of the Bermuda Companies Act 1981, whereby the shares of Akai Holdings Ltd, and thus its listing status, would be transferred to a third party, Hang Ten Group Holdings Ltd. Such a scheme would raise approximately HK$46.6 million, but required the approval of a majority in number representing three quarters in value of the shareholders present and voting at a meeting convened for that purpose; and thereafter the sanction of the Court.

4.               The scheme meeting was convened in Hong Kong on 25 November 2002.

5.               James Henry Ting controlled two companies, Blossom Assets Ltd and Costner Holdings Ltd, who together held 5.2% of the issued share capital of Akai Holdings Ltd. The Liquidators took the view that James Henry Ting was likely to oppose the scheme for no good reason and in advance of the meeting obtained ex parte an order from the Bermuda Court that they could mark the votes of Blossom Assets Ltd and Costner Holdings Ltd as objected to, with a view to their validity being determined at a subsequent court hearing.

6.               At the scheme meeting Blossom Assets Ltd and Costner Holdings Ltd were represented by attorneys, who purported to act as proxies on behalf of…