Securities and Futures Commission v. Lo Kai Bong and Others

On 11 September 2026, Deputy High Court Judge Gary CC Lam handed down judgment in Securities and Futures Commission v Lo Kai Bong and Others [2026] HKCFI 5211, continuing worldwide Mareva injunctions against Lo and his wholly-owned Major Success Group Limited. Mr Jin Pao SC, leading Mr Keith Chan, acted for the SFC.

The section 214 SFO petition concerns Lo, former chairman of LET Group Holdings and Summit Ascent, who pressed ahead with a US$116 million disposal of a Russian gaming subsidiary in breach of the Listing Rules and Takeovers Code. All other directors resigned in protest, and the Companies' listings were cancelled in September 2025. When SFC amended its petition to seek appointment of a receiver to sell Japanese landholdings (the Niseko and Okinawa properties, together worth roughly HK$398 million) to satisfy any share repurchase order, Lo moved those lands out of the Companies via a Deed of Set-Off on 23 February 2026, transferring them to Major Success as security for his personal HK$400 million First Asian loan. He then agreed to the SFC's amendment without disclosing the transfer, leaving the receiver relief academic (§43(5)).

The Court held that: (1) there was a real, indeed actual, risk of dissipation. Lo used the Companies' assets to secure his personal loan in what was "strongly arguably" a breach of fiduciary duty, kept silent about the transfer, and consented to relief he knew had become futile (§49). (2) Major Success was a proper Chabra defendant: as constructive trustee of assets Lo had wrongfully siphoned into it, Major Success's assets were amenable to execution against Lo; sole ownership alone was insufficient, but combined with the constructive-trust basis it was (§52). (3) SFC was not required to give a cross-undertaking in damages. The court rejected the English line of criticism (Payroll & Pension Services, Sinaloa Gold) that public bodies should always be subject to cross-undertakings, holding that SFC's statutory funding via levies, its enforcement role, and the rule that costs follow the event struck the right balance (§66). (4) Lo's offered ringfencing undertaking on net sale proceeds was refused given his "low commercial morality" (§70).

Variations were granted only in modest terms: HK$300,000 per month for living expenses (not Lo's claimed HK$800,000, which the court termed extravagant given HK$9 million of Louis Vuitton watch purchases), HK$200,000 per month for Major Success's legal costs, a HK$1.2 million one-off for this hearing, and payment under an IRD demand notice. Lo and Major Success were ordered to pay SFC's costs, summarily assessed at HK$2,600,000 (§88).

For practitioners, the decision confirms the SFC's effective route to freezing relief without a cross-undertaking while signalling tighter scrutiny of living-expense variations where the respondent's expenditure profile is plainly non-ordinary.