SECURITIES AND FUTURES COMMISSION v. CHEUNG KENG CHING AND OTHERS

SECURITIES AND FUTURES COMMISSION v. CHEUNG KENG CHING AND OTHERS

On the uncontested facts the court found that the four transactions amounted to misfeasance/defalcation, breaches of directors' duties and conduct unfairly prejudicial to members under s214; accordingly the court made disqualification orders (R3 for 4 years; R1 and R2 for 5 years) and ordered Rontex to commence High Court civil proceedings against R1, R2 and R3 within 60 days with specified directions allowing use of admissions/documents from these proceedings, modest quarterly reporting to the SFC and liberty to apply for further directions; witness expenses and costs procedure ordered.

Citation
SECURITIES AND FUTURES COMMISSION v. CHEUNG KENG CHING AND OTHERS
Parties
Petitioner: Securities and Futures Commission; 1st Respondent: Cheung Keng Ching; 2nd Respondent: Chou Mei; 3rd Respondent: Man, Kevin; 4th Respondent (company): Rontex International Holdings Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 March 2010
Case Number
HCMP1869/2008
Procedural Posture
Section 214 Disqualification Petition Under the Securities and Futures Ordinance (cap.571) / Judgment and Orders (court of First Instance)
Outcome
Disqualification orders made against R1, R2 and R3; Rontex ordered to commence civil proceedings against R1, R2 and R3 with specified directions; witness expenses allowed; costs submissions to be filed and final costs order reserved.
Legal Topics
Director Disqualification, Misfeasance and Defalcation, Unfair Prejudice, Breach of Fiduciary Duty, Disclosure Obligations Under Listing Rules, Directions for Civil Recovery
Source Language
EN
Company Law Securities Regulation Directors' Duties Civil Procedure Director Disqualification Misfeasance and Defalcation Unfair Prejudice Breach of Fiduciary Duty +2 more

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Parties

Securities and Futures Commission

Petitioner

Cheung Keng Ching

1st Respondent

Chou Mei

2nd Respondent

Man, Kevin

3rd Respondent

Rontex International Holdings Limited

4th Respondent (company)

Procedural Posture

Section 214 Disqualification Petition Under the Securities and Futures Ordinance (cap.571) / Judgment and Orders (court of First Instance)

Legal Issues

  1. 1 Whether the respondents' conduct in four specific transactions constituted misfeasance/defalcation and/or conduct unfairly prejudicial to members under s214
  2. 2 Whether respondents breached disclosure obligations under the Listing Rules
  3. 3 Whether and for what period disqualification orders should be made against the respondents

Ratio Decidendi

On the uncontested facts the court found that the four transactions amounted to misfeasance/defalcation, breaches of directors' duties and conduct unfairly prejudicial to members under s214; accordingly the court made disqualification orders (R3 for 4 years; R1 and R2 for 5 years) and ordered Rontex to commence High Court civil proceedings against R1, R2 and R3 within 60 days with specified directions allowing use of admissions/documents from these proceedings, modest quarterly reporting to the SFC and liberty to apply for further directions; witness expenses and costs procedure ordered.

Court Disposition

Disqualification orders made against R1, R2 and R3; Rontex ordered to commence civil proceedings against R1, R2 and R3 with specified directions; witness expenses allowed; costs submissions to be filed and final costs order reserved.

Orders

  • 3rd Respondent (Man, Kevin) is disqualified for 4 years from acting as director, liquidator, receiver or manager or taking part in management of any corporation or their subsidiaries or affiliates without leave of the court
  • 1st and 2nd Respondents (Cheung Keng Ching and Chou Mei) are disqualified for 5 years from acting as director, liquidator, receiver or manager or taking part in management of any corporation or their subsidiaries or affiliates without leave of the court (save and except RC Apparels Limited)