9th July, 1981
CONCERNING LAWSUIT OF STATE COMPANY OF PRO'S CLAIM ON PROPERTY OF PAO HSING COTTON MILL LTD.
1.
Pao Yuen Tung Hsing Yich Company Ltd., of Sichuan province is
a subsidiary of the China Department Store which is under the leadership of the Ministry of Commerce of the People's Republic of China. On
3th February 1981, this company served writ on the High Court of Hongkong accusing Pao Hsing Cotton Mill Ltd. and Yang Sen lui (deceased, former member of the board of directors and manager of Pao Hsing), Chang Jye An (deceased, former vice manager of Pao Hsing), and Tung Teh lei (deceased, former assistant manager of Pao Hsing) of taking over of Pao Hsing Cotton Mill Ltd. as their private property and encroaching on the right of owership of the plaintiff in violation of the trust placed in them and their trusteeship as agents of the plaintiff. Court hearing of the case began, however, the defendents i.e. members of the families of Yang Sen Hui, Chang Jye An, and Tung Teh Kei, also sorved writ on the High Court of Hongkong on the pretext of legal procedure in an attempt to strike out plaintiff's charges.
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2. For five days since hay 28th a hearing of the case took place at the High Court of Hongkong before Honourable Justice. Power. After the case was stated by the barristers of both sides, the verdict read out on 16th June stated that Pao Hsing Cotton Mill Limited was justified in pleading that the charges brought against it be struck out but the effort to strike out, the action against Yang Sen lui, Chang Jye An and Tung Teh Mei had failed. The Judge was of the opinion that there was reason to take the case to the civil court.
3. It is our view that Honourable Justice Power's judgement is not appropriate. Taking Pao Hsing as an ordinary company limited in Hongkong, the mill was considered as an independent juridical person. Hence his judgement that Pao Yuen Tung Hsing Yieh Company Ltd. can only lay charges against Yang Sen Hui, Chang Jye An, Tung Teh Mei for breaking trust. but not against Pao Hsing Cotton Mill Ltd. Ho consideration whatever was taken of the fact that Pao Hsing Cotton Hill Ltd. was only an invested subsidiary and the agent of Pao Yuen Tung lising Yieh Com any Ltd. We note also that following the announcement of the High Court, Yang Sen Hui's son Shau-Kai Yang has proceeded to sale the property of Pao Ising Cotton Hill Ltd. located at 415-451 Castle Peak Road, Kwai Chung, the New Territories (DD No. 445-696, the New Territories). The possible transfer of capital poses a serious threat to the rights of Fao Yuen Tung Hsing Yieh Company Ltd. In view of this development, Pao Yuen Tung appealed to the Supreme Court of Hongkong on 20th June 1901 (civil appeal case Ko.74). The matter concerns the protection of a property of the People's Republic of China. We ask the Hongkong Go-vernment to uphold justice and prevent the sale and transfer of all properties of Pao Iising Cotton Hill Ltd., including all its claims on Castle Peak Road in Kwad Chung“.
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