Xu Wei Dong v Midas Holdings Ltd: Disclosure Order for Audit Documents under Companies Act
In the case of Xu Wei Dong versus Midas Holdings Ltd, the High Court of Singapore granted the liquidator's application for an order under Section 285 of the Companies Act, compelling Mazars LLP and Mazars CPA Limited to disclose audit documents for Midas Holdings Limited for the financial years 2012 to 2017. The court found the documents reasonably required for the liquidator to carry out his duties and that the order was not oppressive.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Order granted for the disclosure of documents relating to audits carried out by Mazars LLP and Mazars CPA Limited on Midas Holdings Limited for the financial years ended 2012 to 2017.
1.3 Case Type
Insolvency
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Liquidator seeks disclosure of audit documents from Mazars LLP and Mazars CPA Limited. The court granted the order, finding it reasonably required.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Xu Wei Dong | Plaintiff | Individual | Order granted | Won | |
| Midas Holdings Limited | Defendant | Corporation | Order granted against company | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Aedit Abdullah | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Teo Zhiwei Derrick Maximillian | BlackOak LLC |
| Tay Kang-Rui Darius | BlackOak LLC |
4. Facts
- The Liquidator of Midas Holdings Ltd sought an order under s 285 of the Companies Act for disclosure of audit documents.
- Mazars SG was the external auditor of the Company from 2012 to 2017.
- Mazars HK assisted Mazars SG as component auditors, auditing the Company's PRC subsidiaries.
- In February 2018, the Company instructed Mazars SG to stop work on the audit for FY 2017.
- Mazars SG informed the Company that the Audit Reports could not be relied on due to certain discrepancies uncovered.
- The Company was placed under liquidation on 24 June 2019.
- The Liquidator filed a Writ of Summons in HC/S 1036/2021 against the Auditors.
5. Formal Citations
- Xu Wei Dong v Midas Holdings Ltd, Companies Winding Up No 86 of 2019 (Summons No 1497 of 2022), [2022] SGHC 268
6. Timeline
| Date | Event |
|---|---|
| Mazars SG appointed as external auditor of the Company | |
| End of financial year | |
| Company instructed Mazars SG to stop work on the audit for FY 2017 | |
| Mazars SG informed the Company that the Audit Reports could not be relied on | |
| Company was placed under liquidation | |
| Liquidator instructed the Company’s solicitors to file a Writ of Summons in HC/S 1036/2021 against the Auditors | |
| Liquidator obtained court approval for a funding arrangement with a third-party commercial litigation funder | |
| Judgment reserved | |
| Judgment delivered |
7. Legal Issues
- Extra-territorial application of Section 285 of the Companies Act
- Outcome: The court held that Section 285 of the Companies Act has extra-territorial effect.
- Category: Jurisdictional
- Related Cases:
- [1998] SGHC 27
- [2015] 3 SLR 665
- Whether orders sought under Section 285 of the Companies Act should be granted
- Outcome: The court granted the orders sought under Section 285 of the Companies Act.
- Category: Substantive
- Related Cases:
- [2015] 3 SLR 665
- Oppression due to contravention of PRC law
- Outcome: The court found that oppression was not established through the Auditors’ possible contravention of PRC Law.
- Category: Substantive
8. Remedies Sought
- Order for disclosure of documents under Section 285 of the Companies Act
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Administration of Insolvent Estates
- Commercial Litigation
11. Industries
- Accounting
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| PricewaterhouseCoopers LLP and others v Celestial Nutrifoods Ltd (in compulsory liquidation) | Court of Appeal | Yes | [2015] 3 SLR 665 | Singapore | Outlines the two-stage test for applications under section 285 of the Companies Act, requiring a reasonable basis for belief that the examinee can assist and a balancing of interests. |
| In the Matter of the Companies Act Chapter 50 And In the Matter of Thye Nam Loong (Singapore) Pte Ltd (RC no 196500242G) | High Court | Yes | [1998] SGHC 27 | Singapore | Rejected the argument that section 285 of the Companies Act is limited territorially. |
| In re Tucker (RC) (A bankrupt) | Chancery Division | No | [1990] 1 Ch 148 | United Kingdom | Held that section 25(1) of the Bankruptcy Act 1914 did not have extra-territorial effect; distinguished by the court. |
| In re MF Global UK Ltd (in special administration) (No 7) | Unknown | No | [2016] 2 WLR 588 | United Kingdom | Held that section 236 of the Insolvency Act 1986 lacked extra-territorial effect, following In re Tucker; distinguished by the court. |
| In re Akkurate Ltd (in liquidation) | Unknown | No | [2020] 3 WLR 1077 | United Kingdom | Held that section 236 of the Insolvency Act 1986 lacked extra-territorial effect, following In re Tucker; distinguished by the court. |
| Official Receiver v Tristram Michael Norriss | High Court of Justice | Yes | [2015] EWHC 2697 (Ch) | England and Wales | Concluded that section 236 of the Insolvency Act 1986 had extra-territorial effect and declined to follow Re Tucker. |
| In re Carna Meats (UK) Ltd | Unknown | Yes | [2020] 1 WLR 1176 | United Kingdom | Distinguished Re Tucker on the basis that it was primarily concerned with enforcing the attendance of persons before the court, while the applicant in Re Carna Meats only sought the production of documents. |
| BNY Corporate Trustee Services Ltd v Celestial Nutrifoods Ltd | High Court | Yes | [2014] 4 SLR 331 | Singapore | Tacitly considered the extra-territorial effect of section 285 of the Companies Act. |
| JIO Minerals FZC and others v Mineral Enterprises Ltd | Court of Appeal | Yes | [2011] 1 SLR 391 | Singapore | Endorsed the presumption against extra-territoriality. |
| Huang Danmin v Traditional Chinese Medicine Practitioners Board | High Court | Yes | [2010] 3 SLR 1108 | Singapore | Observed that it would be more accurate to speak of degrees of extra-territoriality than to think of extra-territoriality as a discrete category. |
| Burgundy Global Exploration Corp v Transocean Offshore International Ventures Ltd and another appeal | Court of Appeal | Yes | [2014] 3 SLR 381 | Singapore | Addressed the presumption against extra-territoriality. |
| Re Sasea Finance Ltd (in liq) | Unknown | No | [1998] Ch 103 | United Kingdom | Case where the English court denied an application by liquidators of a company for interrogatories. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) | Singapore |
| Insolvency Act 1986 (c 45) (UK) | United Kingdom |
| Bankruptcy Act 1914 (c 59) (UK) | United Kingdom |
15. Key Terms and Keywords
15.1 Key Terms
- Liquidation
- Audit Reports
- Disclosure Order
- Extra-territoriality
- Companies Act
- Oppression
- PRC Law
- Liquidator
- Auditors
- Financial Years
15.2 Keywords
- liquidation
- audit
- disclosure
- companies act
- insolvency
- singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Insolvency Law | 90 |
| Liquidation | 80 |
| Company Law | 70 |
| Auditing | 60 |
| Civil Procedure | 40 |
| Evidence | 30 |
| Estate Administration | 30 |
| Banking Law | 10 |
16. Subjects
- Insolvency
- Company Law
- Civil Procedure