Securities and Futures Commission v. Superb Summit International Group Ltd and Others

HCMP 2305/2020

[2025] HKCFI 3713

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2305 OF 2020

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BETWEEN

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REASONS FOR DECISION

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Introduction

1.The Securities and Futures Commission (“SFC”) commenced these proceedings by a petition dated 18 December 2020 (as amended on 26 April 2021) under section 214 of the Securities and Futures Ordinance (Cap. 571) (“SFO”) seeking, inter alia, disqualification orders against the 2^nd to 16^th Respondents in respect of the affairs of the 1^st Respondent (“Company”).

2.The present hearing concerns the 9^th, 11^th, 12^th, 13^th and 14^th Respondents (collectively “Relevant Respondents”), each of whom has agreed with the SFC to dispose of the proceedings by way of the Carecraft procedure based on three sets of Statement of Agreed Facts[1] (collectively “Statements”), which I have appended to these Reasons for Decision.

3.This is the second time the Carecraft procedure has arisen in these proceedings. This Court previously disposed of these proceedings against the 5^th, 7^th, 8^th, 10^th and 15^th Respondents through the Carecraft procedure: see Reasons for Decision dated 2 July 2025[2] (“July Decision”). Unless otherwise specified, I shall adopt the abbreviations used therein.

4.The SFC and the Relevant Respondents have agreed to the following periods of disqualification, on the basis that each of the Relevant Respondents admits the business or affairs of the Company have been conducted in a manner described in sections 214(1)(a), (b), (c) and (d) of the SFO and that they were responsible for the same:

(1) The 9^th Respondent: 3.5 years[3].

(2) The 11^th Respondent: 2.5 years[4].

(3) The 12^th Respondent: 3.5 years[5].

(4) The 13^th Respondent: 3 years[6].

(5) The 14^th Respondent: 4 years[7].

Factual Background

5.The detailed factual background is contained in the Statements[8] and summarised in [5] to [18] of the July Decision. It is not necessary to repeat it here.

6.For purposes, the following matters are pertinent:

(1) The 9^th Respondent was an ED of the Company between 31 July 2001 to 22 June 2010, and the company secretary from 31 July 2001 to 2 February 2007. He was also the financial controller from 2000 until June 2010[9].

(2) The 11^th Respondent was the vice-chairman and ED of the Company from 2 February 2007 to 10 February 2009[10].

(3) The 12^th Respondent was an ED of the Company from 23 October 2007 to 22 October 2012, and company secretary from 2 February 2007 until 9 October 2012[11].

(4) The 13^th Respondent was an INED from 1 December 2005 to 19 August 2008. He was a member of the Audit Committee during this time[12].

(5) The 14^th Respondent was an INED from 11 April 2007 to 24 June 2010 and the Chairman of the Audit Committee[13].

Application of Section 214 of the SFO

7.The relevant legal principles are set out in detail in [27] of the July Decision. As discussed in [29] to [32] of the July Decision, I am satisfied that the three conditions for relief under section 214(1) of the SFO have been met. Insofar as the Relevant Respondents are concerned:

(1) The 9^th, 11^th, 13^th and 14^th Respondents have facilitated and allowed the 2007 Acquisition to take place by not having reviewed the relevant documents or questioning the methodology or assumptions applied by professional parties[14].

(2) The 9^th, 12^th and 14^th Respondents have each accepted that the information disclosed in the 2009 Announcement and the 2009 Circular were false or misleading given the non-existence of the Alleged Forestry Rights[15].

(3) In view of the above, the Company’s affairs have clearly been conducted in a manner unfairly prejudicial to its members, given how there have been material overstatements in the Company’s accounts and significant sums were expended to acquire Green & Good when it did not in fact own the Alleged Forestry Rights. The Relevant Respondents’ involvement in approving these transactions falls below the standard expected of the managers of the Company.

Disqualification Orders

8.The relevant legal principles on determining the appropriate period of disqualification are set out in [28] of the July Decision.

The 9^th Respondent

9.The 9^th Respondent was involved in approving both the 2007 and 2009 Acquisitions as an ED of the Company. He was also the financial controller and company secretary (prior to the 2007 Acquisition)[16]. The SFC’s case against the 9^th Respondent involves a breach of duty of care, incompetence and negligence[17]:

(1) In respect of the 2007 Acquisition:

(a) The 9^th Respondent failed to review the Simao Agreements, those being the source of Leeka Wood’s ownership of the Alleged Forestry Rights[18];

(b) Upon reading the disclaimer of the De Heng Legal Opinion[19], the 9^th Respondent should have at least questioned whether it was necessary to verify the authenticity of the FOLs[20].

(c) He did not question or apply his mind to the methodology or assumptions adopted by professional parties engaged by the Company[21]; and

(d) He failed to inspect the FOLs, which were the primary documents to substantiate the existence of the Alleged Forestry Rights[22].

(2) In respect of the 2009 Acquisition, the 9^th Respondent was negligent in relation to the pertinent question of ownership of the Alleged Forests despite having already been involved in the 2007 Acquisition[23].

(3) The 9^th Respondent accepted that he was negligent in approving the 2009 Announcement and 2009 Circular, which contained false and misleading statements[24].

10.A number of mitigating factors have been agreed between the SFC and the 9^th Respondent[25]:

(1) The 9^th Respondent has been cooperative with the SFC and accepts liability;

(2) By agreeing to conclude the proceedings by way of the Carecraft procedure, time and costs have been saved;

(3) The 9^th Respondent has agreed to pay his share of the SFC’s costs; and

(4) The 9^th Respondent has not exhibited any dishonesty or lack of integrity, nor has he made any personal gain or economic benefit from the misconduct in question.

11.In view of the total consideration at stake across the 2007 and 2009 Acquisitions (i.e. HK$1.678 billion) and the fact the 9^th Respondent had dual roles as ED and financial controller during these transactions, but noting that no dishonesty or fraud is alleged against the 9^th Respondent, Ms Sara Tong SC[26], counsel for the SFC, submits that a disqualification period of 3.5 years would be appropriate.

12.Mr Derek Chan SC[27], counsel for the 9^th, 11^th and 12^th Respondents, agrees with the proposed disqualification period. Apart from the agreed mitigating factors, he also highlighted the following:

(1) There is inordinate delay in bringing the present proceedings: see [37(2)] of the July Decision;

(2) The 9^th Respondent has no relevant experience in the PRC forest industry and therefore relied on the advice and expertise of professional parties engaged by the Company; and

(3) The 9^th Respondent has a clear criminal record.

13.Having regard to the above matters, I accept that the conduct of the 9^th Respondent is sufficiently serious to fall within the higher end of the lowest bracket. A disqualification period of 3.5 years is commensurate with the gravity of his conduct and gives appropriate regard to the mitigating factors.

The 11^th Respondent

14.The 11^th Respondent was an ED and vice-chairman of the Board during the 2007 Acquisition. The allegations against the 9^th Respondent as set out in [9(1)] above also apply to him[28]. Given that the 2007 Acquisition involved a consideration of HK$1.38 billion and set the scene for the 2009 Acquisition, but noting that no dishonesty or fraud is alleged, Ms Tong submits that 2.5 years would be an appropriate period of disqualification. The same mitigating factors set out in [10] and [12] above also apply to the 11^th Respondent. I consider that a disqualification period of 2.5 years against the 11^th Respondent is fair and appropriate.

The 12^th Respondent

15.The 12^th Respondent was involved in approving the 2009 Acquisition as an ED of the Company. He was also a company secretary at the time of the 2007 Acquisition (succeeding the 9^th Respondent). The allegations against the 9^th Respondent as set out in [9(2)] and [9(3)] above also apply to the 12^th Respondent[29]. Although the 12^th Respondent had not been involved as a director in approving the 2007 Acquisition, he had been a company secretary since February 2007 – and in such capacity would have been involved in, inter alia, the Company’s issuance of announcements and circulars for that earlier transaction.

16.The same mitigating factors set out in [10] and [12] above also apply to the 12^th Respondent. Ms Tong submits, and I agree, that this is a case which falls within the higher end of the lowest bracket and 3.5 years would be an appropriate period of disqualification.

The 13^th Respondent

17.The 13^th Respondent was only involved in approving the 2007 Acquisition. The SFC’s allegations against the 9^th Respondent as set out in [9(1)] above apply equally to the 13^th Respondent[30]. Ms Tong submits (and the 13^th Respondent agrees) that the appropriate period of disqualification is 3 years. In reaching such agreed period, the same mitigating factors set out in [10(1)] to [10(3)] above have been taken into account[31]. I consider that a disqualification period of 3 years would be appropriate.

The 14^th Respondent

18.As an INED and Chairman of the Audit Committee, the 14^th Respondent was involved in approving both the 2007 and 2009 Acquisitions:

(1) In respect of the 2007 Acquisition, the allegations against the 9^th Respondent as set out in [9(1)] above also apply to the 14^th Respondent[32].

(2) As regards the 2009 Acquisition:

(a) Despite knowing that the FOLs for the Alleged Forests were only allegedly temporary measures, the 14^th Respondent failed to ask further questions about whether FOCs had been obtained (for the purpose of the 2009 Acquisition) and did not pay adequate regard to the issue of ownership of the Alleged Forests[33]; and

(b) Similar to the 9^th and 12^th Respondents, the 14^th Respondent did not pay sufficient regard to the contents of the 2009 Announcement, which contained material misstatements about the Alleged Forestry Rights[34].

19.Noting that the proposed disqualification period for the 13^th Respondent, who was only involved in one of the acquisitions in the Forestry Case, is 3 years, Ms Tong submits that 4 years would be an appropriate period of disqualification for the 14^th Respondent. The same mitigating factors set out in [10(1)] to [10(3)] above and the fact that the 14^th Respondent was not involved in the day-to-day management of the Company and the Group as an INED have also been taken into account[35].

20.Mr Mike Yeung, counsel for the 14^th Respondent, also drew my attention to the following mitigating factors:

(1) The 14^th Respondent’s misplaced reliance on professional parties was due to his lack of expertise in the area of title or ownership verification concerning forestry under PRC law;

(2) There is no allegation of dishonesty, fraud or personal gain against the 14^th Respondent;

(3) As evidenced by his Master Degree in Corporate Governance and Directorship with distinction from the Hong Kong Baptist University, the 14^th Respondent recognises the importance of corporate governance. The risk of reoffending is low; and

(4) There is substantial delay in bringing these proceedings: see [37(2)] of the July Decision.

21.Taking into account the above matters and mitigating factors, I accept that 4 years would be an appropriate period of disqualification.

22.In light of the aforesaid, I made the orders sought in the draft orders produced to the Court.

Postscript

23.I observe that the Statements did not set out the specific context in which the board meetings took place or the manner in which the Relevant Respondents approved the acquisitions[36]. The way in which the directors are engaged in passing the resolutions is highly material as to whether or not they breached their duties. As I have said in Re Bank of East Asia Ltd[37] at [23]:

“23. I agree with Barma J’s decision and his reasons for reaching it. This in practice means that directors should, in deliberating on a matter such as a placement, ask themselves what competing arguments exist for and against the proposed course of action and have regard, when assessing them, on the proposed course of action’s impact on the interests of different groups of shareholders. Directors will have different expertise and experience and one would not expect all of them necessarily to be equally active in the deliberations which result in a board ultimately taking a collective decision. However, members of a board must scrutinise proposals, particularly important ones, which impact directly on the interests of shareholders not just take it on good faith that if a director tasked with a particular area of responsibility says something within his remit is a good idea it can be approved without critical appraisal. Shareholders who become aware that a board has approved a resolution without properly considering its merits may have grounds for complaint that directors have not met their obligations as directors…”

24.In the future, it would be prudent for the SFC to include in the statement of agreed facts the relevant circumstances under which the resolutions are passed and the manner in which the directors exercised their approval, such as the length of board meetings or whether the directors received any relevant materials to read before the meetings. This would serve as a useful illustration as to the standards expected of directors, including the INEDs, in discharging their duties.

Ms Sara Tong SC and Ms Natalie So, instructed by Securities and Futures Commission, for the Petitioner

Mr Derek Chan SC and Mr Francis Chung, instructed by Fan Wong & Tso, for the 9^th, 11^th and 12^th Respondents

The 13^th Respondent was not represented and did not appear

Mr Mike Yeung, instructed by CLKW Lawyers LLP, for the 14^th Respondent

Annex 1

STATEMENT OF AGREED FACTS FOR CARECRAFT PROCEDURE BETWEEN THE PETITIONER AND THE

9^th RESPONDENT, 11^th RESPONDENT, AND 12^th RESPONDENT

PART I — INTRODUCTION

1. On 18 December 2020, the Securities and Futures Commission (Petitioner) presented a petition pursuant to section 214(2) of the Securities and Futures Ordinance (Cap. 571) (SFO) seeking, among other things:

1.1 An order under section 214(2)(a) and/or section 214(2)(d) of the SFO that each of the 2^nd to 16^th Respondents shall not, for such periods as the Court shall consider appropriate, without leave of the Court:

1.1.1 be, or continue to be, a director, liquidator, or receiver or manager of the property or business, of Superb Summit International Group Limited (Superb Summit or Company) or any other corporation including any of the Company's subsidiaries and affiliates; and

1.1.2 in any way, directly or indirectly, be concerned, or take part, in the management of the Company or any other corporation including any of the Company's subsidiaries and affiliates; and

1.2 Cost.

2. On 26 April 2021, the petition was amended pursuant to the Order of Master Rita So dated 21 April 2021. The definitions of “corporation”, “subsidiary” and “affiliate” are set out in Appendix 1 to this Statement.

