Federal Court clears path to wind up Chinese textile group in Australia

The Federal Court has held that Chinese textile conglomerate Shandong Ruyi Technology Group Co Ltd can be wound up in Australia after finding its extensive involvement in Australian cotton, wool and agricultural businesses meant it was carrying on business here for the purposes of Part 5.7 of the Corporations Act 2001.

The proceeding was brought by Chinese judgment creditor Shenzhen Xinhe Hongshi Investment & Consultancy Co Ltd, which also obtained recognition and enforcement of Chinese court judgments against Ruyi worth approximately $28 million as at March 2026.

The case turned principally on whether Ruyi, a company incorporated in the People’s Republic of China and not registered as a foreign company in Australia, nevertheless “carries on business in Australia” within the statutory definition of a Part 5.7 body. Justice Stewart held that it did, finding Ruyi repeatedly purchased and traded Australian cotton and wool as an integral part of its vertically integrated textile business, including through subsidiaries associated with Cubbie Station and Lempriere Australia. The Court found those repeated transactions were acts in Australia that made up or supported Ruyi’s business, rather than isolated purchases from Australian suppliers.

The Court also found Ruyi’s Australian activities extended well beyond commodity purchases. Its Australian subsidiaries were coordinated through the unincorporated Ruyi Australia Group, which Justice Stewart described as a governance structure of Ruyi itself operating in Australia. The group coordinated Ruyi’s interests in businesses including Cubbie Station, wool trader Lempriere Australia and Victorian farming company Forever Winner International Development (Australia) Pty Ltd, while Australian-based personnel pursued transactions and commercial opportunities on Ruyi’s behalf. Justice Stewart found this amounted to Ruyi conducting business in Australia directly.

The Court separately concluded that Forever Winner, which formerly owned the Larundel Estate in Victoria, had effectively been treated as a trading division of Ruyi rather than as a genuinely independent subsidiary. Among other matters, Ruyi funded its operating expenses, its assets were used to secure debts of other Ruyi entities and related parties, and its management was brought under the Ruyi Australia Group. Justice Stewart held that Ruyi had disregarded Forever Winner’s separate corporate personality to such an extent that its Australian business activities could also be treated as Ruyi’s own.

The judgment also confirms that Chinese judgments can be enforced in Australia at common law even though mainland Chinese courts are not covered by the reciprocal enforcement regime under the Foreign Judgments Act 1991. The Court said the usual common-law requirements were satisfied because the Chinese courts had jurisdiction in the international sense, the judgments were final and conclusive, involved the same parties and required payment of a fixed sum. Ruyi ultimately did not contest their enforceability.

The identity of the liquidator has not yet been revealed.

Read the decision here.

James Hutton SC of Eleven Wentworth, Philip Santucci of New Chambers, Jessica Zoller of 6 St James Hall and Marque Lawyers acted for Shenzhen Xinhe Hongshi Investment & Consultancy Co Ltd.

Andrew Meagher KC of a List G Barristers, Ben Koch of Ninth Floor Selborne Chambers and K&L Gates acted for Shandong Ruyi Technology Group Co Ltd.