SECURITIES AND FUTURES COMMISSION v. JIA YUETING AND OTHERS

SECURITIES AND FUTURES COMMISSION v. JIA YUETING AND OTHERS

On the agreed facts the Court was satisfied the Company’s business and affairs (including transfers to LeShi-related entities and failures of disclosure and internal control) fell within s214(1)(b),(c) and (d). The 5th Respondent was partly responsible by approving and facilitating Transactions 3, 4-1 and 4-2, failing to address auditor (EY) concerns and not exercising independent judgment. Having regard to seriousness and agreed mitigation, the Court approved the Carecraft settlement and ordered a five-year disqualification and payment of HK$4,000,000 to the Company (inclusive of interest) and HK$750,000 towards SFC’s costs.

Citation
[2026] HKCFI 2152
Parties
Petitioner (regulator): Securities and Futures Commission; 1st Respondent (former Executive Director and Chairman; Controller of Le Shi): Jia Yueting; 2nd Respondent (former Executive Director, CFO and Company Secretary): Jiang Chao; 3rd Respondent (former Executive Director and Ceo): Liu Jiangfeng; 4th Respondent (former Executive Director; Le Shi Affiliate): Liu Hong; 5th Respondent (former Finance Manager and Executive Director of Coolpad; Subject of Carecraft Settlement): Zhang Wei; 6th Respondent (independent Non Executive Director; Audit Committee Chairman): Chan King Chung; 7th Respondent (independent Non Executive Director and Audit Committee Member); 8th Respondent (coolpad Group Limited, Listed Company): Xie Weixin; Coolpad Group Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
22 April 2026
Case Number
HCMP1074/2021
Procedural Posture
Section 214 Petition Under the Securities and Futures Ordinance (director Disqualification and Compensation) / Decision on Carecraft Settlement and Reasons for Decision (disposal Against 5th Respondent)
Outcome
Proceedings against the 5th Respondent disposed of by Carecraft settlement; Court accepted agreed facts and made orders against 5th Respondent
Legal Topics
Director Disqualification, Misfeasance, Breach of Listing Rules, Disclosure Obligations, Compensation Order, Carecraft Settlement Procedure
Source Language
EN
Securities Law Company Law Regulatory Enforcement Corporate Governance Director Disqualification Misfeasance Breach of Listing Rules Disclosure Obligations +2 more

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Parties

Securities and Futures Commission

Petitioner (regulator)

Jia Yueting

1st Respondent (former Executive Director and Chairman; Controller of Le Shi)

Jiang Chao

2nd Respondent (former Executive Director, CFO and Company Secretary)

Liu Jiangfeng

3rd Respondent (former Executive Director and Ceo)

Liu Hong

4th Respondent (former Executive Director; Le Shi Affiliate)

Zhang Wei

5th Respondent (former Finance Manager and Executive Director of Coolpad; Subject of Carecraft Settlement)

Chan King Chung

6th Respondent (independent Non Executive Director; Audit Committee Chairman)

Xie Weixin; Coolpad Group Limited

7th Respondent (independent Non Executive Director and Audit Committee Member); 8th Respondent (coolpad Group Limited, Listed Company)

Procedural Posture

Section 214 Petition Under the Securities and Futures Ordinance (director Disqualification and Compensation) / Decision on Carecraft Settlement and Reasons for Decision (disposal Against 5th Respondent)

Legal Issues

  1. 1 Whether the Company’s business or affairs were conducted in a manner falling within s214(1)(b),(c) and (d) of the SFO
  2. 2 Whether the 5th Respondent was partly responsible for that conduct
  3. 3 Appropriate period of director disqualification

Ratio Decidendi

On the agreed facts the Court was satisfied the Company’s business and affairs (including transfers to LeShi-related entities and failures of disclosure and internal control) fell within s214(1)(b),(c) and (d). The 5th Respondent was partly responsible by approving and facilitating Transactions 3, 4-1 and 4-2, failing to address auditor (EY) concerns and not exercising independent judgment. Having regard to seriousness and agreed mitigation, the Court approved the Carecraft settlement and ordered a five-year disqualification and payment of HK$4,000,000 to the Company (inclusive of interest) and HK$750,000 towards SFC’s costs.

Court Disposition

Proceedings against the 5th Respondent disposed of by Carecraft settlement; Court accepted agreed facts and made orders against 5th Respondent

Orders

  • Disqualification order under s214(2)(d) SFO: Zhang Wei (5th Respondent) disqualified from acting as director or being concerned in management of any Hong Kong corporation for 5 years without leave of the Court
  • Compensation order under s214(2)(e) SFO: 5th Respondent to pay HK$4,000,000 to Coolpad Group Limited, inclusive of interest