SECURITIES AND FUTURES COMMISSION v. XU JINPEI AND OTHERS

SECURITIES AND FUTURES COMMISSION v. XU JINPEI AND OTHERS

On the agreed facts the Court was satisfied that the Company’s accounts were materially overstated by a scheme of inflating and falsifying bank balances affecting consolidated financial statements, that the respondents each breached duties of care, skill and diligence thereby engaging s214(1)(b),(c) and (d), and that disqualification orders of 24, 33, 12 and 12 months respectively (with a carve out for Excellent Management Ltd for the 7th Respondent) were a proportionate exercise of the Court's discretion given gravity and mitigating factors.

Citation
[2026] HKCFI 2187
Parties
Petitioner: Securities and Futures Commission; 1st Respondent: Xu Jinpei; 2nd Respondent: Hong Yinzhi; 3rd Respondent: Wang Zhihong; 4th Respondent: Li Yuna; 5th Respondent: Hung Yvonne; 6th Respondent: Chiu Sai Chuen Nicholas; 7th Respondent: Chu Wai Wa Fangus; 8th Respondent: Ong King Keung
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
24 April 2026
Case Number
HCMP572/2022
Procedural Posture
Section 214 SFO Disqualification Petition / Carecraft Summary Procedure; Final Orders Made by Court of First Instance
Outcome
The Court ordered disqualification under s214(2) SFO: 4th Respondent disqualified 24 months; 5th Respondent disqualified 33 months; 7th Respondent disqualified 12 months (with carve out for Excellent Management Ltd); 8th Respondent disqualified 12 months. Respondents to pay SFC's costs, taxed if not agreed.
Legal Topics
Director Disqualification, Misfeasance, Financial Statement Falsification, Internal Controls, Audit Reliance
Source Language
EN
Company Law Securities Law Corporate Governance Regulatory Enforcement Director Disqualification Misfeasance Financial Statement Falsification Internal Controls +1 more

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Parties

Securities and Futures Commission

Petitioner

Xu Jinpei

1st Respondent

Hong Yinzhi

2nd Respondent

Wang Zhihong

3rd Respondent

Li Yuna

4th Respondent

Hung Yvonne

5th Respondent

Chiu Sai Chuen Nicholas

6th Respondent

Chu Wai Wa Fangus

7th Respondent

Ong King Keung

8th Respondent

Procedural Posture

Section 214 SFO Disqualification Petition / Carecraft Summary Procedure; Final Orders Made by Court of First Instance

Legal Issues

  1. 1 Whether the business or affairs of China Candy Holdings Limited were conducted in a manner within s214(1)(b),(c) and (d) of the SFO
  2. 2 Whether the identified directors breached duties of care, skill and diligence under company law and the Companies Ordinance s465
  3. 3 Appropriate duration and scope of disqualification orders and carve outs

Ratio Decidendi

On the agreed facts the Court was satisfied that the Company’s accounts were materially overstated by a scheme of inflating and falsifying bank balances affecting consolidated financial statements, that the respondents each breached duties of care, skill and diligence thereby engaging s214(1)(b),(c) and (d), and that disqualification orders of 24, 33, 12 and 12 months respectively (with a carve out for Excellent Management Ltd for the 7th Respondent) were a proportionate exercise of the Court's discretion given gravity and mitigating factors.

Court Disposition

The Court ordered disqualification under s214(2) SFO: 4th Respondent disqualified 24 months; 5th Respondent disqualified 33 months; 7th Respondent disqualified 12 months (with carve out for Excellent Management Ltd); 8th Respondent disqualified 12 months. Respondents to pay SFC's costs, taxed if not agreed.

Orders

  • 4th Respondent Li Yuna disqualified from acting as director or taking part in management of any Hong Kong corporation for 24 months without leave of the Court
  • 5th Respondent Hung Yvonne disqualified from acting as director or taking part in management of any Hong Kong corporation for 33 months without leave of the Court