SECURITIES AND FUTURES COMMISSION v. CHEN LI-JUN AND OTHERS

SECURITIES AND FUTURES COMMISSION v. CHEN LI-JUN AND OTHERS

On the agreed facts in the Carecraft schedules the business and affairs of NAH were conducted in a manner involving defalcation, fraud, misfeasance and/or other misconduct under s214(1)(b)-(d) SFO; the 8th, 10th and 11th Respondents were partly responsible through acts or omissions (failure to supervise, exercise independent judgment and to investigate serious unexplained transactions); accordingly disqualification orders were justified and proportionate: 8th respondent 3 years; 10th respondent 20 months (with carve-outs for five named companies); 11th respondent 20 months (with agreed carve-outs), together with costs to the Commission as taxed if not agreed.

Citation
[2023] HKCFI 1538
Parties
Petitioner: Securities and Futures Commission; 1st Respondent: CHEN LI-JUN; 2nd Respondent: CAI WEIHENG; 3rd Respondent: LU YING; 4th Respondent: CHEN JING; 5th Respondent: REN HAI; 6th Respondent: PENG GUOJIANG; 7th Respondent: CHEN LI AN; 8th Respondent: LIU YONG; 9th Respondent: WEN YUANYI; 10th Respondent: CHIU KAM HING KATHY; 11th Respondent: FAN CHUNG YUE WILLIAM; 12th Respondent: TING TIT CHEUNG; 13th Respondent: PARKO (HONG KONG) LIMITED; 14th Respondent: NATIONAL AGRICULTURAL HOLDINGS LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
13 June 2023
Case Number
HCMP36/2021
Procedural Posture
S214 SFO Petition (disqualification) / Final Decision (court of First Instance)
Outcome
Disqualification orders granted under s214 SFO against the 8th, 10th and 11th Respondents with specified durations and carve-outs as set out below; costs awarded to the petitioner
Legal Topics
Director Disqualification, Misfeasance, Fraud and Defalcation, Misleading Statements and Disclosure, Listing Rules Compliance, Forensic Accounting, Board Supervision Duties
Source Language
EN
Corporate Law Securities Regulation Company Law Financial Crime Corporate Governance Director Disqualification Misfeasance Fraud and Defalcation +4 more

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Parties

Securities and Futures Commission

Petitioner

CHEN LI-JUN

1st Respondent

CAI WEIHENG

2nd Respondent

LU YING

3rd Respondent

CHEN JING

4th Respondent

REN HAI

5th Respondent

PENG GUOJIANG

6th Respondent

CHEN LI AN

7th Respondent

LIU YONG

8th Respondent

WEN YUANYI

9th Respondent

CHIU KAM HING KATHY

10th Respondent

FAN CHUNG YUE WILLIAM

11th Respondent

TING TIT CHEUNG

12th Respondent

PARKO (HONG KONG) LIMITED

13th Respondent

NATIONAL AGRICULTURAL HOLDINGS LIMITED

14th Respondent

Procedural Posture

S214 SFO Petition (disqualification) / Final Decision (court of First Instance)

Legal Issues

  1. 1 Whether the business or affairs of NAH were conducted in a manner falling within s214(1)(b)-(d) of the SFO
  2. 2 Whether the 8th, 10th and 11th Respondents were partly responsible for that misconduct
  3. 3 What disqualification periods and carve-outs (if any) are appropriate and proportionate

Ratio Decidendi

On the agreed facts in the Carecraft schedules the business and affairs of NAH were conducted in a manner involving defalcation, fraud, misfeasance and/or other misconduct under s214(1)(b)-(d) SFO; the 8th, 10th and 11th Respondents were partly responsible through acts or omissions (failure to supervise, exercise independent judgment and to investigate serious unexplained transactions); accordingly disqualification orders were justified and proportionate: 8th respondent 3 years; 10th respondent 20 months (with carve-outs for five named companies); 11th respondent 20 months (with agreed carve-outs), together with costs to the Commission as taxed if not agreed.

Court Disposition

Disqualification orders granted under s214 SFO against the 8th, 10th and 11th Respondents with specified durations and carve-outs as set out below; costs awarded to the petitioner

Orders

  • Disqualify LIU YONG (8th Respondent) from being concerned in the management of any corporation for 3 years under s214 SFO
  • Disqualify CHIU KAM HING KATHY (10th Respondent) from being concerned in the management of any listed or other corporations in Hong Kong for 20 months under s214 SFO, subject to carve-outs for the following five companies: Prime Investments Group Limited; Gooders International Investment Limited; The Association of...