To Shu Fai v. Securities & Futures Commission

FACC No. 3 of 2008

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 3 OF 2008 (Criminal)

(ON APPEAL FROM HCMA No. 547 of 2007)

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Between:

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Court:  Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Sir Noel Power NPJ and Lord Woolf NPJ

Date of Hearing:  2 March 2009

Date of Judgment:  26 March 2009

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J U D G M E N T

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Mr Justice Bokhary PJ:

1.I agree with the joint judgment of Mr Justice Chan PJ and Mr Justice Ribeiro PJ.

Mr Justice Chan PJ and Mr Justice Ribeiro PJ:

Introduction

2.The appellant (“Mr To”) was convicted by a magistrate (Mr Douglas T H Yau) of an offence under ss.384(1) and 390 of the Securities and Futures Ordinance, Cap 571 (“the Ordinance” or “the SFO”). The magistrate held that Daido Group Limited (“Daido”), one of the defendants in the courts below and a publicly listed company of which Mr To was at the material times the chairman and one of its directors, had committed an offence under s.384(1), in that it had provided to the Securities and Futures Commission (“SFC”) information in the form of a public announcement which was false or misleading in a material particular, knowing or being reckless as to whether the information was false or misleading and that by virtue of s.390, Mr To was guilty of the same offence. The magistrate also indicated that alternatively, even if the substantive offence under s.384(1) was not completed, Daido would be guilty of attempt and Mr To would equally be criminally liable by virtue of s.390.

3.Mr To and Daido appealed against these convictions to the Court of First Instance but their appeals were dismissed by Beeson J who affirmed the magistrate’s decision on both the substantive offences as well as the attempted offences. With leave of the Appeal Committee, Mr To now appeals to this Court on the point of law of great and general importance ground, Daido having abandoned its application for leave to appeal. It is however common ground that notwithstanding the absence of Daido in this appeal, it is still necessary to consider the conviction against Daido in order to dispose of Mr To’s appeal - if Daido is not guilty of the substantive offence or the attempt, Mr To’s conviction cannot stand.

The issues in this appeal

4.The three questions of law certified by the Appeal Committee give rise to three issues for determination in this appeal. The first is whether the prosecution has failed to prove the actus reus of the s.384(1) offence, namely, that Daido had supplied the relevant information to SFC. This involves a construction of s.384(1) in the light of s.7 of the Securities and Futures (Stock Market Listing) Rules (“the Listing Rules”). We shall call this the “Construction issue”.

5.The second and third issues arise from the magistrate’s indication on the alternative conviction on the basis of an attempt to commit the s.384(1) offence. The second issue is whether as a matter of law and on the facts, Daido could be found guilty of such an attempt. We shall call this the “Attempt issue”. On the basis that the answer to the second issue is in the affirmative, the third issue is whether the attempted offence is “an offence under the Ordinance” as required by s.390 so as to fix criminal liability on Mr To under that section. We shall call this the “Section 390 issue”.

6.Mr Denis Chang SC, leading Mr Jeremy Chan for Mr To, concedes that if he fails on the Construction issue, that would be the end of this appeal which would have to be dismissed; but if his submission on the Construction issue is accepted, and if the Court further holds in his favour on the Attempt issue, then both Daido and Mr To would not be guilty of any offence and this appeal would have to be allowed. On the other hand, if the Court is not with him on the Attempt issue, it would become necessary to decide the Section 390 issue and he could only succeed if the Court accepts his submission on that issue.

The facts as accepted and found by the magistrate

The background

7.In November 2000, before Daido was listed on the Stock Exchange of Hong Kong (“SEHK”) and as a condition of such listing, it entered into a Listing Agreement with SEHK under which it had assumed certain obligations both under the Listing Agreement and the Listing Rules, including the on-going obligation to disclose various categories of information about the trading of its shares in the stock market.

8.In 2003, Mr To acquired a controlling interest in Daido through his wholly owned company, Vision Harvest Limited which held 50% in Top Synergy Associates Limited which in turn owned a majority shareholding in Daido (i.e. 2.2 billion shares). The acquisition was financed by means of loans advanced by TKR Finance Limited (“TKR Finance”) and secured by a charge over the relevant shares.

