SECURITIES AND FUTURES COMMISSION v. YU LONGRUI AND OTHERS

SECURITIES AND FUTURES COMMISSION v. YU LONGRUI AND OTHERS

On the agreed facts the Court was satisfied the Company’s business/affairs were conducted in the manner described in s214(1)(b),(c),(d) of the SFO; R2 and R7 were respectively partly responsible and disqualification orders under s214(2)(d) were justified. Having applied the established three‑bracket and Warderly criteria and allowed mitigation for cooperation and Carecraft settlement, the Court ordered disqualification of R2 for six years (with a carve‑out for EM Management (Hong Kong) Limited) and R7 for 1.5 years (with a carve‑out for Fan, Chan & Co. Limited), together with agreed costs payments.

Citation
[2022] HKCFI 653
Parties
Petitioner: Securities and Futures Commission; 1st Respondent: Yu Longrui; 2nd Respondent: Chan Wai Chuen; 3rd Respondent: Yu Longhui; 4th Respondent: Zheng Feng; 5th Respondent: Yeung Shing; 6th Respondent: Yu Lun; 7th Respondent: Yun Lok Ming; 8th Respondent: Jiang Weiliang
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
9 March 2022
Case Number
HCMP1112/2019
Procedural Posture
Section 214 SFO Petition (disqualification) / Judgment and Sealed Order Following Carecraft Settlements and Reasons for Decision
Outcome
Disqualification orders made under s214(2)(d) SFO: Chan Wai Chuen (2nd Respondent) disqualified for 6 years subject to carve‑out for EM Management (Hong Kong) Limited; Yun Lok Ming (7th Respondent) disqualified for 1.5 years subject to carve‑out for Fan, Chan & Co. Limited. Costs orders made as agreed.
Legal Topics
Director Disqualification, Misrepresentation, False Accounting, Audit Failures, Listing Rules Breach, Carecraft Settlement
Source Language
EN
Securities Law Company Law Corporate Governance Financial Regulation Director Disqualification Misrepresentation False Accounting Audit Failures +2 more

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Parties

Securities and Futures Commission

Petitioner

Yu Longrui

1st Respondent

Chan Wai Chuen

2nd Respondent

Yu Longhui

3rd Respondent

Zheng Feng

4th Respondent

Yeung Shing

5th Respondent

Yu Lun

6th Respondent

Yun Lok Ming

7th Respondent

Jiang Weiliang

8th Respondent

Procedural Posture

Section 214 SFO Petition (disqualification) / Judgment and Sealed Order Following Carecraft Settlements and Reasons for Decision

Legal Issues

  1. 1 Whether the business or affairs of the listed company were conducted in a manner falling within s214(1)(b),(c) and (d) of the SFO
  2. 2 Whether R2 and R7 are persons wholly or partly responsible for that conduct
  3. 3 Appropriate duration and scope of disqualification orders under s214(2)(d) and whether carve-outs should be granted

Ratio Decidendi

On the agreed facts the Court was satisfied the Company’s business/affairs were conducted in the manner described in s214(1)(b),(c),(d) of the SFO; R2 and R7 were respectively partly responsible and disqualification orders under s214(2)(d) were justified. Having applied the established three‑bracket and Warderly criteria and allowed mitigation for cooperation and Carecraft settlement, the Court ordered disqualification of R2 for six years (with a carve‑out for EM Management (Hong Kong) Limited) and R7 for 1.5 years (with a carve‑out for Fan, Chan & Co. Limited), together with agreed costs payments.

Court Disposition

Disqualification orders made under s214(2)(d) SFO: Chan Wai Chuen (2nd Respondent) disqualified for 6 years subject to carve‑out for EM Management (Hong Kong) Limited; Yun Lok Ming (7th Respondent) disqualified for 1.5 years subject to carve‑out for Fan, Chan & Co. Limited. Costs orders made as agreed.

Orders

  • Pursuant to s214(2)(d) SFO, save and except for EM Management (Hong Kong) Limited, the 2nd Respondent shall not, without leave of the Court, for a period of 6 years from the date of the Order: (a) be or continue to be a director, liquidator, receiver or manager of the property or business of DBA Telecommunication...
  • Pursuant to s214(2)(d) SFO, save and except for Fan, Chan & Co. Limited, the 7th Respondent shall not, without leave of the Court, for a period of 1.5 years from the date of the Order: (a) be or continue to be a director, liquidator, receiver or manager of the property or business of DBA Telecommunication (Asia)...