SW partner Mr. Eric Lui, associate Ms. Vivian Ji and Head of Business Development (China) Ms. Connie Yeung attended the “smartHK” exhibition held at the Jinan International Convention & Exhibition Center from 27th to 28th May 2015.

The exhibition was organized by the Hong Kong Trade Development Council and attracted more than 200 Hong Kong service providers from different sectors. The theme of the exhibition was “industrial transformation and upgrading” and the major services covered innovative design and marketing, technological advancement and management upgrading.

The exhibition provided a wonderful opportunity for Hong Kong service providers to connect with the mainland market and promote Hong Kong’s total business solution to mainland enterprises.

During the exhibition, a large number of visitors, including representatives of several major enterprises in the mainland, visited our booth. They showed tremendous interest in our services, and particularly our services relating to initial public offering and intellectual property.

Mr Gregory So Kam-leung, Secretary for Commerce and Economic Development of HKSAR, with our Ms. Connie Yeung at our booth

Please contact our Eric Lui for any enquiries or further information about this event.

In Hong Kong, section 7 of the Limitation Ordinance (Cap.347) provides for a 60-year limitation period for the government to bring actions to recover land.

In the recent High Court case Jade’s Realm Ltd v Director of Lands [2015] HKEC 95, the Plaintiff and its predecessors-in-title had been in adverse possession of a piece of government land in the New Territories since 1937 (or even earlier). The Director of Lands’ included in its Amended Defence that since the title of the Colonial Government over the piece of land was a leasehold title, any adverse possession period accumulated against the Colonial Government had come to an end on 30 June 1997 when the lease expired. Any period accumulated after 30 June 1997 was less than the required 60 years. Such defence was accepted as valid in rejecting the Plaintiff’s application to strike out the same.

This might be considered as an important decision for similar adverse possession claims against the government, since claimants may no longer rely on any 60-year period which started prior to and ends after 1 July 1997 as the period required for adverse possession against the government.

In the first batch of approvals by the Department of Justice, Guangdong, ABL&SW set up a joint venture law firm in the Qianhai Modern Service Industry Cooperation Zone.

To celebrate this momentous event, over 300 distinguished guests attended the grand opening ceremony at the Futian Shangri-La Hotel on 20th May 2015.

We were very privileged to have Ms Elsie Leung Oi-sie, GBM, JP (Deputy Director, HKSAR Basic Law Committee of Standing Committee of National People’s Congress) and Mr Thomas So (Vice President of the Law Society of Hong Kong) to be our honourable guests. It was also our great pleasure to have leaders from the Chinese Department of Justice, leaders from Liaison Office of the Central People’s Government in the Hong Kong S. A. R., officials from the Department of Justice in Hong Kong, leaders from Qianhai Management Office, representative from AllBright Law Offices, representatives from Stevenson, Wong & Co. and representatives from ABL&SW to share their views with us.

The participants attended an insightful conference covering various topics on cross-border finances by guest speakers from different sectors ranging from Government Bodies to private banks. Participants will have gained valuable knowledge from the experience and insights of the professionals. Following this was a lavish banquet celebrating the opening of ABL&SW and the 10th anniversary of Allbright Shenzhen Office.

This delightful event marks the start of AllBright Law Firm and Stevenson, Wong & Co. providing cross border innovative legal services to enhance the development of the Qianhai Modern Service Industries Cooperation Zone.

Please contact our Mr. Eric Lui for any enquiries or further information about this event.

Circular on Reforming the Management of the Settlement of Foreign Capital from Foreign-Invested Enterprises (Huifa No. 19 【2015】)

On 30 March 2015, the State Administration of Foreign Exchange of People’s Republic of China (“SAFE”) issued the Circular on Reforming the Management of the Settlement of Foreign Capital from Foreign-Invested Enterprises (《关于改革外商投资企业外汇资本金结汇管理方式的通知》) (Huifa No. 19 【2015】) in which it announced that from 1 June 2015 onwards, new legislation for reforming the management of the settlement of foreign capital from foreign-invested enterprises will become effective in the whole country.

The primary function of this reform is to implement willingness exchange settlement (意愿结汇) for foreign capital from foreign-invested enterprises, thereby the use of the exchanged Renminbi (“RMB”) is relaxed. The new legislation will nevertheless maintain restrictions to the use of the exchanged Renminbi on: (1) expenditures other than those that are within the scope of business or not prohibited by legislations; (2) direct or indirect investment in securities; (3) direct or indirect issuance of RMB-denominated entrusted loans, repayment of inter-enterprise lending (including those with third-party advances) or repayment of third-party banks that has taken up the lending; and (4) purchase of real estate not for self-use (foreign-invested enterprises with registered businesses in investment of real estate are exempted).

Previously, foreign capital from foreign-invested enterprises was not permitted to be used in equity investments in China. The substantial change to be brought about by this new legislation is that the investee enterprise in China will first need to apply with SAFE for a domestic re-investment registration (境内再投资登记) and then open a relevant settled foreign currency receiver account (结汇待支付账户). After which, the investing foreign-invested enterprise may remit settled foreign capital (which is in RMB) to the said account.

In the recent case Provisional Liquidators of China Medical Technologies Inc v Samson Tsang Tak Yung [2015] HKEC 224, HCCW No.435 of 2012, the liquidators’ application to produce the “private papers” (such as bank statements and purported divorce documents) of the company’s former CFO was rejected by the Court.

Under section 221 of the Companies (Winding-up and Miscellaneous Provisions) Ordinance, Cap.32 of the Laws of Hong Kong (the “Ordinance”), the Court is empowered to order persons who have information relating to the “affairs, or property of the company” to be examined on oath (section 221 (1) and (2)) or to produce documents “relating to the company” (section 221(3)).

The liquidators in the case sought production of a wide-ranging of documents from the former CFO on the basis that he and his associates had allegedly been misappropriating the funds of the company following its IPO and issuance of bonds. In essence, the justifications for the production of the “private papers” put forward by the liquidators were that (1) the liquidators are responsible for the recovery of the company’s property and this included contingent claims on behalf of the company and (2) with reference to the similar powers in other common law jurisdictions the power of production should not be limited to documents “relating to the company” but included documents relating to the “affairs, or property” of the company”.

While granting wide orders for production against the CFO and orders for his examination, the Court refused to order production of the his private papers, considering that the power of production under section 221(3) of the Ordinance does not cover a defendant’s private papers and that “an order for production of private papers is more intrusive than an examination at which [the defendant] can be asked questions about his financial circumstances”.

It has been reported that leave to appeal against the decision has been granted. It remains to be seen whether the decision will be upheld in the appellate court.

On 4 May 2015, SW partner Mr. Eric Lui, senior associate Ms. Freda Au, legal executives Mr. Stanley Hung and Mr. Man Wong delivered a presentation on stamp duty issues involving properties and share transactions at Commercial Business II – Corporate Banking and Financial Institutions of Bank of China (Hong Kong) Limited (“BCHK”). Over 50 representatives from BCHK attended the seminar.

In the first part of the seminar, Mr. Lui introduced our firm to the audience and the joint venture law firm with AllBright Law Offices in Qianhai Modern Service Industry Co-operation Zone which will provide legal services to clients in both Hong Kong and Mainland China.

In the second part of the seminar, Mr. Wong and Mr. Hung gave practical advice to the audience on how the Stamp Duty Ordinance applies to property, and share transactions in Hong Kong and recent cases on Stamp Duty.

Please contact our Mr. Eric Lui for any enquiries or further information about this event.