9.In order to reduce this indebtedness, in July or August 2003, Mr To discussed with PW1 (a director of TKR Finance) the sale of 200 million shares in Daido held indirectly by him. He supplied PW1 with the names and information of some of his friends who might be interested to buy those shares to enable PW1 to follow up the matter. PW1 and his staff proceeded with the proposal and made arrangements for three interested persons to buy these shares.  This included opening accounts for them with TKR Securities Limited (“TKR Securities”) on 28 August 2003. During a discussion in early October 2003, PW1 pressed Mr To for repayment of part of the loans and the sale of these shares, urging him to settle the sale quickly and suggesting that it was best to do so in October.

The sale of 200 million shares

10.As it turned out, 200 million shares in Daido were sold on 16 October 2003. But neither PW1 nor any one in TKR Finance or TKR Securities told Mr To or his company beforehand that the sale was going to be concluded on that day. The proceeds of sale were, with the approval and at the instruction of Mr To, paid to TKR Finance on the following day. The price at which the 200 million shares were sold was 65 cents per share; it had gone up to 67 cents on 16 October 2003 and 82 cents by the end of October 2003.

The SEHK enquiry

11.The sale of 200 million shares in Daido on 16 October 2003 as compared to the daily average of about 350,000 shares over the previous 10 days attracted the attention of Ms Eliza Wong of SEHK. She immediately made enquiry of Daido’s company secretary, PW4. Upon receiving this enquiry, PW4 phoned all directors of Daido, including Mr To, telling them about this official enquiry from SEHK. He asked if they knew about the sudden increase in the volume of share trading; whether they had traded in Daido shares; and whether they were discussing something that needed to be disclosed according to the Listing Rules. He did not tell Mr To the exact amount of increase in turnover. In response, all directors told PW4 that they did not trade in Daido shares. None of them mentioned there was anything being discussed which needed to be disclosed.

12.As for Mr To, he informed PW4 that he did not know of any reason why the turnover had suddenly gone up; that he did not trade in Daido shares; and that he did not know of any transaction that ought to be reported.He did not suggest to PW4 that he should check with TKR Securities and TKR Finance to see if they had gone ahead with the sale of Daido shares to his friends as previously discussed with them. 

The public announcement

13.PW4 took the word of the directors and duly informed Ms Eliza Wong who thereupon requested Daido to issue a public announcement to that effect. A public announcement was indeed issued on 16 October 2003 and delivered to SEHK. It was also published on the website of HK Exchanges and Clearing Limited. The relevant parts of the announcement were as follows:

“The board of directors (the “Board”) of Daido Group Limited (the “Company”) has noted the increase in the trading volume of the shares of the Company today and wishes to state that it is not aware of any reasons for such increase.

The Board of the Company also confirms that there are no negotiations or agreement relating to intended acquisitions or realisations which are discloseable under paragraph 3 of the Listing Agreement, neither is the Board of the Company aware of any matter discloseable under the general obligation imposed by paragraph 2 of the Listing Agreement, which is or may be of a price-sensitive nature.”

14.In the light of what had happened between July and October 2003, this announcement was clearly false and misleading, as was found by the magistrate.

Daido’s recklessness

15.As the magistrate also found, Daido’s knowledge came from Mr To, its chairman and director and its state of mind was that of Mr To. In July or August 2003, Mr To had already started negotiations with PW1 for the sale of a substantial quantity of shares. He was the one who gave the names of prospective purchasers to PW1. In early October 2003, less than two weeks before the sale of these, Mr To was pressed by PW1 for repayment of the loans due to TKR Finance and for a quick sale of some of his shares. He was told by PW1 that the sale should be completed in October, that is, within that month. Although he did not know and was not told when the sale would be concluded, he was then anticipating a sale. As the magistrate remarked, anyone in Mr To’s position and with his knowledge would have suspected that the sudden and sharp increase in the trading of Daido shares referred to by PW4 could have something to do with the imminent anticipated sale of Daido shares to his friends. It was thus difficult to accept that it did not even occur to him to raise this with PW4 when he was told of the official enquiry. After all, as stated at the end of the announcement, the directors accepted individual and joint responsibility for the accuracy of the statement contained in the announcement. Yet he chose not to tell PW4 about that possibility. All he had to do was to point PW4 in the direction of TKR Finance.

