Golden Harvest Entertainment (Holdings) has won the first round in a battle with Australian firm Village Roadshow over a Singapore joint venture that the Hong Kong movie giant claims has suffered 'serious corporate governance failures' at the hands of management. A court has refused to throw out a lawsuit filed by Golden Harvest subsidiary Golden Screen, despite claims by Village Roadshow subsidiary Village Cinemas Australia that it was frivolous, vexatious and an abuse of the court. This paves the way for a protracted court showdown between the two movie companies, unless a settlement is struck. The pair have squared off over Golden Village Multiplex, a Singapore arm of their joint venture set up in the late 1980s to develop cinemas in Asia. In particular, Golden Screen is seeking to wind up the Singapore firm's holding company. The Golden Harvest subsidiary claims Golden Village's affairs have been conducted to its detriment as a 50 per cent shareholder. Much of the dispute focuses on Kenneth Tan, the managing director since 2003. The Golden Harvest arm claims Mr Tan acted contrary to express provisions of the Golden Village board in relation to ticket prices and staff sackings. It also alleges that Mr Tan is in conflict in his role in Golden Village as he is also chairman of the Singapore Film Society. This became an issue in relation to the booking of venues by the society and in organising premieres. When forced to face the issue, the Village Roadshow arm used its powers under a shareholders' agreement to exclude Golden Screen from the management of the joint venture, the Hong Kong company claims. It contends that the Singapore firm's governance has thus been compromised. The Village Roadshow subsidiary tried to strike out the winding-up petition in August but was last week denied the chance to thwart the lawsuit in a ruling handed down by Madam Justice Susan Kwan Shuk-hing at the High Court. She noted it was arguable that the complaints went beyond a simple disagreement over commercial judgment. 'It does not appear to me it is plain and obvious that the petition is bound to fail,' she ruled. Golden Harvest's annual results for the year to June showed that the Singapore market had seen steady growth of 8 per cent for the movie giant, with Golden Village contributing $14 million to group net profit, up $2 million from the previous year. Golden Harvest posted an overall loss of $12.93 million. It is not the first time relations between the movie firms have soured. In April 2000, Village Roadshow sold a 22 per cent stake in Golden Harvest to Taiwanese computer maker Acer, 8 per cent to Southeast Asia Investments Holdings and 4.77 per cent to Golden Harvest chairman Raymond Chow Ting-hsing. The deal, valued at $423.17 million, negated a previous agreement on Village's part to sell 25.08 per cent of Golden Harvest to Lai Sun Hotels International. The proposed deal had sparked hostility among Golden Harvest executives who were reportedly set to veto it.