In Hansom Finance Limited (in Creditors’ Voluntary Liquidation) v Yang Haoying [2025] HKCFI 5278, the Plaintiff (“Hansom”) claimed against its former director (“Mr Yang”) for breach of directors’ duties in relation to the approval and granting of five unsecured loans totalling HK$799 million between September 2017 and March 2018.
During the relevant period, Mr Yang acted either as the sole director or as one of two directors of Hansom and was the principal approver of the loans, having signed the credit assessment reports, loan agreements, drawdown requests and subsequent repayment extension agreements. The unsecured loans were granted to Mainland borrowers, with inadequate and largely unverified documentation, and the proceeds were paid to third-party recipients. All five loans subsequently defaulted and became irrecoverable.
Au-Yeung J held that Mr Yang owed Hansom statutory and fiduciary duties under Section 465 of the Companies Ordinance to exercise reasonable care, skill and diligence, to exercise independent judgment, and to act bona fide in the best interests of the company. Having regard to Mr Yang’s professional qualifications and extensive experience in the financial industry, the Court found that he was subject to a heightened standard of care. The Court rejected Mr Yang’s defence that his role was limited to that of an “approver” within a broader workflow involving other personnel from the parent company. Delegation and reliance on others did not absolve him of responsibility and he had failed to supervise adequately, failed to question obvious deficiencies in the credit assessments, failed to obtain or consider meaningful evidence of the borrowers’ ability to repay, failed to require any security, and failed to exercise independent judgment.
The Court granted judgment in favour of Hansom in the sum of HK$799 million with interest and costs.
Read the judgment here: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=174174&currpage=T
Mr Justin Lam and Mr Andy Lau of Karas So LLP acted for the Plaintiff. Glen Ho of Deloitte acted as one of the liquidators of the Plaintiff.
