High Court orders Hong Kong licensing company Neway Music to wind up over HK$63 million debt

·2-min read

The High Court has ordered a music licensing company in Hong Kong to wind up over its failure to repay HK$63 million (US$8.1 million) in debt.

Neway Music, which had been responsible for obtaining music licences for Neway Group’s karaoke outlets, had objected to a petition filed by the Hong Kong Karaoke Licensing Alliance on May 4, saying that the court should have waited for the matter to be settled at the Copyright Tribunal.

The two parties had been embroiled in a legal tussle since 2010 when Neway Music challenged the alliance’s licensing scheme at the tribunal.

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The alliance is a licensing body authorised by Sony Music Entertainment Hong Kong, Warner Music Hong Kong and Universal Music to negotiate and grant reproduction licences of approved music videos to karaoke lounges in the city, and to collect fees from licensees.

Unit of Hong Kong’s biggest karaoke operator hit with winding-up petition

In 2019, the tribunal ruled in favour of the alliance to find the scheme reasonable and ordered Neway Music to pay more than HK$90 million in licence fees plus costs for the protracted proceedings last November.

On Monday, a representative for Neway Music said its appeal against the tribunal’s ruling would be heard in December this year.

But Madam Justice Linda Chan Ching-fan noted that Neway Music did not apply to stay the execution of the tribunal judgment, which meant the debt was both enforceable and due for payment.

Chan then ordered the winding up of Neway Music.

Her ruling came after Neway Group issued a voluntary announcement on May 11, clarifying that it “does not own any interest in, or operate Neway Music”.

A woman singing at a karaoke bar. There are 11 Neway karaoke outlets across Hong Kong. Photo: Shutterstock
A woman singing at a karaoke bar. There are 11 Neway karaoke outlets across Hong Kong. Photo: Shutterstock

“Accordingly, the winding-up petition does not concern or affect the group’s operation and financial performance,” chairman Ernie Suek Ka-lun wrote on behalf of the board.

There are 11 Neway karaoke outlets across Hong Kong.

Neway established its first karaoke box at Harbour Crystal Centre in Tsim Sha Tsui in 1993. It gradually expanded from commercial areas to other suburban residential locations as it grew increasingly popular. The company also expanded to regions such as Macau and Malaysia.

Signs of financial trouble emerged last year, when two of its outlets were sued for outstanding rent, rates, management fees, air-conditioning charges, and damages plus interest.

Both outlets, in Mong Kok and Causeway Bay, are no longer listed on the company website.

This article High Court orders Hong Kong licensing company Neway Music to wind up over HK$63 million debt first appeared on South China Morning Post

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