16.The irresistible inference, correctly drawn by the magistrate and upheld by the judge, is that Mr To and hence Daido were at least reckless as to whether the information contained in the public announcement was false or misleading.

The Construction issue

17.The provision under which Daido was convicted was s.384(1) which provides as follows:

“(1) Subject to subsection (2), a person commits an offence if –

(a) he, in purported compliance with a requirement to provide information imposed by or under any of the relevant provisions, provides to a specified recipient any information which is false or misleading in a material particular; and

(b) he knows that, or is reckless as to whether, the information is false or misleading in a material particular.”

[Subsection (2) is not relevant for the purpose of this appeal.]

18.As set out in the foregoing brief account of the facts, there can be no doubt that the information contained in the announcement was false and misleading and that Daido was at least reckless as to whether it was false or misleading. The only dispute is as to whether Daido had “provided” the information to the specified recipient as required by the section.

19.It is common ground that in the present case, the requirement to provide information is a reference to Daido’s obligation under s.7(1) of the Listing Rules. Section 7 is also relevant in two other respects. First, s.7(1) helps to identify the specified recipient of the information. Second, s.7(3) has a bearing on the question as to what constitutes “providing” information to the specified recipient under s.384(1). The relevant parts of s.7 of the Listing Rules state as follows:

“(1) An issuer shall file with the Commission a copy of any announcement, statement, circular, or other document made or issued by it or on its behalf to the public or to a group of persons comprising members of the public (including its shareholders) –

(a) under the rules and requirements of a recognized exchange company or any provision of law applicable; or

(b) pursuant to the terms of any listing agreement between the issuer and a recognized exchange company under the rules of the recognized exchange company,

within one business day following the day on which such announcement, statement, circular or other document is made or issued.

(2)  …

(3)  An issuer or a person is regarded as having complied with subsection (1) or (2) if the issuer or the person has –

(a) filed with the recognized exchange company concerned; and

(b) authorized the recognized exchange company in writing to file with the Commission on behalf of the issuer or the person, as the case may be,

a copy of the relevant announcement, statement, circular or other document.”

20.Although s.384(8) names four possible candidates as the specified recipient (which include SEHK and SFC), s.7(1) of the Listing Rules makes it clear, and it is also common ground, that in the present case, the specified recipient was SFC: Daido’s obligation was to file a copy of the relevant document with SFC.

21.It is not disputed that pursuant to s.7(3) of the Listing Rules, Daido had previously authorized SEHK in a letter dated 6 March 2003 to file with SFC on behalf of Daido all relevant documents required to be filed under s.7(1) and (2) of the Listing Rules and that Daido had filed a copy of the announcement in question with SEHK. It is however admitted by the prosecution that SEHK had not forwarded a copy of the announcement to SFC.

22.But Mr Adrian Bell, leading Mr Derek Chan for SFC, argues that it is not necessary to show that a copy of the announcement had actually been filed with SFC; s.7(3) has the effect of treating the filing of this document with SEHK as filing with SFC; and that is sufficient for the purpose of s.384(1). Referring to the Consultation Paper on the relevant statutory rules and the Memorandum of Understanding between SEHK and SFC, counsel submits that s.7(3) of the Listing Rules was enacted with the intention of reducing the administrative burden on listed companies as a result of the additional requirements of filing discloseable materials with SFC. That provision, it is submitted, applies for all purposes. Mr Bell also relies on the fact that the announcement was placed on the website and released to the public. He argues that so long as it is shown that the information in question was made available to SFC, the criminal act under s.384(1) is proved.