A. PURPOSE

3. Subject to the approval of the Court, the Petitioner and the 9^th, 11^th, and 12^th Respondents (Relevant Respondents) have agreed to dispose of these proceedings against the Relevant Respondents by way of the summary procedure (Carecraft Procedure) sanctioned in Re Carecraft Construction Co. Ltd. [1994] 1 WLR 172, as clarified by the English Court of Appeal in Secretary of State for Trade and Industry v Rogers [1996] 1 WLR 1569 and as adopted by the Court in a number of cases in respect of proceedings under section 214 of the SFO.

4. The facts set out in this Statement are not disputed between the Petitioner and the Relevant Respondents on the basis that the case against them will be dealt with by the Court by way of the Carecraft Procedure. If the Court for any reason is of the view that these proceedings shall not be dealt with by the Carecraft Procedure or that a full hearing is appropriate, no admission or concession by the Petitioner or any of the Relevant Respondents and none of the proposed orders referred to below or liability to pay costs shall be referred to or relied on by any of the parties at any subsequent hearing without the prior written consent of the Petitioner and the Relevant Respondents.

5. For the purpose of resolving these proceedings against the Relevant Respondents by way of the Carecraft Procedure, and by reference to the facts set out in Part II of this Statement, the Relevant Respondents do not dispute that during the relevant period, the business and affairs of the Company have been conducted in a manner described in section 214(1)(a) to (d) of the SFO, namely:

5.1 oppressive to its members or any part of its members;

5.2 involving misfeasance or other misconduct towards it or its members or any part of its members;

5.3 resulting in its members or any part of its members not having been given all the information in respect of its business or affairs that they might reasonably expect; and

5.4 unfairly prejudicial to its members or any part of its members.

B. UNOPPOSED ORDERS

6. On the basis of the facts set out in Part II of this Statement, the Petitioner and the Relevant Respondents agree, and the Relevant Respondents accept, that it would be appropriate for the orders set out in Part III of this Statement below to be made against them.

7. If pursuant to this Statement, the Court disposes of these proceedings against the Relevant Respondents by way of the Carecraft Procedure:

7.1 The Petitioner and the Relevant Respondents agree that the Petitioner shall not seek an order under section 214(2)(e) of the SFO against the Relevant Respondents to pay compensation to the Company in respect of the loss it suffered in the 2007 Acquisition and/or 2009 Acquisition (as the case may be).

7.2 The Petitioner and the Relevant Respondents agree that the Petitioner shall not seek an order under section 214(2)(b) of the SFO for the Company and/or for the Company to procure any one or more of its subsidiaries, to institute proceedings against the Relevant Respondents to pay compensation to the Company for the loss it suffered in the 2007 Acquisition and/or 2009 Acquisition (as the case may be).

7.3 Each of the Relevant Respondents agrees to pay, and the Petitioner accepts, the sum of HK$250,000 in full and final settlement of each of the Relevant Respondent’s share of the Petitioner’s costs in these proceedings (inclusive of the Petitioner’s costs for the hearing for the Carecraft Procedure against the Relevant Respondents).

8. In the event that the Court makes any order sought against the Relevant Respondents by reference to this Statement, the Petitioner and the Relevant Respondents agree that they will jointly apply to the Court for a direction that this Statement be annexed to a judgment of the Court.

9. Furthermore, without prejudice to all of the Petitioner’s rights, the Petitioner specifically reserves the right to (a) disclose this Statement to third parties where it appears proper to do so in the public interest, including, but not limited to, making use of the Statement for the purpose of any press release issued in respect of these proceedings, and (b) refer to this Statement for purposes ancillary to, connected with and/or arising out of these proceedings.

PART II – STATEMENT OF AGREED FACTS

A. INTRODUCTION AND BACKGROUND

A1. The Company

1. Superb Summit was incorporated on 29 January 2001 in the Cayman Islands and was at all material times and is a non-Hong Kong company (no. F11367) registered under Part XI of the predecessor Companies Ordinance (Cap. 32), now Part 16 of the Companies Ordinance (Cap. 622) (CO).

2. Over the years, the Company has changed its name several times. It used the names of:

2.1 Tak Shun Technology Group Limited (德信科技集團有限公司) from its date of incorporation to 25 January 2008;

2.2 Superb Summit International Timber Company Limited (奇峰國際木業有限公司) from 25 January 2008 to 19 September 2012; and

2.3 Superb Summit International Group Limited (奇峰國際集團有限公司) from 19 September 2012 onwards.

3. The registered office of Superb Summit was at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111 Cayman Islands. Its head office and principal place of business was, until 31 August 2020, at Room 2013, 20/F., Pico Tower, 66 Gloucester Road, Wanchai, Hong Kong.

4. The share capital of Superb Summit is divided into 10,000,000,000 shares of nominal value of HKD 0.10 each. As at 20 November 2014, the amount of the capital paid up or credited as paid up was HKD 11.958 billion.

5. The objects for which Superb Summit was established are set out in Article 3 of its Memorandum of Association and include (without limitation): general trading, importing, exporting, buying, selling and dealing in goods, materials, substances, articles and merchandise of all kinds in, from and to any part of the world, whether as principal or as agent.

6. Since its incorporation until around June 2010, the Company engaged in the business of manufacturing and trading of electronic calculators and other electronic products and liquid crystal display units.

7. Following the 2007 Acquisition (defined below) on 8 October 2007, the Company has diversified its business into the integrated timber business including (a) the development and management of timber resources in the Mainland of the People’s Republic of China (Mainland) and (b) the distribution, marketing and sales of a wide range of timber products.

8. Between 18 September 2001 and 3 June 2020, Superb Summit’s shares were listed on the Main Board of the Stock Exchange of Hong Kong Limited (SEHK).

9. On 20 November 2014, at the request of the Company, trading in the Company’s shares on the SEHK was halted pending the release of a clarification announcement in relation to inside information of the Company. On 15 December 2015, trading and all dealings in the Company’s shares on the SEHK were suspended by the SEHK at the SFC’s direction pursuant to section 8 of the Securities and Futures (Stock Market Listing) Rules (Cap 571V).

10. On 4 June 2020, the SEHK cancelled the listing of Superb Summit’s shares pursuant to Rule 6.01A of the Main Board Listing Rules (LR).

A2. The Relevant Respondents

11. The 9^th Respondent, Law Wai Fai, was a former executive director (ED) from 31 July 2001 to 22 June 2010, the company secretary from 31 July 2001 to 2 February 2007, and financial controller from 2000 to June 2010 of the Company.

12. The 11^th Respondent, Li Jun, was a former vice chairman cum ED of the Company from 2 February 2007 to 10 February 2009.

13. The 12^th Respondent, Cheng Man For, was a former ED from 23 October 2007 to 22 October 2012 and the company secretary from 2 February 2007 to 9 October 2012.

14. At the material times, each of the Relevant Respondents owed to the Company, inter alia, fiduciary duties as an officer/director of the Company and a duty of care at common law to:

14.1 act with or exercise due and reasonable care, skill and diligence that would be exercised by a reasonably diligent person with (i) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as carried out by a director in relation to the Company and (ii) the general knowledge, skill and experience that the director has;

14.2 collectively and individually, continually acquire and maintain a sufficient knowledge and understanding of the business of the Company as well as its subsidiaries (Group) to enable him to properly discharge his duties as an officer of the Company; and

14.3 where a director has delegated some of the managerial or financial responsibilities to his subordinates or other fellow officers, a duty to supervise the discharge of the delegated functions.

15. At all material times, the Relevant Respondents, collectively and individually, were also obliged to ensure the Company's compliance with the legal and regulatory requirements (including the LR) that were applicable to the Company.

A3. Relevant Individuals

16. At all material times in respect of the Company’s acquisition of various forestry assets in 2007 (2007 Acquisition), the following individuals, among others, were officers and EDs of the Company:

Name	Position	Other Roles
Law Wai Fai (9th Respondent)	ED (31.07.2001 – 22.06.2010) Company secretary (31.07.2001– 02.02.2007) Financial Controller (2000 – 06.2010)
Li Jun (11th Respondent)	ED and Vice-Chairman (02.02.2007 – 10.02.2009)
Cheng Man For (12th Respondent)	Company secretary (02.02.2007 – 09.10.2012)	One of the authorized signatories of the Company’s bank accounts with Bank of China (Hong Kong) Limited (BOC)

17. At all material times in respect of the Company’s acquisition of various forestry assets in 2009 (2009 Acquisition), the Company had the following key officers, among others:

Name	Position	Other Roles
Law Wai Fai (9th Respondent)	ED (31.07.2001 – 22.06.2010) Company secretary (31.07.2001– 02.02.2007) Financial Controller (2000 – 06.2010)
Cheung Man For (12th Respondent)	ED (23.10.2007 – 22.10.2012) Company secretary (02.02.2007 – 09.10.2012)	One of the authorized signatories of the Company’s bank accounts with BOC

B. THE FORESTRY CASE

B1. Background and Chronology of the 2007 and 2009 Acquisitions

18. On 12 April 2007, the Company entered into a letter of intent with Superview International Limited (Superview) in relation to the 2007 Acquisition, with the consideration to be determined pending negotiation and due diligence on various aspects of the 2007 Acquisition. A profit guarantee (see paragraph 20.8 below) was also contemplated.

19. On 16 May 2007, the Company and Superview entered into a share transfer agreement (2007 STA) in respect of the 2007 Acquisition.

20. On 8 June 2007, Superb Summit issued an announcement (2007 Announcement) in relation to the 2007 STA and the 2007 Acquisition, which included the following details:

20.1 Pursuant to the 2007 STA, the Company as purchaser agreed to acquire from Superview as vendor 70 shares representing 70% of the issued share capital of Green and Good Group Limited (Green & Good) at a total consideration of HKD 1.38 billon (2007 Acquisition Consideration), with Yiu Yat On (Yiu), Ho Kam Hung (Ho) and Qian Mingjin (Qian) (being holders of 56%, 25% and 19% of the issued share capital of Superview respectively) as guarantors.

20.2 Prior to the 2007 STA, Superview was the sole shareholder of Green & Good.

20.3 Green & Good’s only asset was the entire equity interest in Leeka Wood Company Limited[38] (Leeka Wood) (綠之嘉木業有限公司) (collectively Green & Good Group).

20.4 Based on the information available to the Company in the course of the due diligence exercise in respect of Green & Good, Leeka Wood possessed about 329,898 Chinese mu of timber resources covering various regions in Yunnan, Hunan and Hebei, among which were forestry assets (Alleged Forests) in:

20.4.1 Jiangcheng, Yunnan (100,996 mu; the term of the land use rights was for 40 years);

20.4.2 Heishan, Yunnan (81,546 mu; the term of the land use rights was for 50 years); and

20.4.3 Mapu, Yunnan (46,358 mu; the term of the land use rights was for 40 years).

The Alleged Forests accounted for 69% of the total forest land purportedly held by Leeka Wood.

20.5 The status of forest ownership certificates (FOCs) (林權證) in respect of the Alleged Forests were set out in the 2007 Announcement as follows:

“Obtained forest ownership certificate from the local forestry government department where the forest land is located but the application for forest ownership certificate from the state forestry department is still in progress.”

20.6 The 2007 Acquisition Consideration was HKD 1.38 billion, to be satisfied in the following manner:

20.6.1 HKD 200 million in cash to be payable upon completion;

20.6.2 HKD 250,311,150 by the allotment and issue of 556,247,000 Consideration Shares, credited as fully paid, to Superview upon completion (i.e. equivalent to HKD 0.45 per consideration share); and

20.6.3 The remaining balance of HKD 929,688,850 by issue of the convertible notes with a conversion price at HKD 0.45 per conversion share to Superview upon completion (2007 Convertible Notes).

20.7 Part of the 2007 Convertible Notes with a two-year term in a principal amount of HKD 300 million (Restricted Convertible Notes) were not convertible until 31 March 2009 and after all liabilities in respect of the Profit Guarantee (defined below) had been discharged in full.

20.8 The Profit Guarantee referred to the joint and several undertaking by Superview as vendor and Yiu, Ho and Qian as guarantors that the audited consolidated net profit after tax of Green & Good Group (prepared in accordance and compliance with Hong Kong Generally Accepted Accounting Principles) for the two financial years ending 31 December 2007 and 2008 would not be less than HKD 300 million and that they would compensate the Company for any shortfall.

20.9 In the event that the conversion rights attaching to the Convertible Notes were fully exercised by Superview, the conversion shares thereunder (Conversion Shares) would amount to approximately 74.3% of the existing issued share capital of the Company and approximately 38.2% of the then issued share capital of the Company as enlarged by the issue of the Consideration Shares and Conversion Shares.

20.10 The 2007 Acquisition Consideration had been determined with reference to, among other things, (i) the business prospect, potential profitability, market scalability and product mix of Leeka Wood and its subsidiaries, (ii) the asset quality back-up by Green & Good Group; and (iii) the Profit Guarantee.

20.11 As at the date of the 2007 Announcement, HKD 100 million had been deposited by the Company as refundable interest-bearing deposit.

21. On 3 September 2007, the Company issued a circular (2007 Circular) providing reasons for and further details of the 2007 Acquisition, and giving notice of an extraordinary general meeting for the consideration and approval of, among other things, the 2007 Acquisition, the issue of Consideration Shares and Convertible Notes.

22. In the 2007 Circular, Lam Ping Kei (the then Chairman and on behalf of the board of the Company) confirmed that, in respect of the Alleged Forests, the forestry department of local government had not issued any FOC – the status of the FOCs in respect of the Alleged Forests was set out as follows:

“Obtained forest ownership letter (the temporary ownership document) from the forestry department of local government where the forest land is located but the application for forest ownership certificate from the forestry department of local government is still in progress”

23. A significant difference between the 2007 Announcement and the 2007 Circular was that, in respect of the Alleged Forests:

23.1 The 2007 Announcement represented that FOCs had been issued by the local forestry government department (see paragraph 20.5 above); but

23.2 The 2007 Circular represented that only forest ownership letters (FOLs), but not FOCs, had been issued by the forestry department of local government (see paragraph 22 above).

