SECURITIES AND FUTURES COMMISSION v. LI WING SANG (A BANKRUPT) AND OTHERS

SECURITIES AND FUTURES COMMISSION v. LI WING SANG (A BANKRUPT) AND OTHERS

On the evidence the 1st Respondent breached his duties by failing to recover Fan's Debt, failing to obtain control and oversight of Fuchao, failing to cause impairment provisions and permitting false or misleading disclosures; that conduct fell within s214(1)(b)-(d) and justified a middle‑bracket disqualification; the court imposed a 7‑year disqualification under s214(2)(d) and ordered the respondent to pay the Petitioner's costs.

Citation
[2025] HKCFI 466
Parties
Petitioner: Securities and Futures Commission; 1st Respondent (a Bankrupt): Li Wing Sang (李永生); 2nd Respondent: Liu Xinsheng (劉新生); 3rd Respondent (a Bankrupt): Chiu Chi Hong (招自康)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
27 January 2025
Case Number
HCMP2068/2020
Procedural Posture
SFO S214 Petition (director Disqualification) / Judgment After Trial (petition Against 1st Respondent)
Outcome
1st Respondent disqualified for 7 years under s214(2)(d) SFO; costs awarded to Petitioner
Legal Topics
Director Disqualification, Breach of Director Duties, Misfeasance, Misleading/disclosure Obligations, Financial Reporting and Impairment Provisions, Supervision and Oversight of Subsidiaries
Source Language
EN
Securities Law Company Law Regulatory Enforcement Corporate Governance Director Disqualification Breach of Director Duties Misfeasance Misleading/disclosure Obligations +2 more

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Parties

Securities and Futures Commission

Petitioner

Li Wing Sang (李永生)

1st Respondent (a Bankrupt)

Liu Xinsheng (劉新生)

2nd Respondent

Chiu Chi Hong (招自康)

3rd Respondent (a Bankrupt)

Procedural Posture

SFO S214 Petition (director Disqualification) / Judgment After Trial (petition Against 1st Respondent)

Legal Issues

  1. 1 Whether the companys business or affairs were conducted in a manner falling within s214(1)(b)-(d) of the SFO
  2. 2 Whether the 1st Respondent breached duties by failing to take reasonable steps to recover Fan's Debt
  3. 3 Whether the 1st Respondent failed to obtain sufficient control and oversight of Fuchao

Ratio Decidendi

On the evidence the 1st Respondent breached his duties by failing to recover Fan's Debt, failing to obtain control and oversight of Fuchao, failing to cause impairment provisions and permitting false or misleading disclosures; that conduct fell within s214(1)(b)-(d) and justified a middle‑bracket disqualification; the court imposed a 7‑year disqualification under s214(2)(d) and ordered the respondent to pay the Petitioner's costs.

Court Disposition

1st Respondent disqualified for 7 years under s214(2)(d) SFO; costs awarded to Petitioner

Orders

  • Pursuant to section 214(2)(d) Securities and Futures Ordinance (Cap.571), the 1st Respondent shall not for a period of 7 years from the date of this Order, without leave of the Court, be, or continue to be, a director, liquidator, or receiver or manager of the property or business of any listed or unlisted...
  • The 1st Respondent shall pay the Petitioner's costs in these proceedings, to be taxed if not agreed, with certificate for two counsel for the period up to and including 14 December 2021 and certificate for one counsel thereafter up to and including the date of this Order.