23.On the other hand, Mr Chang submits that s.384(1) requires proof of actual receipt by SFC which was absent in the present case. The means of complying with the statutory requirement as permitted by s.7(3) of the Listing Rules is, it is argued, optional in that there is nothing to prevent Daido from filing separately a copy of the announcement with SFC. Section 7(3) of the Listing Rules was enacted for the protection of listed companies like Daido so that by adopting this particular mode of filing, Daido is deemed to have complied with the s.7(1) requirement, which means that even if the relevant document does not reach SFC for whatever reason, Daido cannot be held liable for failing to comply with the statutory obligation. Section 7(3) is thus meant to be exculpatory in favour of Daido and cannot be construed so as to dispense with proof of an essential ingredient of an offence against Daido in connection with a criminal prosecution. It is further argued that according to s.7(3), SEHK is regarded as the agent of Daido for filing the relevant document and not the agent of SFC for receiving it. Daido has no control over SEHK after it had filed the document with it.    

24.The act which constitutes the actus reus of the s.384(1) offence, when read in conjunction with s.7(1) of the Listing Rules, is providing a copy of the announcement to SFC. No definition of the word “provide” appears in the Ordinance or the Listing Rules. However, there is nothing to suggest that it should not be construed in any way otherwise than in accordance with its ordinary and natural meaning which is to “supply, furnish for use or make available” (see the Shorter Oxford Dictionary). Section 384(1) is framed in such a way as to cover a variety of situations involving different types of document required under different rules to be provided to different specified recipients. What constitutes “providing” for the purpose of s.384(1) must be decided on the facts of each case, adopting the ordinary and natural meaning of the word and applying a pragmatic and common sense approach to the facts.

25.In the present case, the document involved was the public announcement a copy of which was required to be filed with SFC under s.7(1) of the Listing Rules. In respect of documents covered by s.7(1) (and also s.7(2)), for good and practical reasons, the legislature has, by enacting s.7(3), ­laid down a method of complying with this filing obligation. It is a method which has been agreed upon and accepted by SFC, SEHK and all listed companies. It has become an established practice with statutory backing. There is thus no good reason for not accepting that the filing of a copy of the announcement in question with SEHK in pursuance of this statutory mechanism constitutes “providing” a copy with SFC within the meaning of s.384(1). It would in fact be contrary to the intention of the legislation and the common expectation of all the parties involved not to do so.

26.We take the view that in the circumstances of this case, it has been shown that Daido had provided the false and misleading information to SFC, and that the substantive offence had been completed. It follows that Mr To is properly convicted under s.390. Mr Chang’s submission on this primary issue therefore fails and the appeal must be dismissed. However, it may be helpful for future cases if we also deal with the alternative issues relating to attempts.

The Attempt issue

27.This discussion proceeds on the basis that the substantive offence under s.384(1) has not been proved against Daido.  Mr Chang argues that there cannot be any liability for an attempt to commit a s.384(1) offence. His argument can be summarized as follows. The common law offence of attempt was abolished by s.159K of the Crimes Ordinance, Cap 200. A person can only be found guilty of an attempt now by virtue of s.159G. Sub-section (1) provides as follows:

“(1)   A person who, intending to commit an offence to which this section applies, does an act that is more than merely preparatory to the commission of the offence is guilty of attempting to commit the offence.”

28.Mr Chang makes two points in respect of s.159G. First, a person who is found guilty of an attempt has committed an offence under s.159G, not under the provision creating the substantive offence. This is relevant to the Section 390 issue and will be dealt with in the later part of this judgment.

29.Secondly, he submits that the words “intending to commit an offence” in s.159G mean that full intention and not merely recklessness must be shown on the part of the accused in respect of every element of the attempted offence.  Thus, while the substantive offence under s.384(1) can be committed by a person who either has knowledge of or is reckless as to the falsity or misleading nature of the information provided to SFC, he argues that recklessness is insufficient in the case of an attempt to commit that offence.  Since the magistrate only found Daido to be reckless, it is contended that no legal basis exists for convicting Daido of attempt.