24. The 2007 Circular revealed that the assets of Green & Good had been valued at approximately HKD 3.279 billion as at 30 June 2007 by LCH (Asia-Pacific) Surveyors Limited (LCH), and provided further details at Appendix V thereto (containing LCH’s valuation report on the assets proposed to be acquired by the Company (LCH’s 2007 Valuation Report)).

25. On 15 October 2007, the Company made an announcement (15.10.2007 Announcement) announcing the completion of 2007 Acquisition on 8 October 2007.

26. On 27 April 2009, Superb Summit issued an announcement (27.04.2009 Announcement) that:

26.1 The Profit Guarantee was not met and the shortfall amounted to approximately HKD 725,111,000 (Shortfall).

26.2 As at the date of the 27.04.2009 Announcement, Superview has settled approximately 55% of the Shortfall by way of set-off against the Restricted Convertible Notes (HKD 300 million) and set-off against other amounts due to Superview (HKD 100 million).

26.3 The remaining Shortfall amount of approximately HKD 325,111,000 (Outstanding Shortfall) would be compensated by way of cash or other methods as agreed by Superb Summit.

26.4 Superview and Superb Summit were in the process of negotiating a settlement arrangement in relation to the Outstanding Shortfall.

27. On 9 June 2009, Superb Summit and Superview entered into an extension agreement pursuant to which Superb Summit would extend the payment date of the Outstanding Shortfall from 9 June 2009 to 8 September 2009, with interest at 6.5% per annum payable on 8 September 2009 (Extension Agreement).

28. On 29 June 2009, Superb Summit entered into a Memorandum of Understanding with Superview in relation to the intention to enter into a series of transactions including the 2009 Acquisition.

29. On 10 July 2009, Superb Summit entered into a Conditional Share Transfer Agreement (2009 CSTA) in respect of:

29.1 The 2009 Acquisition;

29.2 The disposal of Leeka Wood’s 67.7% equity interest in 綠之嘉木制品制造有限公司 (G&G Wood), a substantially inactive company which has contributed to the loss of Green & Good, to Superview; and

29.3 The release of the respective counter guarantee obligations of Leeka Wood and G&G Wood to a third party guarantor 金聯通信用擔保有限公司 for the bank loan under the “Counter Guarantee Agreements” by Superview.

(collectively, the 2009 Transactions)

30. On 23 July 2009, Superb Summit issued an announcement (2009 Announcement) that it has entered into the 2009 CSTA in respect of the 2009 Transactions on 10 July 2009.

31. On 23 October 2009, Superb Summit issued a circular (2009 Circular) providing reasons for and further details of the 2009 Transactions, and giving notice for an extraordinary general meeting for the consideration and approval of, among other things, the 2009 Transactions. It stated, among other things, that:

31.1 The consideration for the 2009 Acquisition was HKD 751,990,000 (2009 Acquisition Consideration), equivalent to a discount of 16% to the net asset value of Green & Good attributed to 30% of the net consolidated asset value of Green & Good including Leeka Wood and G&G Wood.

31.2 Superb Summit would set off the Outstanding Shortfall of HKD 335,011,000 (i.e. principal amount of HKD 325,111,000 plus interest) owed by Superview to the Company against the 2009 Acquisition Consideration. The remaining balance of the 2009 Acquisition Consideration in the sum of HKD 416,979,000 would be settled by the issuance of convertible notes by Superb Summit to Superview on the completion date (2009 Acquisition Convertible Notes)[39].

32. On 27 November 2009, Superb Summit issued an announcement (27.11.2009 Announcement) that all conditions to the 2009 CSTA had been fulfilled, and the 2009 Transactions had been completed on 27 November 2009, such that the Outstanding Shortfall had been extinguished, G&G Wood ceased to be a subsidiary of Superb Summit, and Green & Good had become a wholly owned subsidiary of Superb Summit.

33. On 30 December 2010, Leeka Wood entered into a transfer agreement to transfer the relevant rights in the Alleged Forests (Alleged Forestry Rights) to 綠之嘉木業（普洱）有限公司 (Leeka Wood (Pu’er)), another wholly owned subsidiary of Superb Summit.

B2. Ownership of Alleged Forests and Alleged Forestry Rights

34. For the purposes of both the 2007 Acquisition and 2009 Acquisition, Leeka Wood and in turn Green & Good did not own the Alleged Forests and the Alleged Forestry Rights.

34.1 The purported genesis of the Alleged Forestry Rights was the transfer from farmers and villagers in Yunnan to 思茅市翠雲區伊祿木材加工廠 (Simao) prior to December 2006.

34.2 Thereafter, on 13 December 2006 and 26 December 2006, Simao and Leeka Wood purportedly entered into three transfer agreements in respect of the Alleged Forestry Rights. On 10 July 2007, Simao further entered into three supplemental agreements with Leeka Wood in respect of the same. These are collectively referred to as the Simao Agreements.

34.3 The three responsible competent authorities administering the laws governing the Alleged Forestry Rights are as follows:

34.3.1 In respect of the Alleged Forests allegedly located in Jiangcheng – the Forestry Bureau of Jiangcheng Hani and Yi Autonomous County;

34.3.2 In respect of the Alleged Forests allegedly located in Heishan – the Forestry Bureau of Lancang Lahu Autonomous County; and

34.3.3 In respect of the Alleged Forests allegedly located in Mapu – the Forestry Bureau of Ning’er Hani and Yi Autonomous County.

(collectively, the Forestry Bureaux)

35. As it transpires, the Forestry Bureaux had no record of the Simao Agreements. The Simao Agreements had not gone through any approval or record documentation process with any of the Forestry Bureaux.

36. By way of a letter dated 16 June 2016, the China Securities Regulatory Commission confirmed to the Petitioner and observed that:

36.1 The Forestry Bureaux had not issued any FOLs to Leeka Wood or Leeka Wood (Pu’er) – “均未对绿之嘉木业有限公司及/或绿之嘉木业（普洱）有限公司进行过答复，也未曾出具林权证明。”

36.2 The Alleged Forests had not been registered with the Forestry Bureaux, and that Leeka Wood had never registered any other forests with the Forestry Bureaux – “贵会提供资料（附件3）涉及的3宗林地未在澜沧等三县登记，绿之嘉木业有限公司也未在澜沧等三县登记过其他林地。”

36.3 There were obvious inconsistencies between the chops affixed on certain FOLs and the official chops – “公章存在明显不一致”.

37. The Forestry Bureaux had not issued the 15 FOLs which were relied on by Superb Summit to purportedly establish the existence of and the chain of ownership concerning the Alleged Forests, either during or after the 2007 and 2009 Acquisitions.

38. There was an absence of the anti-counterfeiting code (防伪码) on the seals affixed on the FOLs purportedly issued in relation to the Alleged Forests and missing characters in the names shown on such FOLs / seals (such as the missing characters of “人民政府”).

39. The Relevant Respondents do not dispute the above matters as revealed by the Petitioner’s investigation.

B3. Materiality of the Alleged Forestry Rights

40. The Alleged Forests are significant in terms of land size. The Alleged Forestry Rights are also significant in terms of market price.

40.1 At all material times, the Alleged Forests accounted for about 69%[40] to 72%[41] of the total land size of all the forestry assets purportedly held by Leeka Wood.

40.2 The market value of the Alleged Forestry Rights was approximately RMB 2,513.01 million to RMB 2,620 million. They accounted for 76.64% to 82.54% of the purported total value of Green & Good, the issued share capital of which formed the subject matter of the 2007 and 2009 Acquisitions.

40.3 Assuming the share of value of the Alleged Forestry Rights in the market value of Green & Good was proportionate to that in the 2007 Acquisition Consideration (HKD 1.38 billion) and the 2009 Acquisition Consideration (HKD 751,990,000) respectively, the Company would have been effectively paying HKD 1,057,632,000/RMB 1,057,632,000[42] for a 70% interest in the Alleged Forests in the 2007 Acquisition, and HKD 620,692,546/RMB 543,038,098[43] for the remaining 30% interest in the Alleged Forests in the 2009 Acquisition.

40.4 In other words, Green & Good did not own the Alleged Forestry Rights and the Company has paid HKD 1.678 billion / RMB 1.601 billion for non-existent assets during the course of the 2007 and 2009 Acquisitions.

41. The Alleged Forestry Rights are a significant and material aspect of the 2007 and 2009 Acquisitions.

42. The Relevant Respondents do not dispute the above matters as revealed by the Petitioner’s investigation.

B4. Downward Adjustment in the Company’s Financial Reports

43. On the basis that the Company or the Group did not own the Alleged Forestry Rights, significant downward adjustments ought to be made to the respective balances of Biological Assets (recorded as HKD2,786,364,100 in the 2014 annual report of the Group, and attributable to the Alleged Forestry Rights), Prepaid Land Lease Payments (recorded as HKD 48,824,716 in the 2014 annual report of the Group) and Revenue (recorded as HKD 33,942,000 in the 2014 annual report of the Group).

43.1 The downward adjustments would have a material impact on the relevant financial statements of the Group at the material time, and there would be a material impact on the Group’s principal activities in relation to at least the timber-related activities in the Mainland.

43.2 On the basis that the Group did not hold the Alleged Forestry Rights, there is a high degree of uncertainty in respect of the continuality/sustainability of the timber business of the Group.

43.3 As a corollary of the above, the investing public has been misled by Superb Summit’s revenue and profitability which were false or misleading in material respects in the manner described and has been prevented from accurately assessing the risk of their investment or making an informed investment decision.

C. LOSSES SUFFERED BY THE GROUP AND FINANCIAL BENEFITS OBTAINED BY THIRD PARTIES

44. By reason of the matters stated above, the Company has suffered loss as a result of the 2007 Acquisition and 2009 Acquisition.

45. As stated above, on the basis that Green & Wood did not own the Alleged Forestry Rights, the Company had paid HKD 1.678 billion / RMB 1.601 billion for non-existent assets during the course of the 2007 and 2009 Acquisitions.

D. SECTION 214 PETITION FOR DISQUALIFICATION ORDERS

46. By reason of the matters aforesaid, Superb Summit’s business or affairs had been conducted in a manner:

46.1 Oppressive to its members or any part of its members under section 214(1)(a) of the SFO;

46.2 Involving misfeasance or other misconduct towards it or its members or any part of its members under section 214(1)(b) of the SFO;

46.3 Resulting in its members or any part of its members not having been given all the information in respect of its business or affairs that they might reasonably expect under section 214(l)(c) of the SFO; and

46.4 Unfairly prejudicial to its members or any part of its members under section 214(l)(d) of the SFO.

47. For the reasons set out in sections D1 and D2 below, the Relevant Respondents were amongst the officers of the Company who were responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 46 above.

D1. The 9^th and 11^th Respondents – 2007 Acquisition

48. The 9^th and 11^th Respondents admit, agree and accept that in approving the 2007 Acquisition, they had acted in a negligent manner, displayed incompetence, and breached their duty of care towards the Company. Further, they were amongst the officers of the Company who were responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 46 above.

49. The 9^th and 11^th Respondents admit, agree and accept the following.

50. Firstly, the 9^th and 11^th Respondents should have reviewed the Simao Agreements, those being the source of Leeka Wood’s ownership of the Alleged Forestry Rights.

50.1 Had the directors done so, they would have noticed that although the appendix to the relevant Simao Agreement relating to the Mapu forests purported to exhibit the agreement of the villagers to transfer the forestry rights thereto to Simao, the said appendix titled “村民同意轉讓聯名簽字畫押簿” was actually a blank page.

50.2 One ought to immediately raise queries as to the basis on which Simao had the relevant forestry rights to transfer to Leeka Wood, and as to why the relevant forestry authorities would have nonetheless issued the relevant FOL.

51. Secondly, the 9^th and 11^th Respondents, having read the legal opinion obtained from De Heng Law Offices (De Heng) on which Superb Summit placed reliance (De Heng Legal Opinion), ought to have noticed the disclaimer on page 4 that De Heng would not verify the authenticity of any of the documents provided, and had provided the De Heng Legal Opinion on the basis of Green & Good’s guarantee that the documents, materials, confirmations were authentic, complete and effective. Upon noticing the disclaimer, the 9^th and 11^th Respondents should have at least questioned whether it was necessary to verify the authenticity of the FOLs, those substantiating the Alleged Forestry Rights that became the subject matter of the 2007 Acquisition.

52. Thirdly, the 9^th and 11^th Respondents ought to have questioned or applied their mind to the methodology adopted or the assumptions made by the professional parties in reaching the respective conclusions.

53. Fourthly, the 9^th and 11^th Respondents ought to have inspected the FOLs being the primary documents to substantiate the existence of the Alleged Forestry Rights. Had they done so as part of their proper and reasonable due diligence, it would have revealed that the information stated in the relevant FOLs (that the deposits under the Simao Agreements have been paid already) was incorrect.

53.1 At the time of the completion of the 2007 Acquisition in October 2007, Leeka Wood only paid 0.7% of the said total consideration under the Simao Agreements to Simao in respect of the Alleged Forestry Rights. The remaining consideration for the transfers of Alleged Forestry Rights under the Simao Agreements was purportedly paid between December 2007 and November 2011.

53.2 By way of illustration, insofar as the Alleged Forestry Rights for the Alleged Forest in Jiangcheng are concerned, the relevant Simao Agreement provided at clause 5.1 that the deposit payable by Leeka Woods was in the amount of RMB 25.5 million (as 30% of the consideration thereunder). This amount far exceeded the RMB 1.5 million paid as at the date of completion of the 2007 Acquisition.

53.3 Had the 9^th and 11^th Respondents inspected the FOLs, upon reading the second paragraph stating that Leeka Wood had already paid the agreed deposit (“2、你公司已按照合同约定支付了首付款项”), a reasonably diligent director would have asked for proof in support of at least the said paragraph to confirm Leeka Wood’s payment of the deposit to Simao.

