A subsidiary of Hong Kong’s largest karaoke operator is facing a winding-up petition, just days after the chain resumed business amid a relaxation of the city’s coronavirus social-distancing measures.
Neway Music, responsible for obtaining music licences for parent Neway Group’s karaoke outlets, was served with the petition on Monday by the Hong Kong Karaoke Licensing Alliance, according to filing records at the High Court.
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 the licensees.
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The first hearing has been scheduled for July 28.
The two parties have been embroiled in a legal tussle since 2010 when Neway challenged the alliance’s licensing scheme at the Copyright Tribunal.
In 2019, the tribunal ruled in favour of the alliance to find the scheme reasonable and ordered Neway to pay more than HK$90 million in licence fees plus costs for the protracted proceedings last November. Neway is appealing against the tribunal’s rulings in the High Court.
The Post has contacted Neway for comment, while the alliance declined to respond.
The legal action comes just days after Neway’s announcement last Thursday that it planned to reopen all 12 of its branches across the city, following a relaxation of social-distancing rules announced by Secretary for Food and Health Professor Sophia Chan Siu-chee.
Karaoke lounges have been closed since last November as part of a suite of tough social-distancing measures introduced when Hong Kong was battling its fourth wave of Covid-19 infections.
The revamped rules allow karaoke lounges to operate until 2am with four customers to a room, on the condition all staff and patrons have received their first dose of vaccine and guests use the government’s “Leave Home Safe” risk-exposure app.
Neway established its first karaoke box at Harbour Crystal Centre in Tsim Sha Tsui in 1993, and gradually expanded from commercial areas to other suburban residential locations as it grew increasingly popular.
The company also expanded into other regions, such as Macau and Malaysia.
Signs of financial troubles emerged last year, when two of its outlets were sued for outstanding rent, rates, management fees, air-conditioning charges, and damages plus interest.
One of them was the Argyle Centre branch in Mong Kok, under the companies Neway.com Technology and Music Advance, for which the landlord, CRE Property (Argyle Centre), demanded vacant possession of the premises and repayment of more than HK$16 million accrued since May 1, 2020.
The other branch was in the Lok Sing Centre in Causeway Bay, held by Wonderful, for which CRE Property (Lok Sing Centre), also demanded vacant possession and repayment of more than HK$21.7 million accrued since March 1, 2020.
Both outlets are no longer listed on the company website.