SECURITIES AND FUTURES COMMISSION v. LI HEJUN AND OTHERS

SECURITIES AND FUTURES COMMISSION v. LI HEJUN AND OTHERS

On the agreed facts the statutory conditions for relief under s214 SFO were satisfied; the 1st respondent’s breaches were serious because of his executive role, control of counterparties and large sums involved and warranted an 8‑year disqualification; the 2nd to 5th respondents’ failings amounted to incompetence/indifference and warranted disqualifications of 4, 4, 3 and 3 years respectively; respondents to pay SFC costs and the 1st respondent to procure repayment obligations per the agreed facts.

Citation
SECURITIES AND FUTURES COMMISSION v. LI HEJUN AND OTHERS
Parties
Petitioner: Securities and Futures Commission; 1st Respondent: Li Hejun; 2nd Respondent: Zhao Lan; 3rd Respondent: Wang Tongbo; 4th Respondent: Xu Zheng; 5th Respondent: Wang Wenjing; 6th Respondent: Hanergy Thin Film Power Group Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
4 September 2017
Case Number
HCMP166/2017
Procedural Posture
Section 214 SFO Petition / Judgment (carecraft Procedure; Determination on Agreed Facts)
Outcome
Petition allowed by consent; court made disqualification and ancillary orders under s214 SFO on the agreed facts
Legal Topics
Directors' Disqualification, Directors' Duties, Misfeasance, Conflict of Interest, Carecraft Procedure, Remedies Under SFO S214
Source Language
EN
Securities Law Company Law Corporate Governance Directors' Disqualification Directors' Duties Misfeasance Conflict of Interest Carecraft Procedure +1 more

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Parties

Securities and Futures Commission

Petitioner

Li Hejun

1st Respondent

Zhao Lan

2nd Respondent

Wang Tongbo

3rd Respondent

Xu Zheng

4th Respondent

Wang Wenjing

5th Respondent

Hanergy Thin Film Power Group Limited

6th Respondent

Procedural Posture

Section 214 SFO Petition / Judgment (carecraft Procedure; Determination on Agreed Facts)

Legal Issues

  1. 1 Whether relief under s214 SFO is made out against the directors
  2. 2 Whether the directors breached duties by failing to recover substantial receivables from related parties
  3. 3 Whether the 1st respondent was in conflict of interest and preferred the interests of the controller (Holding) over Hanergy

Ratio Decidendi

On the agreed facts the statutory conditions for relief under s214 SFO were satisfied; the 1st respondent’s breaches were serious because of his executive role, control of counterparties and large sums involved and warranted an 8‑year disqualification; the 2nd to 5th respondents’ failings amounted to incompetence/indifference and warranted disqualifications of 4, 4, 3 and 3 years respectively; respondents to pay SFC costs and the 1st respondent to procure repayment obligations per the agreed facts.

Court Disposition

Petition allowed by consent; court made disqualification and ancillary orders under s214 SFO on the agreed facts

Orders

  • Order made in terms of paragraphs 6.1 and 6.3 of the Statement of Agreed Facts against the 1st respondent with disqualification for 8 years
  • Orders made in terms of paragraph 6.1 of the Statements of Agreed Facts against the 2nd to 5th respondents with disqualifications of 4, 4, 3 and 3 years respectively