54. The 9^th and 11^th Respondents admit, agree and accept that they have not taken any or all of the steps described in paragraphs 50 to 53 above. In the premises, by reason of their negligence, they were amongst the officers of the Company who were responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 46 above.

D2. The 9^th and 12^th Respondents – 2009 Acquisition

D2(a) Liability in respect of Due Diligence

55. The 9^th and 12^th Respondents admit, agree and accept that in approving the 2009 Acquisition, they were negligent in relation to the pertinent question of ownership of the Alleged Forests.

56. Further, the 9^th and 12^th Respondents admit, agree and accept that they acted in an incompetent manner and breached their duty of care towards the Company, in light of the fact that they were involved in the 2007 Acquisition as the ED (9^th Respondent) and the company secretary (12^th Respondent) of the Company.

57. By reason of the aforesaid, the 9^th and 12^th Respondents admit, agree and accept that they were amongst the officers of the Company who were responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 46 above.

D2(b) Liability in respect of Publication of the 2009 Announcement and 2009 Circular

58. All directors at the material time (including the 9^th and 12^th Respondents) attended the board meeting on 10 July 2009 at 4:30pm in which the issuance of the 2009 Announcement was approved.

59. All EDs at the material time (including the 9^th and 12 Respondents) were present at the board meeting on 20 October 2009 at 4:00pm in which the issuance of the 2009 Circular was approved.

60. By reason of the matters stated above, the 9^th and 12^th Respondents admit, agree and accept that the 2009 Announcement and 2009 Circular were false or misleading as to a material fact:

60.1 Information disclosed in relation to the status of FOLs, size of forest lands, harvest details and the market value of the assets of Green & Good were false or misleading due to the non-existence of the Alleged Forestry Rights.

60.2 Such information was material as the forestry assets were the most material assets in the balance sheet of Green & Good and Leeka Wood. Reference is made to section B3 above.

61. In the premises, the 9^th and 12^th Respondents admit, agree and accept that, coupled with their negligence in relation to the due diligence aspect of the 2009 Acquisition, they were negligent in approving both of the 2009 Announcement and the 2009 Circular.

D2(c) Conclusion on the 9^th and 12^th Respondents

62. In the premises, the 9^th and 12^th Respondents admit, agree and accept that they were amongst the officers of the Company who were responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 46 above.

E. AGREED MITIGATING FACTOR

63. The Relevant Respondents have been cooperative in relation to these proceedings with the Petitioner and accept liability.

64. The Relevant Respondents have adopted a reasonable course of action in agreeing to conclude these proceedings by way of the Carecraft Procedure which saves the time and costs of the Petitioner and the Court, and in agreeing to pay their respective share of the Petitioner’s costs incurred up to and including the hearing of the Carecraft Procedure.

65. The Relevant Respondents did not exhibit any dishonesty or lack of integrity.

66. The Relevant Respondents did not gain any personal or economic benefit from their negligence.

PART III – AGREED PROPOSED ORDERS

1. On the basis of the agreed facts and the agreed mitigating factors set out in Part II above, the Petitioner and the 9^th Respondent agree and submit that it would be appropriate for an order to be made against the 9^th Respondent under section 214(2)(a) and 214(2)(d) of the SFO, that the 9^th Respondent shall not, for a period of 42 months (i.e. 3.5 years), without leave of the Court:

1.1 be, or continue to be, a director, liquidator, or receiver or manager of the property or business, of the Company or any other corporation including any of the Company’s subsidiaries and affiliates; and

1.2 in any way, directly or indirectly, be concerned, or take part, in the management of the Company or any other corporation including any of the Company’s subsidiaries and affiliates.

2. On the basis of the agreed facts and the agreed mitigating factors set out in Part II above, the Petitioner and the 11^th Respondent agree and submit that it would be appropriate for an order to be made against the 11^th Respondent under section 214(2)(a) and 214(2)(d) of the SFO, that the 11^th Respondent shall not, for a period of 30 months (i.e. 2.5 years), without leave of the Court:

2.1 be, or continue to be, a director, liquidator, or receiver or manager of the property or business, of the Company or any other corporation including any of the Company’s subsidiaries and affiliates; and

2.2 in any way, directly or indirectly, be concerned, or take part, in the management of the Company or any other corporation including any of the Company’s subsidiaries and affiliates.

3. On the basis of the agreed facts and the agreed mitigating factors set out in Part II above, the Petitioner and the 12^th Respondent agree and submit that it would be appropriate for an order to be made against the 12^th Respondent under section 214(2)(a) and 214(2)(d) of the SFO, that the 12^th Respondent shall not, for a period of 42 months (i.e. 3.5 years), without leave of the Court:

3.1 be, or continue to be, a director, liquidator, or receiver or manager of the property or business, of the Company or any other corporation including any of the Company’s subsidiaries and affiliates; and

3.2 in any way, directly or indirectly, be concerned, or take part, in the management of the Company or any other corporation including any of the Company’s subsidiaries and affiliates.

4. If, pursuant to this Statement, the Court disposes of these proceedings against the Relevant Respondents by way of the Carecraft Procedure, each of the Relevant Respondents agrees to pay the Petitioner’s costs in these proceedings in the sum of HK$250,000 (inclusive of the Petitioner’s costs for the hearing of the Carecraft Procedure against the Relevant Respondents).

Dated this 18^th day of July 2025

[SIGNED]			[SIGNED]
Securities and Futures Commission The Petitioner Signed by Jasmine Chan, for and on behalf of the Petitioner			Messrs Fan Wong & Tso Solicitors for the 9th, 11th and 12th Respondents

Appendix 1

Definitions

In this Statement:

“corporation” means a company or other body corporate incorporated either in Hong Kong or elsewhere;

“company” means a company as defined in section 2(1) of the Companies Ordinance (Cap. 622).  The expression “company” in the definitions of subsidiary, holding company and affiliate below, shall be read as including a corporation;

“subsidiary” means, with respect to its holding company, a company:

i. the composition of the board of directors of which is directly or indirectly controlled by the holding company; or

ii. more than half of the issued share capital of which is directly or indirectly controlled by the holding company; or

iii. which is a subsidiary of a company which is a subsidiary of the holding company; or

iv. which is accounted for and consolidated in the holding company's consolidated financial statements;

“holding company” in relation to a company shall be read as a reference to a company of which that last-mentioned company is a subsidiary; and

“affiliate” in respect of a company, means any subsidiaries or holding companies of such company or any subsidiaries of any of the holding companies of such company.

Annex 2

STATEMENT OF AGREED FACTS FOR CARECRAFT PROCEDURE BETWEEN THE PETITIONER AND THE

13^th RESPONDENT

PART I — INTRODUCTION

1. On 18 December 2020, the Securities and Futures Commission (Petitioner) presented a petition pursuant to section 214(2) of the Securities and Futures Ordinance (Cap. 571) (SFO) seeking, among other things:

(1) An order under section 214(2)(a) and/or section 214(2)(d) of the SFO that each of the 2^nd to 16^th Respondents shall not, for such periods as the Court shall consider appropriate, without leave of the Court:

(a) be, or continue to be, a director, liquidator, or receiver or manager of the property or business, of Superb Summit International Group Limited (Superb Summit or Company) or any other corporation including any of the Company's subsidiaries and affiliates; and

(b) in any way, directly or indirectly, be concerned, or take part, in the management of the Company or any other corporation including any of the Company's subsidiaries and affiliates; and

(2) Costs.

2. On 26 April 2021, the petition was amended pursuant to the Order of Master Rita So dated 21 April 2021. The definitions of “corporation”, “subsidiary” and “affiliate” are set out in Appendix 1 to this Statement.

A. PURPOSE

3. Subject to the approval of the Court, the Petitioner and the 13^th Respondent have agreed to dispose of these proceedings against him by way of the summary procedure (Carecraft Procedure) sanctioned in Re Carecraft Construction Co. Ltd. [1994] 1 WLR 172, as clarified by the English Court of Appeal in Secretary of State for Trade and Industry v Rogers [1996] 1 WLR 1569 and as adopted by the Court in a number of cases in respect of proceedings under section 214 of the SFO.

4. This Statement sets out the material facts relied upon by the Petitioner in these proceedings that are not disputed by the 13^th Respondent, for the purpose of disposing of these proceedings against him by way of the Carecraft Procedure.

5. The facts set out in this Statement are not disputed between the Petitioner and the 13^th Respondent on the basis that the case against him will be dealt with by the Court by way of the Carecraft Procedure. If the Court for any reason is of the view that these proceedings shall not be dealt with by the Carecraft Procedure or that a full hearing is appropriate, no admission or concession by the Petitioner or the 13^th Respondent and none of the proposed orders referred to below or liability to pay costs shall be referred to or relied on by any of the parties at any subsequent hearing without the prior written consent of the Petitioner and the 13^th Respondent.

6. For the purpose of resolving these proceedings against the 13^th Respondent by way of the Carecraft Procedure, and by reference to the facts set out in Part II of this Statement (which the 13^th Respondent admits and accepts), the 13^th Respondent accepts that during the relevant period, the business and affairs of the Company have been conducted in a manner described in section 214(1)(a) to (d) of the SFO, namely:

(1) oppressive to its members or any part of its members;

(2) involving defalcation, fraud, misfeasance or other misconduct towards it or its members or any part of its members;

(3) resulting in its members or any part of its members not having been given all the information in respect of its business or affairs that they might reasonably expect; and

(4) unfairly prejudicial to its members or any part of its members.

B. UNOPPOSED ORDERS

7. On the basis of the facts set out in Part II of this Statement, the Petitioner and the 13^th Respondent agree, and the 13^th Respondent accepts, that it would be appropriate for the orders set out in Part III of this Statement below to be made against him.

8. If pursuant to this Statement, the Court disposes of these proceedings summarily, the 13^th Respondent agrees that there should additionally be an order that he pays the costs of the Petitioner in these proceedings, or such portion thereof as the Court thinks appropriate, to be taxed if not agreed with certificate for two counsel.

9. In the event that the Court makes any order sought against the 13^th Respondent by reference to this Statement, the Petitioner and the 13^th Respondent agree that they will jointly apply to the Court for a direction that this Statement be annexed to a judgment of the Court.

10. Furthermore, without prejudice to all of the Petitioner’s rights, the Petitioner specifically reserves the right to (a) disclose this Statement to third parties where it appears proper to do so in the public interest, including, but not limited to, making use of the Statement for the purpose of any press release issued in respect of these proceedings, and (b) refer to this Statement for purposes ancillary to, connected with and/or arising out of these proceedings.

PART II – STATEMENT OF AGREED FACTS

A. INTRODUCTION AND BACKGROUND

A1. The Company

1. Superb Summit was incorporated on 29 January 2001 in the Cayman Islands and was at all material times and is a non-Hong Kong company (no. F11367) registered under Part XI of the predecessor Companies Ordinance (Cap. 32), now Part 16 of the Companies Ordinance (Cap. 622) (CO).

2. Over the years, the Company has changed its name several times. It used the names of:

2.1 Tak Shun Technology Group Limited (德信科技集團有限公司) from its date of incorporation to 25 January 2008;

2.2 Superb Summit International Timber Company Limited (奇峰國際木業有限公司) from 25 January 2008 to 19 September 2012; and

2.3 Superb Summit International Group Limited (奇峰國際集團有限公司) from 19 September 2012 onwards.

3. The registered office of Superb Summit was at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111 Cayman Islands. Its head office and principal place of business was, until 31 August 2020, at Room 2013, 20/F., Pico Tower, 66 Gloucester Road, Wanchai, Hong Kong.

4. The share capital of Superb Summit is divided into 10,000,000,000 shares of nominal value of HKD 0.10 each. As at 20 November 2014, the amount of the capital paid up or credited as paid up was HKD 11.958 billion.

5. The objects for which Superb Summit was established are set out in Article 3 of its Memorandum of Association and include (without limitation): general trading, importing, exporting, buying, selling and dealing in goods, materials, substances, articles and merchandise of all kinds in, from and to any part of the world, whether as principal or as agent.

6. Between 18 September 2001 and 3 June 2020, Superb Summit’s shares were listed on the Main Board of the Stock Exchange of Hong Kong Limited (SEHK).

7. Superb Summit was principally engaged in integrated timber business including (a) the development and management of timber resources in the Mainland of the People’s Republic of China (Mainland) and (b) the distribution, marketing and sales of a wide range of timber products.

8. Since 2012, Superb Summit diversified its businesses and developed its business related to resource products other than timber and particularly in the bulk resources commodity trading sector. It was principally engaged in the exploitation and management of timber resources and sales of coal products and other bulk commodities in the Mainland. It also sought to participate in projects concerning new energy technology.

9. On 20 November 2014, at the request of the Company, trading in the Company’s shares on the SEHK was halted pending the release of a clarification announcement in relation to inside information of the Company. On 15 December 2015, trading and all dealings in the Company’s shares on the SEHK were suspended by the SEHK at the SFC’s direction pursuant to section 8 of the Securities and Futures (Stock Market Listing) Rules (Cap 571V).

10. On 4 June 2020, the SEHK cancelled the listing of Superb Summit’s shares pursuant to Rule 6.01A of the Main Board Listing Rules (LR).

A2. The 13^th Respondent

11. The 13^th Respondent, Qiu Jizhi, was a former independent non-executive director (INED) from 1 December 2005 to 19 August 2008 and a member of the Audit Committee.

12. At the material times, the 13^th Respondent owed to the Company, inter alia, fiduciary duties as directors of the Company and also a duty of care at common law to:

12.1 act with or exercise due and reasonable care, skill and diligence that would be exercised by a reasonably diligent person with (i) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as carried out by a director in relation to the Company and (ii) the general knowledge, skill and experience that the director has;

12.2 continually acquire and maintain a sufficient knowledge and understanding of the business of the Company as well as its subsidiaries (Group) to enable them to properly discharge their duties as officers of the Company; and

12.3 where a director has delegated some of the managerial or financial responsibilities to his subordinates or other fellow officers, a duty to supervise the discharge of the delegated functions.

