Read the full judgment text of HCMP 2524/2006 on BabelCite. This High Court CFI judgment was delivered on 30 January 2009 before Kwan J.
Securities and futures regulation – disqualification of directors – section 214 of the Securities and Futures Ordinance, Cap. 571 – Carecraft procedure – Statement of Agreed Facts – gross incompetence – GP NanoTechnology Group Limited (formerly Guang Ping NanoTechnology Group Limited) listed on the Growth Enterprise Market of the SEHK in July 2001 – five questionable transactions in 2001: the Heilongjiang Investment (RMB¥7 million deposit), the Enping Investment (RMB¥8 million guarantee money), the Honvest Loan (RMB¥3.43 million), the Enping Chemical Loan (RMB¥6.61 million), and the Global Essence Advances (HK$9.43 million) – shadow director Cheung Long Chung controlling Company's affairs – the 5th respondent (Chow Chun Kwong) was executive director, finance director, and compliance officer of the Company and chairman of its audit committee – the 5th respondent failed to discharge his duties, signed Board minutes without verification, allowed Cheung to control finances, and failed to ensure accuracy of public announcements – whether the Company's affairs were conducted in a manner involving misfeasance or other misconduct, resulting in members not having been given information they might reasonably expect, and unfairly prejudicial to its members under section 214(1)(b), (c) and (d) of the SFO – whether appropriate period and scope of disqualification order – court satisfied on the agreed facts that the 5th respondent was partly responsible for the conduct of the Company's affairs warranting a disqualification order – court followed framework in its prior judgment for the 2nd respondent – middle bracket of six to ten years applied – six-year disqualification period imposed with scope restricted to listed corporations and their subsidiaries/affiliates – to take effect 21 days after the order – mitigating factors of co-operation, admissions, agreement to give evidence and to pay one-fifth of SFC's costs accepted – submission that 5th respondent was assured of a limited role rejected as mitigation, following Re Westmid Packing Services Limited – 5th respondent to pay costs of SFC for the 27 November 2008 adjournment and one-fifth of SFC's costs up to the date of the order.
Legal issues: Whether business and affairs of the Company were conducted in a manner warranting a disqualification order under s.214 SFO · Appropriate period and scope of disqualification
Outcome: Disqualification order made against the 5th respondent for six years, restricted in scope to corporations listed on the SEHK and their subsidiaries/affiliates. The 5th respondent is liable for costs as agreed.
Cited by 3 cases · Cites 1 case