SECURITIES AND FUTURES COMMISSION v. FUNG CHIU AND OTHERS

SECURITIES AND FUTURES COMMISSION v. FUNG CHIU AND OTHERS

On the agreed facts the 5th respondent, as finance director and compliance officer, failed to exercise reasonable skill, care and diligence, abdicated responsibilities to a de facto controller, permitted substantial unsecured deposits, loans and advances and allowed materially misleading public disclosures; that conduct amounted to misfeasance/misconduct and was unfairly prejudicial under s214 SFO, justifying a disqualification order. Given admitted cooperation and mitigation the appropriate period was six years limited to listed corporations and their subsidiaries/affiliates, taking effect 21 days after the order.

Citation
SECURITIES AND FUTURES COMMISSION v. FUNG CHIU AND OTHERS
Parties
Petitioner: Securities and Futures Commission; 5th Respondent: Chow Chun Kwong; Subject Company: GP NanoTechnology Group Limited (in liquidation)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
30 January 2009
Case Number
HCMP2524/2006
Procedural Posture
Disqualification Petition Under Section 214 Securities and Futures Ordinance (carecraft Settlement) / Judgment Following Carecraft Procedure
Outcome
Disqualification order made against Chow Chun Kwong under section 214 SFO for six years, limited to acting as director or taking part in management of corporations listed on the SEHK or their subsidiaries or affiliates, to take effect at the beginning of the 21st day after the order.
Legal Topics
Director Disqualification, Misfeasance, Director Duties and Negligence, Market Disclosure and Misrepresentation, GEM Listing Rules Breaches, Takeovers Code Breaches
Source Language
EN
Company Law Securities Regulation Administrative/regulatory Enforcement Director Disqualification Misfeasance Director Duties and Negligence Market Disclosure and Misrepresentation GEM Listing Rules Breaches +1 more

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Parties

Securities and Futures Commission

Petitioner

Chow Chun Kwong

5th Respondent

GP NanoTechnology Group Limited (in liquidation)

Subject Company

Procedural Posture

Disqualification Petition Under Section 214 Securities and Futures Ordinance (carecraft Settlement) / Judgment Following Carecraft Procedure

Legal Issues

  1. 1 Whether the 5th respondent's conduct amounted to misfeasance/misconduct or conduct unfairly prejudicial under s214 SFO
  2. 2 Whether the 5th respondent abdicated director responsibilities and failed to exercise reasonable skill, care and diligence
  3. 3 Whether public statements (Clarification Announcements and Prospectus) were materially false or misleading

Ratio Decidendi

On the agreed facts the 5th respondent, as finance director and compliance officer, failed to exercise reasonable skill, care and diligence, abdicated responsibilities to a de facto controller, permitted substantial unsecured deposits, loans and advances and allowed materially misleading public disclosures; that conduct amounted to misfeasance/misconduct and was unfairly prejudicial under s214 SFO, justifying a disqualification order. Given admitted cooperation and mitigation the appropriate period was six years limited to listed corporations and their subsidiaries/affiliates, taking effect 21 days after the order.

Court Disposition

Disqualification order made against Chow Chun Kwong under section 214 SFO for six years, limited to acting as director or taking part in management of corporations listed on the SEHK or their subsidiaries or affiliates, to take effect at the beginning of the 21st day after the order.

Orders

  • The 5th respondent (Chow Chun Kwong) is disqualified for six years from being or continuing to be a director of any corporation listed on the SEHK or any subsidiary or affiliate of such a listed corporation, or from directly or indirectly taking part in the management of any such corporation, without leave of the court
  • The disqualification period is six years, to take effect at the beginning of the 21st day after the day on which the order is made