SECURITIES AND FUTURES COMMISSION v. FAN DI AND OTHERS

SECURITIES AND FUTURES COMMISSION v. FAN DI AND OTHERS

On the agreed facts the 1st Respondent authorised and caused substantial unauthorised payments, failed to obtain board approval, failed to conduct or disclose due diligence, and caused Listing Rules breaches; those facts amounted to defalcation, misfeasance and conduct engaging s214(1)(b) and (c), attracting the court's jurisdiction to disqualify, and the conduct fell into the middle severity bracket justifying a six year disqualification order (plus costs as agreed).

Citation
[2018] HKCFI 346
Parties
Petitioner: Securities and Futures Commission; 1st Respondent: Fan Di; 2nd Respondent: Li Xinggui; 3rd Respondent: Zheng Yingsheng; 4th Respondent: Zhou Li Yang
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
24 January 2018
Case Number
HCMP1761/2009
Procedural Posture
Disqualification Petition Under Section 214 of the Securities and Futures Ordinance (cap 571) / Decision Following Carecraft Summary Procedure (judgment Dated 24 January 2018)
Outcome
Disqualification order made against 1st Respondent for six years under section 214(2)(d) of the Securities and Futures Ordinance; costs ordered as agreed.
Legal Topics
Director Disqualification, Misfeasance and Defalcation, Listing Rules Breaches, Carecraft Procedure (summary Disposal), Due Diligence Failures
Source Language
EN
Corporate Law Securities Regulation Directors' Duties Company Disclosure Law Director Disqualification Misfeasance and Defalcation Listing Rules Breaches Carecraft Procedure (summary Disposal) +1 more

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Parties

Securities and Futures Commission

Petitioner

Fan Di

1st Respondent

Li Xinggui

2nd Respondent

Zheng Yingsheng

3rd Respondent

Zhou Li Yang

4th Respondent

Procedural Posture

Disqualification Petition Under Section 214 of the Securities and Futures Ordinance (cap 571) / Decision Following Carecraft Summary Procedure (judgment Dated 24 January 2018)

Legal Issues

  1. 1 Whether the agreed facts engage section 214(1)(b) and (c) of the Securities and Futures Ordinance
  2. 2 Whether a disqualification order is warranted and for what period
  3. 3 Whether breaches of Listing Rules and failures of disclosure and due diligence justify disqualification

Ratio Decidendi

On the agreed facts the 1st Respondent authorised and caused substantial unauthorised payments, failed to obtain board approval, failed to conduct or disclose due diligence, and caused Listing Rules breaches; those facts amounted to defalcation, misfeasance and conduct engaging s214(1)(b) and (c), attracting the court's jurisdiction to disqualify, and the conduct fell into the middle severity bracket justifying a six year disqualification order (plus costs as agreed).

Court Disposition

Disqualification order made against 1st Respondent for six years under section 214(2)(d) of the Securities and Futures Ordinance; costs ordered as agreed.

Orders

  • Disqualification order: the 1st Respondent shall for a period of 6 years not be, or continue to be, a director or liquidator of any listed or unlisted company in Hong Kong, nor directly or indirectly take part in management of any such company (order under s214(2)(d) SFO)
  • Order for costs in favour of the Petitioner as agreed between the parties