13. At all material times, the 13^th Respondent was also obliged to ensure the Company's compliance with the legal and regulatory requirements (including the LR) that were applicable to the Company.

14. At all material times in respect of the Company’s acquisition of various forestry assets in 2007 (2007 Acquisition), the 13^th Respondent was an INED and a member of the Audit Committee of the Company.

B. THE FORESTRY CASE

B1. Background and Chronology of the 2007 and 2009 Acquisitions

15. On 12 April 2007, the Company entered into a letter of intent with Superview International Limited (Superview) in relation to the 2007 Acquisition, with the consideration to be determined pending negotiation and due diligence on various aspects of the 2007 Acquisition. A profit guarantee (see paragraph 17.8 below) was also contemplated.

16. On 16 May 2007, the Company and Superview entered into a share transfer agreement (2007 STA) in respect of the 2007 Acquisition.

17. On 8 June 2007 Superb Summit issued an announcement (2007 Announcement) in relation to the 2007 STA and the 2007 Acquisition, which included the following details:

17.1 Pursuant to the 2007 STA, the Company as purchaser agreed to acquire from Superview as vendor 70 shares representing 70% of the issued share capital of Green and Good Group Limited (Green & Good) at a total consideration of HKD 1.38 billon (2007 Acquisition Consideration), with Yiu Yat On (Yiu), Ho Kam Hung (Ho) and Qian Mingjin (Qian) (being holders of 56%, 25% and 19% of the issued share capital of Superview respectively) as guarantors.

17.2 Prior to the 2007 STA, Superview was the sole shareholder of Green & Good.

17.3 Green & Good’s only asset was the entire equity interest in Leeka Wood Company Limited[44] (Leeka Wood) (綠之嘉木業有限公司) (collectively Green & Good Group).

17.4 Based on the information available to the Company in the course of the due diligence exercise in respect of Green & Good, Leeka Wood possessed about 329,898 Chinese mu of timber resources covering various regions in Yunnan, Hunan and Hebei, among which were forestry assets (Alleged Forests) in:

17.4.1 Jiangcheng, Yunnan (100,996 mu; the term of the land use rights was for 40 years);

17.4.2 Heishan, Yunnan (81,546 mu; the term of the land use rights was for 50 years); and

17.4.3 Mapu, Yunnan (46,358 mu; the term of the land use rights was for 40 years).

17.5 The status of forest ownership certificates (FOCs) (林權證) in respect of the Alleged Forests were set out in the 2007 Announcement as follows:

“Obtained forest ownership certificate from the local forestry government department where the forest land is located but the application for forest ownership certificate from the state forestry department is still in progress.”

17.6 The 2007 Acquisition Consideration was HKD 1.38 billion, to be satisfied in the following manner:

17.6.1 HKD 200 million in cash to be payable upon completion;

17.6.2 HKD 250,311,150 by the allotment and issue of 556,247,000 Consideration Shares, credited as fully paid, to Superview upon completion (i.e. equivalent to HKD 0.45 per consideration share); and

17.6.3 The remaining balance of HKD 929,688,850 by issue of the convertible notes with a conversion price at HKD 0.45 per conversion share to Superview upon completion (2007 Convertible Notes).

17.7 Part of the 2007 Convertible Notes with a two-year term in a principal amount of HKD 300 million (Restricted Convertible Notes) were not convertible until 31 March 2009 and after all liabilities in respect of the Profit Guarantee (defined below) had been discharged in full.

17.8 The Profit Guarantee referred to the joint and several undertaking by Superview as vendor and Yiu, Ho and Qian as guarantors that the audited consolidated net profit after tax of Green & Good Group (prepared in accordance and compliance with Hong Kong Generally Accepted Accounting Principles) for the two financial years ending 31 December 2007 and 2008 would not be less than HKD 300 million and that they would compensate the Company for any shortfall.

17.9 In the event that the conversion rights attaching to the Convertible Notes were fully exercised by Superview, the conversion shares thereunder (Conversion Shares) would amount to approximately 74.3% of the existing issued share capital of the Company and approximately 38.2% of the then issued share capital of the Company as enlarged by the issue of the Consideration Shares and Conversion Shares.

17.10 The 2007 Acquisition Consideration had been determined with reference to, among other things, (i) the business prospect, potential profitability, market scalability and product mix of Leeka Wood and its subsidiaries, (ii) the asset quality back-up by Green & Good Group; and (iii) the Profit Guarantee.

17.11 As at the date of the 2007 Announcement, HKD 100 million had been deposited by the Company as refundable interest-bearing deposit.

18. On 3 September 2007, the Company issued a circular (2007 Circular) providing reasons for and further details of the 2007 Acquisition, and giving notice of an extraordinary general meeting for the consideration and approval of, among other things, the 2007 Acquisition, the issue of Consideration Shares and Convertible Notes.

19. In the 2007 Circular, Lam Ping Kei (the then Chairman and on behalf of the board of the Company) confirmed that, in respect of the Alleged Forests, the forestry department of local government had not issued any FOC – the status of the FOCs in respect of the Alleged Forests was set out as follows:

“Obtained forest ownership letter (the temporary ownership document) from the forestry department of local government where the forest land is located but the application for forest ownership certificate from the forestry department of local government is still in progress”

20. A significant difference between the 2007 Announcement and the 2007 Circular was that, in respect of the Alleged Forests:

20.1 The 2007 Announcement represented that FOCs had been issued by the local forestry government department (see paragraph 17.5 above); but

20.2 The 2007 Circular represented that only forest ownership letters (FOLs), but not FOCs, had been issued by the forestry department of local government (see paragraph 19 above).

21. The 2007 Circular revealed that the assets of Green & Good had been valued at approximately HKD 3.279 billion as at 30 June 2007 by LCH (Asia-Pacific) Surveyors Limited (LCH), and provided further details at Appendix V thereto (containing LCH’s valuation report on the assets proposed to be acquired by the Company (LCH’s 2007 Valuation Report)).

22. On 15 October 2007, the Company made an announcement (15.10.2007 Announcement) announcing the completion of 2007 Acquisition on 8 October 2007.

23. On 27 April 2009, Superb Summit issued an announcement (27.04.2009 Announcement) that:

23.1 The Profit Guarantee was not met and the shortfall amounted to approximately HKD 725,111,000 (Shortfall).

23.2 As at the date of the 27.04.2009 Announcement, Superview has settled approximately 55% of the Shortfall by way of set-off against the Restricted Convertible Notes (HKD 300 million) and set-off against other amounts due to Superview (HKD 100 million).

23.3 The remaining Shortfall amount of approximately HKD 325,111,000 (Outstanding Shortfall) would be compensated by way of cash or other methods as agreed by Superb Summit.

23.4 Superview and Superb Summit were in the process of negotiating a settlement arrangement in relation to the Outstanding Shortfall.

24. On 9 June 2009, Superb Summit and Superview entered into an extension agreement pursuant to which Superb Summit would extend the payment date of the Outstanding Shortfall from 9 June 2009 to 8 September 2009, with interest at 6.5% per annum payable on 8 September 2009 (Extension Agreement).

25. On 29 June 2009, Superb Summit entered into a Memorandum of Understanding with Superview in relation to the intention to enter into a series of transactions including the Company’s acquisition of various forestry assets in 2009 (2009 Acquisition).

26. On 10 July 2009, Superb Summit entered into a Conditional Share Transfer Agreement (2009 CSTA) in respect of:

26.1 The 2009 Acquisition;

26.2 The disposal of Leeka Wood’s 67.7% equity interest in 綠之嘉木制品制造有限公司 (G&G Wood), a substantially inactive company which has contributed to the loss of Green & Good, to Superview; and

26.3 The release of the respective counter guarantee obligations of Leeka Wood and G&G Wood to a third party guarantor 金聯通信用擔保有限公司 for the bank loan under the “Counter Guarantee Agreements” by Superview.

(collectively, the 2009 Transactions)

27. On 23 July 2009, Superb Summit issued an announcement (2009 Announcement) that it has entered into the 2009 CSTA in respect of the 2009 Transactions on 10 July 2009.

28. On 23 October 2009, Superb Summit issued a circular (2009 Circular) providing reasons for and further details of the 2009 Transactions, and giving notice for an extraordinary general meeting for the consideration and approval of, among other things, the 2009 Transactions. It stated, among other things, that:

28.1 The consideration for the 2009 Acquisition was HKD 751,990,000 (2009 Acquisition Consideration), equivalent to a discount of 16% to the net asset value of Green & Good attributed to 30% of the net consolidated asset value of Green & Good including Leeka Wood and G&G Wood.

28.2 Superb Summit would set off the Outstanding Shortfall of HKD 335,011,000 (i.e. principal amount of HKD 325,111,000 plus interest) owed by Superview to the Company against the 2009 Acquisition Consideration. The remaining balance of the 2009 Acquisition Consideration in the sum of HKD 416,979,000 would be settled by the issuance of convertible notes by Superb Summit to Superview on the completion date (2009 Acquisition Convertible Notes)[45].

29. On 27 November 2009, Superb Summit issued an announcement (27.11.2009 Announcement) that all conditions to the 2009 CSTA had been fulfilled, and the 2009 Transactions had been completed on 27 November 2009, such that the Outstanding Shortfall had been extinguished, G&G Wood ceased to be a subsidiary of Superb Summit, and Green & Good had become a wholly owned subsidiary of Superb Summit.

30. On 30 December 2010, Leeka Wood entered into a transfer agreement to transfer the relevant rights in the Alleged Forests (Alleged Forestry Rights) to 綠之嘉木業（普洱）有限公司 (Leeka Wood (Pu’er)), another wholly owned subsidiary of Superb Summit.

B2. False Ownership of Alleged Forests and Alleged Forestry Rights

31. The 13^th Respondent admits, accepts and agrees that, for the purposes of both the 2007 Acquisition and 2009 Acquisition, Leeka Wood and in turn Green & Good did not own the Alleged Forests and the Alleged Forestry Rights.

32. The 13^th Respondent admits, accepts and agrees that:

32.1 The purported genesis of the Alleged Forestry Rights was the transfer from farmers and villagers in Yunnan to 思茅市翠雲區伊祿木材加工廠 (Simao) prior to December 2006.

32.2 Thereafter, on 13 December 2006 and 26 December 2006, Simao and Leeka Wood purportedly entered into three transfer agreements in respect of the Alleged Forestry Rights. On 10 July 2007, Simao further entered into three supplemental agreements with Leeka Wood in respect of the same. These are collectively referred to as the Simao Agreements.

32.3 The three responsible competent authorities administering the laws governing the Alleged Forestry Rights are as follows:

32.3.1 In respect of the Alleged Forests allegedly located in Jiangcheng – the Forestry Bureau of Jiangcheng Hani and Yi Autonomous County;

32.3.2 In respect of the Alleged Forests allegedly located in Heishan – the Forestry Bureau of Lancang Lahu Autonomous County; and

32.3.3 In respect of the Alleged Forests allegedly located in Mapu – the Forestry Bureau of Ning’er Hani and Yi Autonomous County.

(collectively, the Forestry Bureaux)

33. As it transpires, the Forestry Bureaux had no record of the Simao Agreements. The Simao Agreements had not gone through any approval or record documentation process with any of the Forestry Bureaux.

34. By way of a letter dated 16 June 2016, the China Securities Regulatory Commission confirmed to the SFC and observed that:

34.1 The Forestry Bureaux had not issued any FOLs to Leeka Wood or Leeka Wood (Pu’er) – “均未对绿之嘉木业有限公司及/或绿之嘉木业（普洱）有限公司进行过答复，也未曾出具林权证明。”

34.2 The Alleged Forests had never been registered with the Forestry Bureaux, and that Leeka Wood had never registered any other forests with the Forestry Bureaux – “贵会提供资料（附件3 ）涉及的3宗林地未在澜沧等三县登记，绿之嘉木业有限公司也未在澜沧等三县登记过其他林地。”

34.3 There were obvious inconsistencies between the chops affixed on certain FOLs and the official chops – “公章存在明显不一致”.

35. The Forestry Bureaux never issued the 15 FOLs which were relied on by Superb Summit to purportedly establish the existence of and the chain of ownership concerning the Alleged Forests, either during or after the 2007 and 2009 Acquisitions.

36. There were also an absence of the anti-counterfeiting code (防伪码) on the seals affixed on the FOLs purportedly issued in relation to the Alleged Forests and missing characters in the names shown on such FOLs / seals (such as the missing characters of “人民政府”).

B3. Materiality of the Alleged Forestry Rights

37. The 13^th Respondent admits, accepts and agrees that the Alleged Forests are significant in terms of land size. The Alleged Forestry Rights are also significant in terms of market price.

37.1 At all material times, the Alleged Forests accounted for about 69%[46] to 72%[47] of the total land size of all the forestry assets purportedly held by Leeka Wood.

37.2 The market value of the Alleged Forestry Rights was approximately RMB 2,513.01 million to RMB 2,620 million. They accounted for 76.64% to 82.54% of the purported total value of Green & Good, the issued share capital of which formed the subject matter of the 2007 and 2009 Acquisitions.

37.3 Assuming the share of value of the Alleged Forestry Rights in the market value of Green & Good was proportionate to that in the 2007 Acquisition Consideration (HKD 1.38 billion) and the 2009 Acquisition Consideration (HKD 751,990,000) respectively, the Company would have been effectively paying HKD 1,057,632,000/RMB 1,057,632,000[48] for a 70% interest in the Alleged Forests in the 2007 Acquisition, and HKD 620,692,546/RMB 543,038,098[49] for the remaining 30% interest in the Alleged Forests in the 2009 Acquisition.