30.Section 384(1) has been set out above.  Its ingredients as a substantive offence involve (i) the conduct of providing the information; (ii) the circumstance of falsity; and (iii) certain mental elements relating to the conduct and that circumstance.

31.As to the required conduct, the accused must provide information to a specified recipient (here, the SFC); and he must do so in purported compliance with a requirement to provide such information (here, as required by s.7 of the Listing Rules).  As to his mental state, he must obviously know of the requirement in question since his providing of the information has to be “in purported compliance” with that requirement.  Secondly, he must intend to provide the information in question to the specified recipient.  We do not think it can realistically be suggested that any mental state other than intentional regarding provision of the information would do. 

32.As to the circumstance that such information must be false or misleading in a material particular, the mental element needed is expressly stated by s.384(1)(b) to comprise either knowledge or recklessness:  the accused must be shown to know that, or be reckless as to whether, the information is false or misleading in a material particular.

33.Section 384(1) therefore requires separate and differing mental requirements in relation to the prohibited conduct and the accompanying circumstance respectively.  In our view, when it comes to an attempt to commit an offence which is so structured, proof of an intention to carry out the conduct in question (here, an intention to provide the information in purported compliance with the relevant requirement) is necessary but, as with the full offence, proof of either knowledge or recklessness as to the circumstance of falsity usually suffices. 

34.In taking this view, we adopt the reasoning of the English Court of Appeal in R v Khan (1990) 91 Cr App R 29; and Attorney-General’s Reference (No 3 of 1992) (1994) 98 Cr App R 383.

35.R v Khan was a case where the ingredients of the offence of attempted rape had to be addressed.  Under s.1(1) of the Sexual Offences (Amendment) Act 1976, the substantive offence is committed by a man having unlawful sexual intercourse with a woman “who at the time of the intercourse does not consent to it” where “at that time he knows that she does not consent to the intercourse or he is reckless as to whether she consents to it.”  It was therefore a case where the full offence involves the prohibited act of unlawful sexual intercourse with the circumstance that the victim does not consent.  

36.As in the present case, it was there argued that by virtue of the words “with intent to commit an offence” in the definition of an attempt as a statutory offence under s.1(1) of the Criminal Attempts Act 1981, the offence of attempted rape required a graver mental state to be proved than for the substantive offence.  Not only did the accused have to intend the attempted act of sexual intercourse, he also had to know that (and not merely be reckless as to whether) there was an absence of consent.  Russell LJ (giving the judgment of the Court) rejected that argument, stating:

“The only difference between the two offences is that in rape sexual intercourse takes place whereas in attempted rape it does not, although there has to be some act which is more than preparatory to sexual intercourse.  Considered in that way, the intent of the defendant is precisely the same in rape and in attempted rape and the mens rea is identical, namely, an intention to have intercourse plus a knowledge of or recklessness as to the woman’s absence of consent.  No question of attempting to achieve a reckless state of mind arises; the attempt relates to the physical activity; the mental state of the defendant is the same.  A man does not recklessly have sexual intercourse, nor does he recklessly attempt it.  Recklessness in rape and attempted rape arises not in relation to the physical act of the accused but only in his state of mind when engaged in the activity of having or attempting to have sexual intercourse.

If this is the true analysis, as we believe it is, the attempt does not require any different intention on the part of the accused from that for the full offence of rape.  We believe this to be a desirable result which in the instant case did not require the jury to be burdened with different directions as to the accused’s state of mind, dependent upon whether the individual achieved or failed to achieve sexual intercourse.

