Re Uni-Asia Holdings Ltd
| Jurisdiction | Cayman Islands |
| Judge | Segal |
| Judgment Date | 16 May 2017 |
| Date | 16 May 2017 |
| Docket Number | CAUSE NO. FSD 34 OF 2017 (NSJ) |
| Court | Grand Court (Cayman Islands) |
The Honourable Justice Segal
CAUSE NO. FSD 34 OF 2017 (NSJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Section 86 of the Companies Law (2016 Revision) — shareholders' scheme of arrangement — application for an order for permission to convene a meeting of shareholders — paragraph 3 of the Practice Direction No. 2 of 2010
Anna Perry of Maples and Calder for the Petitioner
Caroline Moran
Adrian Davey
On 28 March I heard an application by Uni-Asia Holdings Limited (the Petitioner), by its summons dated 13 February 2017, for an order that it be at liberty to convene on 28 April 2017 a single meeting (the Court Meeting) of its ordinary shareholders, pursuant to section 86 of the Companies Law (2016 Revision) (as amended) (the Companies Law), for the purpose of considering and, if thought fit, approving (with or without modification) the proposed scheme of arrangement (the Scheme) between the Petitioner and its ordinary shareholders (the Scheme Shareholders). At the hearing I requested that some amendments be made to the scheme documentation and the form of order convening the meeting of the Scheme Shareholders (the Order). Following the hearing I reviewed and approved the amendments and issued the Order. The hearing was recorded and a transcript has been prepared. But for the sake of completeness I have prepared this judgment to record briefly the issues that arose during the hearing and my reasons for making the Order.
The Scheme is a migration (sometimes also known as a relocation) scheme. The principal object of the Scheme is to change the jurisdiction of incorporation of the ultimate holding company of the Uni-Asia group (the Group) from the Cayman Islands to Singapore and for the Petitioner to become wholly owned by Uni-Asia Group Pte. Limited ( NewCo), currently a new subsidiary of the Petitioner that has been incorporated under the laws of Singapore for the purposes of this Scheme.
Pursuant to the Scheme, all of the shares held by the Scheme Shareholders (the Scheme Shares) on the “Books Closure Date” (expected to be 5.00 pm on 25 May 2017, Singapore time) will be transferred to NewCo. In return, the Scheme Shareholders will receive shares in NewCo (the NewCo Shares) on a one-for-one basis. Following such transfer, the Petitioner will withdraw its listing on the Singapore Stock Exchange and trading of the NewCo Shares on the Singapore Stock Exchange is expected to commence at 9.00 a.m. on 2 June 2017 (Singapore time).
As at the date on which the evidence in support of the Petitioner's summons was filed the largest majority of the Petitioner's issued shares (40,273,030 shares) (approximately 85,73 per cent.) were registered in the name of the Central Depository (Pte) Limited, as depositary (CDP). CDP is incorporated in Singapore and acts as a common nominee, holding securities on behalf of depositors (Depositors) who have shares in the Petitioner entered against their names in the register maintained by CDP in respect of book-entry securities (the Depository Register). Of the other registered holders of the Petitioner's issued shares:
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(a). approximately 9.98% is held by a company incorporated in Panama;
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(b). approximately 2.66% is held by a company incorporated in Germany; and
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(c). approximately 1.64% is held by a company incorporated in Japan.
As is usual in cases where shares are held through a depository and custodian, and the beneficial owners hold the shares indirectly, the Petitioner wishes to enfranchise the Depositors by using a voting mechanism that allows Depositors to exercise the power to vote on the Scheme which voting right is, as a matter of law, vested in the registered holder of the shares. In a case where, as here, the shares are registered in the name of the depository (CDP) it is the depository who has the right to vote at the Court Meeting and the depository must give proxies to the Depositors in order to allow them to make the decision and exercise the depository's right to vote on the Scheme. This approach and practice which involves “looking through the register” is approved both by authority and the Practice Direction No. 2 of 2010 (the Practice Direction) — see paragraph 4 of the Practice Direction. The Petitioner sought an order (following the judgment of Jones J in Re Little Sheep Group Limited [2012] (1) CILR 34 which was itself followed by Cresswell J in Re Alibaba.com Limited [2012] (1) CILR 272) that for the purpose of calculating the majority in number of those voting on the Scheme (and deciding whether the numerosity requirement contained in section 86(2) of the Companies Law had been satisfied) CPD be treated as a “multi-headed shareholder” so that each Depositor who votes in favour of or against the Scheme shall be treated as a separate shareholder (and CPD shall not be so counted). I indicated at the hearing that I was content to follow these decisions and the practice sanctioned by the Practice Direction without the need to conduct my own detailed review of the authorities or the analysis on which they are based..
On the same day and at the same venue as the Court Meeting, the Company will hold an annual general meeting (AGM) and an extraordinary general meeting (EGM). It is intended that the AGM will be held prior to the Court Meeting and that the EGM will be held following the conclusion of the Court Meeting.
In summary, the actions to be approved at the EGM include the adoption of:
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(a). a NewCo Performance Share Plan, the terms and conditions of which comply with the relevant requirements of the Singapore Stock Exchange for share schemes and are substantially the same as the Petitioner's existing performance share plan;
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(b). a general mandate for interested person transactions to enable NewCo, its subsidiaries and associated companies that are considered to be “entities at risk” to enter, in the ordinary course of business, into certain types of transactions with specified classes of NewCo's “interested persons”, provided that such transactions are made on normal commercial terms and in accordance with the review procedures for such transactions; and
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(c). a share issue mandate by NewCo to grant authority to the NewCo Directors, inter alia, to allot and issue NewCo Shares and/or convertible securities of NewCo.
There is no Cayman Islands or Singapore law requirement to obtain the prior approval of the Petitioner's shareholders to such matters, however such approval has been requested by the Singapore Stock Exchange.
The restructuring to be effected pursuant to the Scheme is purely an internal restructuring exercise undertaken by the Petitioner and NewCo to enable the Scheme Shareholders to give up their shareholding interests in the Petitioner in exchange for shareholding interests in NewCo. As the principal asset of NewCo immediately after the completion of the restructuring to be effected by the Scheme will only be the shares in the Petitioner, the Scheme will not cause or result in any substantive change in the financial position of the Group. In particular, the Scheme does not involve the write-off of any debt of the Petitioner and the aggregate assets and liabilities of the Group after the completion of the Scheme will be substantially the same as that prior to completion of the proposed restructuring pursuant to the Scheme.
The evidence filed in support of this application consisted of:
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(a). the First Affidavit of Michio Tanamoto, the chairman and chief executive officer of the Petitioner, sworn on 20 March 2017 (Tanamoto First). Tanamoto First explained the purpose of the Scheme. Exhibited to Tanamoto First at Exhibit “MT-1” was the draft of the proposed explanatory circular (the Scheme Circular) in substantially the form that the Petitioner intended to send to the Scheme Shareholders; and
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(b). the First Affirmation of Leonard Ching Tchi Pang, a partner at Allen & Gledhill LLP, Singapore legal advisers to the Petitioner, sworn on 21 March 2017, which addressed compliance with regulatory requirements arising out of the Singapore Stock Exchange's listing requirements with respect to the Petitioner, and the exhibits thereto which contained a copy of Mr. Pang's biography and copies of the relevant Singapore regulatory rules.
The Petitioner submitted and I agree that the following matters arise for determination, having regard in particular to the requirements as set out in...
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