37.4 In other words, Green & Good did not own the Alleged Forestry Rights and the Company has paid HKD 1.678 billion / RMB 1.601 billion for non-existent assets during the course of the 2007 and 2009 Acquisitions.

38. The 13^th Respondent admits, accepts and agrees that the Alleged Forestry Rights are a significant and material aspect of the 2007 and 2009 Acquisitions.

B4. Downward Adjustment in the Company’s Financial Reports

39. On the basis that the Company or the Group did not own the Alleged Forestry Rights, the 13^th Respondent admits, accepts and agrees that significant downward adjustments ought to be made to the respective balances of Biological Assets, Prepaid Land Lease Payments and Revenue as stated in the Company’s published annual reports and interim reports.

40. The 13^th Respondent admits, accepts and agrees that:

40.1 There should be at least a reduction in Biological Assets by HKD 2,786,364,100, Prepaid Land Lease Payments by HKD 48,824,716 and Revenue by HKD 33,942,000, in the 2014 annual report of the Group.

40.2 The downward adjustments stated above would have a material impact on the relevant financial statements of the Group at the material time, and there would be a material impact on the Group’s principal activities in relation to at least the timber-related activities in the Mainland.

40.3 On the basis that the Group did not hold the Alleged Forestry Rights, there is a high degree of uncertainty in respect of the continuality/sustainability of the Group.

40.4 As a corollary of the above, the investing public has been misled by the rosy but illusory appearance of Superb Summit’s revenue and profitability which were false or misleading in material respects in the manner described, and were prevented from accurately assessing the risk of their investment or making an informed investment decision.

C. LOSSES SUFFERED BY THE GROUP AND FINANCIAL BENEFITS OBTAINED BY THIRED PARTIES

41. By reason of the matters stated above, the 13^th Respondent admits, accepts and agrees that the 2007 Acquisition was significantly overpriced, and the Company has accordingly suffered a huge loss.

42. As stated above, on the basis that Green & Wood did not own the Alleged Forestry Rights, the 13^th Respondent admits, accepts and agrees that the Company had paid HKD 1.678 billion / RMB 1.601 billion for non-existent assets during the course of the 2007 and 2009 Acquisitions.

D. SECTION 214 PETITION FOR DISQUALIFICATION ORDERS

43. The 13^th Respondent admits, accepts and agrees that Superb Summit’s business or affairs had been conducted in a manner:

43.1 Oppressive to its members or any part of its members under section 214(1)(a) of the SFO;

43.2 Involving defalcation, fraud, misfeasance or other misconduct on the part of the 13^th Respondent towards it or its members or any part of its members under section 214(1)(b) of the SFO;

43.3 Resulting in its members or any part of its members not having been given all the information in respect of its business or affairs that they might reasonably expect under section 214(l)(c) of the SFO; and

43.4 Unfairly prejudicial to its members or any part of its members under section 214(l)(d) of the SFO.

44. The 13^th Respondent admits, accepts and agrees that he is a person responsible for the business or affairs of the Company having been conducted in the manner described in the paragraph above.

45. The 13^th Respondent admits, agrees and accepts that in approving the 2007 Acquisition, he displayed incompetence, and a marked indifference to or disinterest in his responsibilities as a director towards the interests of the public shareholders of the Company, and accordingly acted in an incompetent manner and failed to act in the best interest of the Company and breached his duty of care towards the Company, such that he was responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 43 above.

46. The 13^th Respondent admits, agrees and accepts the following.

47. Firstly, a reasonably diligent director would have reviewed the Simao Agreements, those being the source of the Leeka Wood’s ownership of the Alleged Forestry Rights.

47.1 Had he done so, he would have noticed that although the appendix to the relevant Simao Agreement relating to the Mapu forests purported to exhibit the agreement of the villagers to transfer the forestry rights thereto to Simao, the said appendix titled “村民同意轉讓聯名簽字畫押簿” was actually a blank page.

47.2 In the absence of this document, he ought to immediately raise queries as to the basis on which Simao had the relevant forestry rights to transfer to Leeka Wood, and as to why the relevant forestry authorities would have nonetheless issued the relevant FOL.

48. Secondly, a reasonably diligent director, having read the legal opinion obtained from De Heng Law Offices (De Heng) on which Superb Summit places reliance (De Heng Legal Opinion), ought to have noticed the disclaimer on page 4 that De Heng would not verify the authenticity of any of the documents provided, and had provided the De Heng Legal Opinion on the basis of Green & Good’s guarantee that the documents, materials, confirmations were authentic, complete and effective. Upon noticing the disclaimer, he should have at least questioned whether it was necessary to verify the authenticity of the FOLs, those substantiating the Alleged Forestry Rights that became the subject matter of the 2007 Acquisition, especially in light of the peculiar feature stated in the paragraph above.

49. Thirdly, a reasonably diligent director ought to have questioned or applied his mind to the methodology of or the assumptions made by the professional parties in reaching the respective conclusions.

50. Fourthly, a reasonably diligent director ought to have inspected the FOLs being the primary documents to substantiate the existence of the Alleged Forestry Rights. Had he done so as part of his proper and reasonable due diligence, it would have revealed that the information stated in the relevant FOLs (that the deposits under the Simao Agreements have been paid already) was incorrect.

50.1 At the time of the completion of the 2007 Acquisition in October 2007, Leeka Wood only paid 0.7% of the said total consideration under the Simao Agreements to Simao in respect of the Alleged Forestry Rights. The remaining consideration for the transfers of Alleged Forestry Rights under the Simao Agreements was purportedly paid between December 2007 and November 2011.

50.2 By way of illustration, insofar as the Alleged Forestry Rights for the Alleged Forest in Jiangcheng are concerned, the relevant Simao Agreement provided at clause 5.1 that the deposit payable by Leeka Woods was in the amount of RMB 25.5 million (as 30% of the consideration thereunder). This amount far exceeded the RMB 1.5 Million paid as at the date of completion of the 2007 Acquisition.

50.3 The relevant FOLs were one-page documents (each containing four paragraphs only) and were simple to read and digest. Had he inspected the FOLs, upon reading the second paragraph stating that Leeka Wood had already paid the agreed deposit (“2、你公司己按照合同约定支付了首付款项”), a natural question for a reasonably diligent director to ask would be (given the importance of these FOLs) for proof of at least the said paragraph to confirm Leeka Wood’s payment of the deposit to Simao, if not proof of all four paragraphs.

51. The 13^th Respondent admits, agrees and accepts that he has not taken any or all of the steps described in paragraphs 47 to 50 above. In the premises, by reason of his gross incompetence and negligence, he was responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 43 above.

E. AGREED MITIGATING FACTORS

52. The 13^th Respondent has been cooperative in relation to these proceedings with the Petitioner and accepts liability.

53. The 13^th Respondent has adopted a reasonable course of action in agreeing to conclude these proceedings by way of the Carecraft Procedure which saves the time and costs of the Petitioner and the Court, and in agreeing to pay his share of the Petitioner’s costs incurred up to and including the hearing of the Carecraft Procedure.

PART III – AGREED PROPOSED ORDERS

54. On the basis of the agreed facts and the agreed mitigating factors set out in Part II above, the Petitioner and the 13^th Respondent agree and submit that it would be appropriate for an order to be made against the 13^th Respondent under section 214(2)(a) and 214(2)(d) of the SFO, that the 13^th Respondent shall not, for a period of three (3) years, without leave of the Court:

(1) be, or continue to be, a director, liquidator, or receiver or manager of the property or business, of the Company or any other corporation including any of the Company’s subsidiaries and affiliates; and

(2) in any way, directly or indirectly, be concerned, or take part, in the management of the Company or any other corporation including any of the Company’s subsidiaries and affiliates.

55. If, pursuant to this Statement, the Court disposes of these proceedings summarily, the 13^th Respondent agrees that there should additionally be an order that the 13^th Respondent do pay the costs of the Petitioner in these proceedings, or such portion thereof as the Court thinks appropriate, to be taxed if not agreed.

Dated this 29^th day of July 2025

[SIGNED] ______________________________			[SIGNED] ______________________________
Securities and Futures Commission The Petitioner Signed by Jasmine Chan, for and on behalf of the Petitioner			Qiu Jizhi (邱继志) 13th Respondent (第十三答辩人)

Appendix 1

Definitions

In this Statement:

“corporation” means a company or other body corporate incorporated either in Hong Kong or elsewhere;

“company” means a company as defined in section 2(1) of the Companies Ordinance (Cap. 622). The expression “company” in the definitions of subsidiary, holding company and affiliate below, shall be read as including a corporation;

“subsidiary” means, with respect to its holding company, a company:

v. the composition of the board of directors of which is directly or indirectly controlled by the holding company; or

vi. more than half of the issued share capital of which is directly or indirectly controlled by the holding company; or

vii. which is a subsidiary of a company which is a subsidiary of the holding company; or

viii. which is accounted for and consolidated in the holding company's consolidated financial statements;

“holding company” in relation to a company shall be read as a reference to a company of which that last-mentioned company is a subsidiary; and

“affiliate” in respect of a company, means any subsidiaries or holding companies of such company or any subsidiaries of any of the holding companies of such company.

Annex 3

STATEMENT OF AGREED FACTS FOR CARECRAFT PROCEDURE BETWEEN THE PETITIONER AND THE

14^th RESPONDENT

PART I — INTRODUCTION

1. On 18 December 2020, the Securities and Futures Commission (Petitioner) presented a petition pursuant to section 214(2) of the Securities and Futures Ordinance (Cap. 571) (SFO) seeking, among other things:

(1) An order under section 214(2)(a) and/or section 214(2)(d) of the SFO that each of the 2^nd to 16^th Respondents shall not, for such periods as the Court shall consider appropriate, without leave of the Court:

(a) be, or continue to be, a director, liquidator, or receiver or manager of the property or business, of Superb Summit International Group Limited (Superb Summit or Company) or any other corporation including any of the Company's subsidiaries and affiliates; and

(b) in any way, directly or indirectly, be concerned, or take part, in the management of the Company or any other corporation including any of the Company's subsidiaries and affiliates; and

(2) Costs.

2. On 26 April 2021, the petition was amended pursuant to the Order of Master Rita So dated 21 April 2021. The definitions of “corporation”, “subsidiary” and “affiliate” are set out in Appendix 1 to this Statement.

A. PURPOSE

3. Subject to the approval of the Court, the Petitioner and the 14^th Respondent have agreed to dispose of these proceedings against the 14^th Respondent by way of the summary procedure (Carecraft Procedure) sanctioned in Re Carecraft Construction Co. Ltd. [1994] 1 WLR 172, as clarified by the English Court of Appeal in Secretary of State for Trade and Industry v Rogers [1996] 1 WLR 1569 and as adopted by the Court in a number of cases in respect of proceedings under section 214 of the SFO.

4. The facts set out in this Statement are not disputed between the Petitioner and the 14^th Respondent on the basis that the case against him will be dealt with by the Court by way of the Carecraft Procedure. If the Court for any reason is of the view that these proceedings shall not be dealt with by the Carecraft Procedure or that a full hearing is appropriate, no admission or concession by either the Petitioner or the 14^th Respondent and none of the proposed orders referred to below or liability to pay costs shall be referred to or relied on by any of the parties at any subsequent hearing without the prior written consent of the Petitioner and the 14^th Respondent.

5. For the purpose of resolving these proceedings against him by way of the Carecraft Procedure, and by reference to the facts set out in Part II of this Statement (which he admits and accepts), the 14^th Respondent accepts that during the relevant period, the business and affairs of the Company have been conducted in a manner described in section 214(1)(a) to (d) of the SFO, namely:

(1) oppressive to its members or any part of its members;

(2) involving misconduct towards it or its members or any part of its members;

(3) resulting in its members or any part of its members not having been given all the information in respect of its business or affairs that they might reasonably expect; and

(4) unfairly prejudicial to its members or any part of its members.

B. UNOPPOSED ORDERS

6. On the basis of the facts set out in Part II of this Statement, the Petitioner and the 14^th Respondent agree, and the 14^th Respondent accepts, that it would be appropriate for the orders set out in Part III of this Statement below to be made against him.

7. If pursuant to this Statement, the Court disposes of these proceedings summarily, the 14^th Respondent agrees that there should additionally be an order that he pays the costs of the Petitioner in these proceedings, or such portion thereof as the Court thinks appropriate, to be taxed if not agreed with certificate for two counsel.

8. In the event that the Court makes any order sought against the 14^th Respondent by reference to this Statement, the Petitioner and the 14^th Respondent agree that they will jointly apply to the Court for a direction that this Statement be annexed to a judgment of the Court.

9. Furthermore, without prejudice to all of the Petitioner’s rights, the Petitioner specifically reserves the right to (a) disclose this Statement to third parties where it appears proper to do so in the public interest, including, but not limited to, making use of the Statement for the purpose of any press release issued in respect of these proceedings, and (b) refer to this Statement for purposes ancillary to, connected with and/or arising out of these proceedings.

PART II – STATEMENT OF AGREED FACTS

A. INTRODUCTION AND BACKGROUND

A1. The Company

1. Superb Summit was incorporated on 29 January 2001 in the Cayman Islands and was at all material times and is a non-Hong Kong company (no. F11367) registered under Part XI of the predecessor Companies Ordinance (Cap. 32), now Part 16 of the Companies Ordinance (Cap. 622) (CO).

2. Over the years, the Company has changed its name several times. It used the names of:

2.1 Tak Shun Technology Group Limited (德信科技集團有限公司) from its date of incorporation to 25 January 2008;

2.2 Superb Summit International Timber Company Limited (奇峰國際木業有限公司) from 25 January 2008 to 19 September 2012; and

2.3 Superb Summit International Group Limited (奇峰國際集團有限公司) from 19 September 2012 onwards.

3. The registered office of Superb Summit was at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111 Cayman Islands.

4. The share capital of Superb Summit is divided into 10,000,000,000 shares of nominal value of HKD 0.10 each.

5. The objects for which Superb Summit was established are set out in Article 3 of its Memorandum of Association and include (without limitation): general trading, importing, exporting, buying, selling and dealing in goods, materials, substances, articles and merchandise of all kinds in, from and to any part of the world, whether as principal or as agent.