We recognise, of course, that our reasoning cannot apply to all offences and all attempts.  Where, for example, as in causing death by reckless driving or reckless arson, no state of mind other than recklessness is involved in the offence, there can be no attempt to commit it.” (at pp 34-35)

37.Attorney-General’s Reference (No 3 of 1992) involved the offence of attempted aggravated arson and the question for the court was whether “in addition to establishing a specific intent to cause damage by fire, it is sufficient to prove that the defendant was reckless as to whether life would thereby be endangered”.  Schiemann J (giving judgment for the Court),noted that the full offence in this case consisted of “... doing certain acts in a certain state of mind in circumstances where ... the danger to life arose from the damage to the property which the defendant intended to damage.”  He followed R v Khan, and stated:

“The substantive crime is committed if the defendant damaged the property in a state of mind where he was reckless as to whether the life of another would thereby be endangered.  We see no reason why there should not be a conviction for attempt if the prosecution can show that he, in that state of mind, intended to damage the property by throwing a bomb at it.”

38.His Lordship stressed that in proving an attempt, the prosecution had to show “that the defendant intended to achieve that which was missing from the full offence” such being the intention required by the statutory definition of an attempt.  Other than that, the prosecution had to prove the remaining state of mind required for the full offence.  It was sufficient to show that the accused was reckless as to whether the life of another would be endangered by his intended act.

39.In our view, the same considerations apply to proving an attempt to commit an offence under s.384(1).  Accordingly, Daido would have been guilty of an attempt if not found liable for the full offence.

The Section 390 issue

40.Section 390(1) provides:

“Where the commission of an offence under this Ordinance by a corporation is proved to have been aided, abetted, counselled, procured or induced by, or committed with the consent or connivance of, or attributable to any recklessness on the part of, any officer of the corporation, or any person who was purporting to act in any such capacity, that person, as well as the corporation, is guilty of the offence and is liable to be proceeded against and punished accordingly.”

41.If (as has been found) Daido has committed the substantive s.384 offence, Mr To becomes liable under s.390.  Daido would have committed “an offence under this Ordinance [the SFO]” which is “attributable to recklessness” on his part.  Section 390 provides that in such cases, he “as well as the corporation, is guilty of the offence and is liable to be proceeded against and punished accordingly”. In other words, s.390 creates a form of statutory accessory or concurrent liability in the officer dependent on the liability of the corporation for an SFO offence.

42.But where Daido is convicted of an attempt which is an offence under s.159G of the Crimes Ordinance and not under the SFO, s.390 does not, without more, create liability on the part of the officer whose recklessness is attributed to the company. The statutory accessory or concurrent liability arises on the face of s.390 only if the company has committed an offence under the SFO.

43.But that is not the end of the matter.  When enacting s.159G to create the statutory offence of attempt, the legislature went on in s.159H(1) to make provision for modifying certain categories of statutory provision (listed in s.159H(2)) to make such provisions operate in alignment with s.159G.  Section 159H states:

“(1)  Any provision to which this section applies shall have effect with respect to an offence under section 159G of attempting to commit an offence as it has effect with respect to the offence attempted.

(2)  This section applies to provisions of any of the following descriptions made by or under any enactment (whenever passed)-

(a)  provisions whereby proceedings may not be instituted or carried on otherwise than by, or on behalf or with the consent of, any person (including any provision which also makes other exceptions to the prohibition);

(b)  provisions conferring power to institute proceedings;

(c)  provisions as to the venue of proceedings;

(d)  provisions whereby proceedings may not be instituted after the expiration of a time limit;

(e)  provisions conferring a power to arrest or search;

(f)  provisions conferring a power to seize and detain property;

(g)  provisions conferring a power to impose pecuniary penalties;

(h)  provisions conferring a power to forfeit, including any power to deal with anything liable to be forfeited;

(i)  provisions conferring any powers and giving any discretions to cancel, suspend or refuse to issue any licence, permit or other authorization;

(j)  provisions imposing a duty;

(k)  provisions whereby a person may not be convicted or committed for trial on the uncorroborated evidence of one witness (including any provision requiring the evidence of not less than 2 credible witnesses);

(l)  provisions whereby, if an offence committed by a body corporate is proved to have been committed with the consent or connivance of another person, that person also is guilty of the offence.”

