Convoy appeal against shareholders rejectedFinance | Staff reporter 20 Oct 2021
The Court of Appeal has rejected the appeal application by Convoy Global Holdings against its major shareholders Kwok Hiu-kwan and Chen Peixiong.
Convoy was delisted by the Hong Kong Stock Exchange in May this year after a multi-year suspension.
In 2018, Convoy filed a writ to High Court to sue the two for purchasing 37.38 percent of its shares without the permission of the Securities and Futures Commission, which made them major shareholders of the company. The financial firm asked the court to rule that they violated the Securities and Futures Ordinance, and to ban them from exercising their voting rights as shareholders.
The Court of First Instance ruled in 2020 that Convoy should report the issue to SFC. The matter over their voting rights has been addressed in other court cases and will not be pursued further, the court stated. Convoy applied to appeal the case. The application was dismissed by the Court of Appeal on Tuesday.
The 29-year-old Kwok, co-president of Shenzhen-based Kaisa Group (1638), holds a 29.91 percent interest in Convoy while Chen, a former top manager of Kaisa, is the third-largest shareholder with 7.26 percent of shares, data before Convoy's delisting showed.
Richard Tsai Ming-hsing, vice chairman of Taiwan-based Fubon Group, owns the highest stake in Convoy if 29.98 percent, with his family.
This came as Kwok was banned by Convoy's then-chairman Johnny Chen Chi-wang from voting in an extraordinary general meeting to dismiss Convoy's ongoing board of directors and nominate new board members.
Johnny Chen was appointed by the Tsai family.
On August 13, three courts of appeal judges agreed that it would be appropriate to allow the younger Kwok to appeal to the Court of Final Appeal as they believed the case involves public interest, a breakthrough in Kwok's battle against Convoy - which he has been fighting since 2017.
The judgment said that while it had followed the English courts' approach by ruling that the chairman's decision could only be set aside if it was made in bad faith, Australian and New Zealand authorities have adopted a different approach.
Kwok's father Kwok Ying-shing is the chairman of Kaisa and also chairs Sing Tao News Corporation (1105), the parent of The Standard.