6. Between 18 September 2001 and 3 June 2020, Superb Summit’s shares were listed on the Main Board of the Stock Exchange of Hong Kong Limited (SEHK).

7. Superb Summit was principally engaged in integrated timber business including (a) the development and management of timber resources in the Mainland of the People’s Republic of China (Mainland) and (b) the distribution, marketing and sales of a wide range of timber products.

8. On 4 June 2020, the SEHK cancelled the listing of Superb Summit’s shares pursuant to Rule 6.01A of the Main Board Listing Rules (LR).

A2. The 14^th Respondent

9. The 14^th Respondent, Chan Chi Yuen, was a former independent non-executive director (INED) of the Company from 11 April 2007 to 24 June 2010 and the Chairman of the Audit Committee.

10. At the material times, the 14^th Respondent owed to the Company, inter alia, fiduciary duties as a director of the Company and a duty of care at common law to:

10.1 act with or exercise due and reasonable care, skill and diligence that would be exercised by a reasonably diligent person with (i) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as carried out by a director in relation to the Company and (ii) the general knowledge, skill and experience that the director has;

10.2 continually acquire and maintain a sufficient knowledge and understanding of the business of the Company as well as its subsidiaries (Group) to enable him to properly discharge his duties as an officer of the Company; and

10.3 where a director has delegated some of the managerial or financial responsibilities to his subordinates or other fellow officers, a duty to supervise the discharge of the delegated functions.

11. At all material times, the 14^th Respondent was also obliged to ensure the Company's compliance with the legal and regulatory requirements (including the LR) that were applicable to the Company.

12. At all material times in respect of the Company’s acquisition of various forestry assets in 2007 (2007 Acquisition), the 14^th Respondent was an INED and Chairman of the Audit Committee of the Company.

13. At all material times in respect of the Company’s acquisition of various forestry assets in 2009 (2009 Acquisition), the 14^th Respondent was an INED and Chairman of the Audit Committee of the Company.

B. THE FORESTRY CASE

B1. Background and Chronology of the 2007 and 2009 Acquisitions

14. On 12 April 2007, the Company entered into a letter of intent with Superview International Limited (Superview) in relation to the 2007 Acquisition, with the consideration to be determined pending negotiation and due diligence on various aspects of the 2007 Acquisition. A profit guarantee (see paragraph 16.8 below) was also contemplated.

15. On 16 May 2007, the Company and Superview entered into a share transfer agreement (2007 STA) in respect of the 2007 Acquisition.

16. On 8 June 2007, Superb Summit issued an announcement (2007 Announcement) in relation to the 2007 STA and the 2007 Acquisition, which included the following details:

16.1 Pursuant to the 2007 STA, the Company as purchaser agreed to acquire from Superview as vendor 70 shares representing 70% of the issued share capital of Green and Good Group Limited (Green & Good) at a total consideration of HKD 1.38 billon (2007 Acquisition Consideration), with Yiu Yat On (Yiu), Ho Kam Hung (Ho) and Qian Mingjin (Qian) (being holders of 56%, 25% and 19% of the issued share capital of Superview respectively) as guarantors.

16.2 Prior to the 2007 STA, Superview was the sole shareholder of Green & Good.

16.3 Green & Good’s only asset was the entire equity interest in Leeka Wood Company Limited[50] (Leeka Wood) (綠之嘉木業有限公司) (collectively Green & Good Group).

16.4 Based on the information available to the Company in the course of the due diligence exercise in respect of Green & Good, Leeka Wood possessed about 329,898 Chinese mu of timber resources covering various regions in Yunnan, Hunan and Hebei, among which were forestry assets (Alleged Forests) in:

16.4.1 Jiangcheng, Yunnan (100,996 mu; the term of the land use rights was for 40 years);

16.4.2 Heishan, Yunnan (81,546 mu; the term of the land use rights was for 50 years); and

16.4.3 Mapu, Yunnan (46,358 mu; the term of the land use rights was for 40 years).

The Alleged Forests accounted for 69% of the total forest land purportedly held by Leeka Wood.

16.5 The status of forest ownership certificates (FOCs) (林權證) in respect of the Alleged Forests were set out in the English version of the 2007 Announcement as follows:

“Obtained forest ownership certificate from the local forestry government department where the forest land is located but the application for forest ownership certificate from the state forestry department is still in progress.”

In the Chinese version of the 2007 Announcement, it was set out as follows:

“已獲得林地所在地點之當地政府林業局發出之權屬証明書，

但仍在辦理向國家林業局申請林權証之手續”

16.6 The 2007 Acquisition Consideration was HKD 1.38 billion, to be satisfied in the following manner:

16.6.1 HKD 200 million in cash to be payable upon completion;

16.6.2 HKD 250,311,150 by the allotment and issue of 556,247,000 Consideration Shares, credited as fully paid, to Superview upon completion (i.e. equivalent to HKD 0.45 per consideration share); and

16.6.3 The remaining balance of HKD 929,688,850 by issue of the convertible notes with a conversion price at HKD 0.45 per conversion share to Superview upon completion (2007 Convertible Notes).

16.7 Part of the 2007 Convertible Notes with a two-year term in a principal amount of HKD 300 million (Restricted Convertible Notes) were not convertible until 31 March 2009 and after all liabilities in respect of the Profit Guarantee (defined below) had been discharged in full.

16.8 The Profit Guarantee referred to the joint and several undertaking by Superview as vendor and Yiu, Ho and Qian as guarantors that the audited consolidated net profit after tax of Green & Good Group (prepared in accordance and compliance with Hong Kong Generally Accepted Accounting Principles) for the two financial years ending 31 December 2007 and 2008 would not be less than HKD 300 million and that they would compensate the Company for any shortfall.

16.9 In the event that the conversion rights attaching to the Convertible Notes were fully exercised by Superview, the conversion shares thereunder (Conversion Shares) would amount to approximately 74.3% of the existing issued share capital of the Company and approximately 38.2% of the then issued share capital of the Company as enlarged by the issue of the Consideration Shares and Conversion Shares.

16.10 The 2007 Acquisition Consideration had been determined with reference to, among other things, (i) the business prospect, potential profitability, market scalability and product mix of Leeka Wood and its subsidiaries, (ii) the asset quality back-up by Green & Good Group; and (iii) the Profit Guarantee.

16.11 As at the date of the 2007 Announcement, HKD 100 million had been deposited by the Company as refundable interest-bearing deposit.

17. On 3 September 2007, the Company issued a circular (2007 Circular) providing reasons for and further details of the 2007 Acquisition, and giving notice of an extraordinary general meeting for the consideration and approval of, among other things, the 2007 Acquisition, the issue of Consideration Shares and Convertible Notes.

18. In the 2007 Circular, Lam Ping Kei (the then Chairman and on behalf of the board of the Company) confirmed that, in respect of the Alleged Forests, the forestry department of local government had not issued any FOC – the status of the FOCs in respect of the Alleged Forests was set out as follows:

“Obtained forest ownership letter (the temporary ownership document) from the forestry department of local government where the forest land is located but the application for forest ownership certificate from the forestry department of local government is still in progress”

19. A significant difference between the English versions of the 2007 Announcement and the 2007 Circular was that, in respect of the Alleged Forests:

19.1 The 2007 Announcement represented that FOCs had been issued by the local forestry government department (see paragraph 16.5 above); but

19.2 The 2007 Circular represented that only forest ownership letters (FOLs), but not FOCs, had been issued by the forestry department of local government (see paragraph 18 above),

In the Chinese versions, both documents indicated that only “權屬証明書” (FOLs) instead of “林權証” (FOCs) were issued by the local forestry government department in respect of the Alleged Forests (see paragraph 16.5 above).

20. The 2007 Circular revealed that the assets of Green & Good had been valued at approximately HKD 3.279 billion as at 30 June 2007 by LCH (Asia-Pacific) Surveyors Limited (LCH), and provided further details at Appendix V thereto (containing LCH’s valuation report on the assets proposed to be acquired by the Company (LCH’s 2007 Valuation Report)).

21. On 15 October 2007, the Company made an announcement (15.10.2007 Announcement) announcing the completion of 2007 Acquisition on 8 October 2007.

22. On 27 April 2009, Superb Summit issued an announcement (27.04.2009 Announcement) that:

22.1 The Profit Guarantee was not met and the shortfall amounted to approximately HKD 725,111,000 (Shortfall).

22.2 As at the date of the 27.04.2009 Announcement, Superview has settled approximately 55% of the Shortfall by way of set-off against the Restricted Convertible Notes (HKD 300 million) and set-off against other amounts due to Superview (HKD 100 million).

22.3 The remaining Shortfall amount of approximately HKD 325,111,000 (Outstanding Shortfall) would be compensated by way of cash or other methods as agreed by Superb Summit.

22.4 Superview and Superb Summit were in the process of negotiating a settlement arrangement in relation to the Outstanding Shortfall.

23. On 9 June 2009, Superb Summit and Superview entered into an extension agreement pursuant to which Superb Summit would extend the payment date of the Outstanding Shortfall from 9 June 2009 to 8 September 2009, with interest at 6.5% per annum payable on 8 September 2009 (Extension Agreement).

24. On 29 June 2009, Superb Summit entered into a Memorandum of Understanding with Superview in relation to the intention to enter into a series of transactions including the 2009 Acquisition.

25. On 10 July 2009, Superb Summit entered into a Conditional Share Transfer Agreement (2009 CSTA) in respect of:

25.1 The 2009 Acquisition;

25.2 The disposal of Leeka Wood’s 67.7% equity interest in 綠之嘉木制品制造有限公司 (G&G Wood), a substantially inactive company which has contributed to the loss of Green & Good, to Superview; and

25.3 The release of the respective counter guarantee obligations of Leeka Wood and G&G Wood to a third party guarantor 金聯通信用擔保有限公司 for the bank loan under the “Counter Guarantee Agreements” by Superview.

(collectively, the 2009 Transaction)

26. On 23 July 2009, Superb Summit issued an announcement (2009 Announcement) that it has entered into the 2009 CSTA in respect of the 2009 Transactions on 10 July 2009.

27. On 23 October 2009, Superb Summit issued a circular (2009 Circular) providing reasons for and further details of the 2009 Transactions, and giving notice for an extraordinary general meeting for the consideration and approval of, among other things, the 2009 Transactions. It stated, among other things, that:

27.1 The consideration for the 2009 Acquisition was HKD 751,990,000 (2009 Acquisition Consideration), equivalent to a discount of 16% to the net asset value of Green & Good attributed to 30% of the net consolidated asset value of Green & Good including Leeka Wood and G&G Wood.

27.2 Superb Summit would set off the Outstanding Shortfall of HKD 335,011,000 (i.e. principal amount of HKD 325,111,000 plus interest) owed by Superview to the Company against the 2009 Acquisition Consideration. The remaining balance of the 2009 Acquisition Consideration in the sum of HKD 416,979,000 would be settled by the issuance of convertible notes by Superb Summit to Superview on the completion date (2009 Acquisition Convertible Notes)[51].

28. On 27 November 2009, Superb Summit issued an announcement (27.11.2009 Announcement) that all conditions to the 2009 CSTA had been fulfilled, and the 2009 Transactions had been completed on 27 November 2009, such that the Outstanding Shortfall had been extinguished, G&G Wood ceased to be a subsidiary of Superb Summit, and Green & Good had become a wholly owned subsidiary of Superb Summit.

29. On 30 December 2010, Leeka Wood entered into a transfer agreement to transfer the relevant rights in the Alleged Forests (Alleged Forestry Rights) to 綠之嘉木業（普洱）有限公司 (Leeka Wood (Pu’er)), another wholly owned subsidiary of Superb Summit.

B2. False Ownership of Alleged Forests and Alleged Forestry Rights

30. According to the investigation conducted by the Petitioner, it was revealed that, for the purposes of both the 2007 Acquisition and 2009 Acquisition, Leeka Wood and in turn Green & Good did not own the Alleged Forests and the Alleged Forestry Rights.

31. According to the investigation conducted by the Petitioner:

31.1 The purported genesis of the Alleged Forestry Rights was the transfer from farmers and villagers in Yunnan to 思茅市翠雲區伊祿木材加工廠 (Simao) prior to December 2006.

31.2 Thereafter, on 13 December 2006 and 26 December 2006, Simao and Leeka Wood purportedly entered into three transfer agreements in respect of the Alleged Forestry Rights. On 10 July 2007, Simao further entered into three supplemental agreements with Leeka Wood in respect of the same. These are collectively referred to as the Simao Agreements.

31.3 The three responsible competent authorities administering the laws governing the Alleged Forestry Rights are as follows:

31.3.1 In respect of the Alleged Forests allegedly located in Jiangcheng – the Forestry Bureau of Jiangcheng Hani and Yi Autonomous County;

31.3.2 In respect of the Alleged Forests allegedly located in Heishan – the Forestry Bureau of Lancang Lahu Autonomous County; and

31.3.3 In respect of the Alleged Forests allegedly located in Mapu – the Forestry Bureau of Ning’er Hani and Yi Autonomous County.

(collectively, the Forestry Bureaux)

32. As it transpires from the investigation conducted by the Petitioner that, the Forestry Bureaux had no record of the Simao Agreements. The Simao Agreements had not gone through any approval or record documentation process with any of the Forestry Bureaux.