44.In the present context, we are of the view that the combined effect of ss.159H(1) and 159H(2)(l) is to modify s.390 so that it creates an accessory or concurrent liability in the corporate officer whose recklessness is attributed to the company, not merely in respect of the company’s liability for the substantive s.384 offence, but also in respect of the company’s liability for an attempt to commit that offence.  The reasoning by which this conclusion is reached is as follows.

45.Section 159H(1) provides that it only operates in relation to a provision to which s.159H applies, that is, a statutory provision within one of the categories listed in s.159H(2).  The relevant category for present purposes is s.159H(2)(l) which makes s.159H(1) applicable to statutory provisions “whereby, if an offence committed by a body corporate is proved to have been committed with the consent or connivance of another person, that person also is guilty of the offence.”  In other words, s.159H(2)(l) makes s.159H(1) applicable to provisions which create statutory liability on the part of corporate officers arising concurrently with liability on the part of the company.

46.Section 390 falls exactly within s.159H(2)(l).  It is a provision whereby if an offence under the SFO [s.384] which is committed by a body corporate [Daido] is proved to have been committed with the connivance of another person [Mr To] that person is also guilty of the offence

47.Once one concludes that s.159H(1) is applicable to s.390 by virtue of s.159H(2)(l), the former section must be construed as follows:

“Any provision to which this section applies [ie s.390]shall have effect with respect to an offence under section 159G of attempting to commit an offence as it has effect with respect to the offence attempted [ie under s.384].”

48.What this means is that, s.159H(1) takes effect so as to make s.390 apply to attempts to commit s.384 offences under s.159G in the same way that s.390 applies to substantive s.384 offences.  In each case, it creates a statutory accessory or concurrent liability on the part of the officer whose recklessness is attributed to the company.  Effectively, it requires us to read s.390(1) with the italicised words inserted:

“Where the commission of an offence under this Ordinance or of an attempt to commit an offence under this Ordinance by a corporation is ... attributable to any recklessness on the part of, any officer of the corporation, or any person who was purporting to act in any such capacity, that person, as well as the corporation, is guilty of the offence and is liable to be proceeded against and punished accordingly.”

49.Daido being guilty of an attempt at committing a s.384 offence which is attributable to recklessness on the part of Mr To, s.390 as modified by s.159H fixes him with liability concurrent with Daido’s liability under s.384 – and therefore with Daido’s liability “under the Ordinance” – for the offence of attempt.

50.Mr Chang sought to argue that s.159H(2)(l) was inapplicable to s.390 because it addresses only a category of statutory provision involving “the consent or connivance of another person”.  Section 390, he submitted, does not simply involve the corporate officer’s “consent or connivance” but instead, refers to offences “aided, abetted, counselled, procured or induced by, or committed with the consent or connivance of, or attributable to any recklessness on the part of, any officer”.  In the present case in particular, only the “attributable to ... recklessness” limb of s.390 was involved and that is not a limb addressed by s.159H(2)(l).

51.We do not accept that argument.  We consider that the present case involves the “connivance” of Mr To in the company’s attempted offence.  The various limbs of s.390 are overlapping and not mutually exclusive.  Thus, a person who aids and abets, etc, the company in committing the offence may plainly also be said to have connived with the company in doing so.  Equally, a person who supplies the necessary recklessness for the company’s offence “connives” with the company to commit the offence.  Section 159H(2)(l) use of “connivance” is therefore sufficiently wide to catch the present instance of potential liability under s.390.

Conclusion

52.For the reasons which we have given above, the appeal must be dismissed with costs (each side having conceded that costs should follow the event).

Sir Noel Power NPJ:

53.I agree with the judgment of Mr Justice Chan PJ and Mr Justice Ribeiro PJ.

Lord Woolf NPJ:

54.I agree with the judgment of Mr Justice Chan PJ and Mr Justice Ribeiro PJ.

Mr Justice Bokhary PJ:

55.The Court unanimously dismisses the appeal with costs.

Mr Denis Chang SC and Mr Jeremy S K Chan (instructed by Messrs Richards Butler) for the appellant

Mr Adrian Bell and Mr Derek Chan (instructed by the Securities and Futures Commission) for the respondent