Koa Capital LP and 507 Summit LLC (together, the Petitioners) presented a winding up petition on 16 January 2024 in respect of Fang Holdings Limited (the Company), a Cayman-incorporated entity. The petition was directed principally at the conduct of Tianquan Mo (Mr Mo), listed as the First Respondent, who the Petitioners alleged had engaged in wrongdoing that benefited him personally at the expense of the Company. The Company itself was named as the Second Respondent.

Progress was slow. The Petitioners had difficulty effecting service on Mr Mo, and the matter did not come on for a directions hearing until 25 November 2025. By that stage, the Company had engaged separate counsel and wished to participate in the proceedings beyond simply providing discovery.

The hearing concerned three questions:

1. Should the proceedings be treated as inter partes between the Petitioners and Mr Mo in his capacity as a member of the Company?
2. To what extent should the Company be permitted to participate?
3. What procedural directions should be given for the future conduct of the petition, including timetabling for defences, reply, discovery, and evidence?

The Petitioners argued that the dispute was properly between them and Mr Mo, and that the Company's role should therefore be confined to giving discovery. The Company, on the other hand, contended that the serious allegations against its board necessitated its separate and independent representation, and that its wider shareholder base would be prejudiced if it could not defend the proceedings. The Company invited the Court to permit it to participate and indicated (without supporting evidence) that it would establish a litigation committee for that purpose, to be comprised of independent directors.

Mr Mo did not appear.

The Court applied Order 3, rule 12(1) of the Companies Winding Up Rules and the established authorities, including the decisions of Justice Foster in Freerider Ltd, Justice Segal in China Shanshui, Justice Richards in Madera Technology Fund CI Ltd, and Justice Segal in Uphold Ltd. Those authorities recognise a “rebuttable distaste” for company participation in shareholder petitions brought on just and equitable grounds, the underlying rationale being that such disputes are typically between shareholders, and the company's involvement risks one faction using corporate funds to fight what is essentially a private battle.
The Court characterised the real dispute as one between the Petitioners and Mr Mo. The allegations were that Mr Mo had acted in his own interests at the Company's expense. The Company had not demonstrated that it held a separate and independent position requiring protection.

The Company's offer to establish a litigation committee was found to be insufficient. In Uphold, Justice Segal had set out in some detail what the Court expects where a company seeks to participate through a litigation committee: the committee must be able to act independently and without improper interference from the respondent shareholders; the committee members must confirm that they are not conflicted; and the committee must not overstep its remit, leaving the accused shareholders to take the lead in (and bear the cost of) defending the allegations against them. Even in Uphold, where the company had already established a litigation committee and put evidence before the Court going “a long way towards providing the court with the assurances that it needs”, Justice Segal still required further evidence of independence. In the present case, by contrast, the Company had provided no evidence at all: no evidence of proposed committee members, no safeguards, and no articulated defence strategy. The Company had also failed to provide a draft order setting out the directions it actually sought, which the Court noted was unhelpful.

On the question of Mr Mo's membership, the Court considered section 48 of the Companies Act (2025 Revision), which provides that the register of members constitutes prima facie evidence of the matters recorded in it. The Company's own attorneys had confirmed by letter dated 13 September 2024 that Mr Mo had ceased to be a registered member on 5 May 2024. The Petitioners, however, said the register was unreliable, pointing to inconsistencies in the recorded entries and to other evidence of Mr Mo's shareholder status – including Mr Mo’s own evidence in earlier proceedings in which he confirmed that he was a shareholder of the Company. The Court was satisfied, for present purposes, that Mr Mo was a member.

The Court therefore ordered that the Company's participation be limited to giving discovery, the proceedings be treated as inter partes between the Petitioners and Mr Mo, and that advertisement of the Petition be dispensed with. Notice was to be given to all registered legal shareholders and directors, so that genuinely independent shareholders could, if they wished, appoint a representative, and individual directors concerned about their own position could likewise seek to be heard. The Court also set a full timetable for defences, reply, discovery, and evidence.

A company that wishes to participate in winding up proceedings brought by shareholders on just and equitable grounds must do more than simply express a desire to do so. The Court expects concrete evidence as to who is proposed to sit on any litigation committee, what safeguards are to be in place so as to ensure the genuine independence of the board, and what the company actually proposes to do by way of defence. Bare assertions, even where serious allegations are made against the board, will not suffice.

If the company genuinely has an independent interest to protect, it must prepare and present evidence of that independence at the earliest opportunity. That may well mean establishing a litigation committee (or equivalent governance mechanism) and adducing evidence as its composition and its purpose (rather than merely flagging the possibility of doing so in submissions). Uphold confirms that the bar is a high one: even where a committee has been established and some evidence has been provided, the Court may still require more.

The order for notification to registered legal shareholders and directors is also worth noting. The Court recognised that genuinely independent shareholders may have a legitimate interest in the proceedings and should be afforded the opportunity to participate on their own account. This may prove relevant in future cases involving listed or widely held companies.
Finally, the treatment of the register of members is a reminder that section 48 of the Companies Act (2025 Revision) provides only prima facie evidence. Where register entries are contested, the Court will look at all of the evidence, including any admissions made in related proceedings.