33. By way of a letter dated 16 June 2016, the China Securities Regulatory Commission confirmed to the Petitioner and observed that:

33.1 The Forestry Bureaux had not issued any FOLs to Leeka Wood or Leeka Wood (Pu’er) – “均未对绿之嘉木业有限公司及/或绿之嘉木业（普洱）有限公司进行过答复，也未曾出具林权证明。”

33.2 The Alleged Forests had never been registered with the Forestry Bureaux, and that Leeka Wood had never registered any other forests with the Forestry Bureaux – “贵会提供资料（附件3 ）涉及的3宗林地未在澜沧等三县登记，绿之嘉木业有限公司也未在澜沧等三县登记过其他林地。”

34. The Forestry Bureaux never issued the 15 FOLs which were relied on by Superb Summit to purportedly establish the existence of and the chain of ownership concerning the Alleged Forests, either during or after the 2007 and 2009 Acquisitions.

35. There was also an absence of the anti-counterfeiting code (防伪码) on the seals affixed on the FOLs purportedly issued in relation to the Alleged Forests and missing characters in the names shown on such FOLs / seals (such as the missing characters of “人民政府”).

36. The 14^th Respondent does not dispute the above matters as revealed by the Petitioner’s investigation.

B3. Materiality of the Alleged Forestry Rights

37. The 14^th Respondent admits, accepts and agrees that the Alleged Forests are significant in terms of land size. The Alleged Forestry Rights are also significant in terms of market price.

37.1 At all material times, the Alleged Forests accounted for about 69%[52] to 72%[53] of the total land size of all the forestry assets purportedly held by Leeka Wood.

37.2 The market value of the Alleged Forestry Rights was approximately RMB 2,513.01 million to RMB 2,620 million. They accounted for 76.64% to 82.54% of the purported total value of Green & Good, the issued share capital of which formed the subject matter of the 2007 and 2009 Acquisitions.

37.3 Assuming the share of value of the Alleged Forestry Rights in the market value of Green & Good was proportionate to that in the 2007 Acquisition Consideration (HKD 1.38 billion) and the 2009 Acquisition Consideration (HKD 751,990,000) respectively, the Company would have been effectively paying HKD 1,057,632,000/RMB 1,057,632,000[54] for a 70% interest in the Alleged Forests in the 2007 Acquisition, and HKD 620,692,546/RMB 543,038,098[55] for the remaining 30% interest in the Alleged Forests in the 2009 Acquisition.

37.4 In other words, on the basis that Green & Good did not own the Alleged Forestry Rights and the Company would have paid HKD 1.678 billion / RMB 1.601 billion for non-existent assets during the course of the 2007 and 2009 Acquisitions.

38. The 14^th Respondent admits, accepts and agrees that the Alleged Forestry Rights are a significant and material aspect of the 2007 and 2009 Acquisitions.

B4. Downward Adjustment in the Company’s Financial Reports

39. On the basis that the Company or the Group did not own the Alleged Forestry Rights, the 14^th Respondent admits, accepts and agrees that significant downward adjustments ought to be made to the respective balances of Biological Assets, Prepaid Land Lease Payments and Revenue as stated in the Company’s published annual reports and interim reports. According to the calculation of the Petitioner, there should be at least a reduction in Biological Assets by HKD 2,786,364,100, Prepaid Land Lease Payments by HKD 48,824,716 and Revenue by HKD 33,942,000, in the 2014 annual report of the Group.

40. The 14^th Respondent admits, accepts and agrees that:

40.1 The downward adjustments stated above would have a material impact on the relevant financial statements of the Group at the material time, and there would be a material impact on the Group’s principal activities in relation to at least the timber-related activities in the Mainland.

40.2 On the basis that the Group did not hold the Alleged Forestry Rights, there is a high degree of uncertainty in respect of the continuality/sustainability of the Group.

40.3 As a corollary of the above, the investing public has been misled due to its being provided with inaccurate information regarding Superb Summit’s revenue and profitability, and has been prevented from accurately assessing the risk of their investment or making an informed investment decision.

C. LOSSES SUFFERED BY THE GROUP AND FINANCIAL BENEFITS OBTAINED BY THIRD PARTIES

41. By reason of the matters stated above, the 14^th Respondent admits, accepts and agrees that on the basis that Green & Wood did not own the Alleged Forestry Rights, the 2007 Acquisition and the 2009 Acquisition were significantly overpriced, and the Company has accordingly suffered a huge loss.

42. As stated above, on the basis that Green & Wood did not own the Alleged Forestry Rights, the 14^th Respondent admits, accepts and agrees that the Company had paid HKD 1.678 billion / RMB 1.601 billion for non-existent assets during the course of the 2007 and 2009 Acquisitions.

D. SECTION 214 PETITION FOR DISQUALIFICATION ORDERS

43. The 14^th Respondent admits, accepts and agrees that Superb Summit’s business or affairs had been conducted in a manner:

43.1 oppressive to its members or any part of its members under section 214(1)(a) of the SFO;

43.2 involving misconduct on the part of the 14^th Respondent towards it or its members or any part of its members under section 214(1)(b) of the SFO;

43.3 resulting in its members or any part of its members not having been given all the information in respect of its business or affairs that they might reasonably expect under section 214(l)(c) of the SFO; and

43.4 unfairly prejudicial to its members or any part of its members under section 214(l)(d) of the SFO.

44. Whilst the 14^th Respondent was not involved in the day-to-day management of the Company, the 14^th Respondent admits, accepts and agrees that he was one of the members of the board which as a whole was responsible for the business or affairs of the Company and he should have made further effort to closely monitor the business and affairs of the Company to avoid the same having been conducted in the manner described in paragraph 43 above.

D1. Liability in respect of the 2007 Acquisition

45. The 14^th Respondent admits, agrees and accepts that in approving the 2007 Acquisition, he has acted in a negligent manner and dedicated inadequate attention to the affairs of the Company, and accordingly failed to take sufficient regard to the best interest of the Company and breached his duty of care towards the Company. Further, he was one of the members of the board which as a whole was responsible for the business or affairs of the Company and he should have made further effort to closely monitor the business and affairs of the Company to avoid the same having been conducted in the manner described in paragraph 43 above.

46. The 14^th Respondent does not dispute the following.

47. Firstly, the 14^th Respondent should have reviewed the Simao Agreements in detail, those being the source of the Leeka Wood’s ownership of the Alleged Forestry Rights.

47.1 Had the 14^th Respondent done so, he would have noticed that although the appendix to the relevant Simao Agreement relating to the Mapu forests purported to exhibit the agreement of the villagers to transfer the forestry rights thereto to Simao, the said appendix titled “村民同意轉讓聯名簽字畫押簿” was actually a blank page.

47.2 In the absence of this document, he ought to immediately raise queries as to the basis on which Simao had the relevant forestry rights to transfer to Leeka Wood, and as to why the relevant forestry authorities would have nonetheless issued the relevant FOL.

48. Secondly, the 14^th Respondent, having read the legal opinion obtained from De Heng Law Offices (De Heng) on which Superb Summit placed reliance (De Heng Legal Opinion), ought to have noticed the disclaimer on page 4 that De Heng would not verify the authenticity of any of the documents provided and had provided the De Heng Legal Opinion on the basis of Green & Good’s guarantee that the documents, materials, confirmations were authentic, complete and effective. Upon noticing the disclaimer, the 14^th Respondent should have at least questioned whether it was necessary to verify the authenticity of the FOLs, those substantiating the Alleged Forestry Rights that became the subject matter of the 2007 Acquisition, especially in light of the peculiar feature stated in the paragraph above.

49. Thirdly, the 14^th Respondent ought to have questioned or applied his mind to the methodology adopted or the assumptions made by the professional parties in reaching the respective conclusions.

50. Fourthly, the 14^th Respondent ought to have inspected the FOLs being the primary documents to substantiate the existence of the Alleged Forestry Rights. Had he done so as part of his proper and reasonable due diligence, he would have known that the information stated in the relevant FOLs (that the deposits under the Simao Agreements have been paid already) was incorrect.

50.1 At the time of the completion of the 2007 Acquisition in October 2007, Leeka Wood only paid 0.7% of the said total consideration under the Simao Agreements to Simao in respect of the Alleged Forestry Rights. The remaining consideration for the transfers of Alleged Forestry Rights under the Simao Agreements was purportedly paid between December 2007 and November 2011.

50.2 By way of illustration, insofar as the Alleged Forestry Rights for the Alleged Forest in Jiangcheng are concerned, the relevant Simao Agreement provided at clause 5.1 that the deposit payable by Leeka Woods was in the amount of RMB 25.5 million (as 30% of the consideration thereunder). This amount far exceeded the RMB 1.5 million paid as at the date of completion of the 2007 Acquisition.

50.3 The relevant FOLs were one-page documents (each containing four paragraphs only) and were simple to read and digest. Had the 14^th Respondent inspected the FOLs, upon reading the second paragraph stating that Leeka Wood had already paid the agreed deposit (“2、你公司己按照合同约定支付了首付款项”), a reasonably diligent director would naturally have asked for proof in support of at least the said paragraph to confirm Leeka Wood’s payment of the deposit to Simao, if not proof of all four paragraphs, given the importance of the FOLs.

51. The 14^th Respondent admits, agrees and accepts that he has not taken any or all of the steps described in paragraphs 47 to 50 above. In the premises, by reason of his negligence and inadequate attention to the details in conducting the above process, he was one of the members of the board which as a whole was responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 43 above.

D2. Liability in respect of the 2009 Acquisition

D2(a) Liability in respect of Due Diligence

52. The 14^th Respondent admits, agrees and accepts that in approving the 2009 Acquisition, he failed to pay adequate regard to the pertinent question of ownership of the Alleged Forests.

53. Further, the 14^th Respondent admits, agrees and accepts that he failed to pay sufficient regard to the best interest of the Company and breached his duty of care towards Company.

54. The 14^th Respondent admits, agrees and accept that:

54.1 He had been previously involved in the 2007 Acquisition.

54.2 He knew that the FOLs in respect of the Alleged Forests were temporary measures as at the 2007 Acquisition pending the issuance of FOCs.

54.3 He ought to have known that the FOCs in relation to the Alleged Forests remained outstanding and should have asked further questions. Nonetheless, he was content with the queries he had made and approved the 2009 Acquisition without raising sufficient queries.

54.4 In the premises, he failed to pay adequate regard to the issue of ownership of the Alleged Forests.

55. By reason of the aforesaid, the 14^th Respondent admits, agrees and accepts that he was one of the members of the board which as a whole was responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 43 above.

D2(b) Liability in respect of Publication of the 2009 Announcement

56. The 14^th Respondent attended the board meeting on 10 July 2009 at 4:30pm in which the issuance of the 2009 Announcement was approved.

57. By reason of the matters stated above, the 2009 Announcement was false or misleading as to a material fact:

57.1 Information disclosed in relation to the status of FOLs, size of forest lands, harvest details and the market value of the assets of Green & Good were false or misleading due to the non-existence of the Alleged Forestry Rights.

57.2 Such information was material as the forestry assets were the most material assets in the balance sheet of Green & Good and Leeka Wood. Reference is made to section B3 above.

58. The 14^th Respondent does not dispute the above conclusion. In the premises, the 14^th Respondent admits, agrees and accepts that he has failed to give sufficient regard to the above issues in approving the 2009 Announcement.

D2(c) Conclusion on the 14^th Respondent

59. In the premises, the 14^th Respondent admits, agrees and accepts that he was one of the members of the board which as a whole was responsible for the business or affairs of the Company having been conducted in the manner described in paragraph 43 above.

E. AGREED MITIGATING FACTORS

60. The 14^th Respondent has been cooperative in relation to these proceedings with the Petitioner and accepts liability.

61. During his office as INED of the Company, the 14^th Respondent was not involved in the day-to-day management of the Company and the Group.

62. The 14^th Respondent has adopted a reasonable course of action in agreeing to conclude these proceedings by way of the Carecraft Procedure which saves the time and costs of the Petitioner and the Court, and in agreeing to pay his share of the Petitioner’s costs incurred up to and including the hearing of the Carecraft Procedure.

PART III – AGREED PROPOSED ORDERS

63. On the basis of the agreed facts and the agreed mitigating factors set out in Part II above, the Petitioner and the 14^th Respondent agree and submit that it would be appropriate for an order to be made against the 14^th Respondent under section 214(2)(a) and 214(2)(d) of the SFO, that the 14^th Respondent shall not, for a period of four (4) years, without leave of the Court:

(1) be, or continue to be, a director, liquidator, or receiver or manager of the property or business, of the Company or any other corporation including any of the Company’s subsidiaries and affiliates; and

(2) in any way, directly or indirectly, be concerned, or take part, in the management of the Company or any other corporation including any of the Company’s subsidiaries and affiliates.

64. If, pursuant to this Statement, the Court disposes of these proceedings summarily, the 14^th Respondent agrees that there should additionally be an order that the 14^th Respondent does pay the costs of the Petitioner in these proceedings, or such portion thereof as the Court thinks appropriate, to be taxed if not agreed.

Dated this 18^th day of June 2025

Appendix 1

Definitions

In this Statement:

“corporation” means a company or other body corporate incorporated either in Hong Kong or elsewhere;

“company” means a company as defined in section 2(1) of the Companies Ordinance (Cap. 622). The expression “company” in the definitions of subsidiary, holding company and affiliate below, shall be read as including a corporation;

“subsidiary” means, with respect to its holding company, a company:

ix. the composition of the board of directors of which is directly or indirectly controlled by the holding company; or

x. more than half of the issued share capital of which is directly or indirectly controlled by the holding company; or

xi. which is a subsidiary of a company which is a subsidiary of the holding company; or

xii. which is accounted for and consolidated in the holding company's consolidated financial statements;

“holding company” in relation to a company shall be read as a reference to a company of which that last-mentioned company is a subsidiary; and

“affiliate” in respect of a company, means any subsidiaries or holding companies of such company or any subsidiaries of any of the holding companies of such company.