Hong Kong’s SFC launches proceedings against CMBC Capital over late disclosure of inside info
The SFC has also commenced proceedings in the MMT against six former directors of the company.
The Hong Kong Securities and Futures Commission (SFC) today announces that it has commenced proceedings in the Market Misconduct Tribunal (MMT) against CMBC Capital Holdings Limited and its former directors for late disclosure of inside information.
CMBC Capital was known as Mission Capital Holdings Limited (Mission Capital) when the alleged breach of the statutory corporate disclosure requirements occurred.
The SFC has also launched proceedings in the MMT against six former directors of Mission Capital for their reckless or negligent conduct resulting in the company’s alleged breach of the provisions of the corporate disclosure regime and for failing to take all reasonable measures to ensure that proper safeguards exist at the material time to prevent the alleged breach. The six former directors of Mission Capital at the material time include Mr Philip Suen Yick Lun, former Chief Executive Officer and Company Secretary, Mr Paul Suen Cho Hung, former Chairman, Mr Lau King Hang, former Executive Director, as well as three former Independent Non-Executive Directors, Mr Huang Zhencheng, Mr Weng Yixiang and Mr Wong Kwok Tai (Directors).
The SFC has found that on October 13, 2014, the Directors received through email the unaudited consolidated management accounts of Mission Capital for the five months ended August 31, 2014. These accounts revealed that Mission Capital made a cumulative profit for the five months ended August 31, 2014 of $838 million, representing a significant improvement in financial performance against an interim loss of $12 million for the six months ended September 30, 2013 and an annual profit of $417 million for the 12 months ended March 31, 2014.
The improvement in financial performance was not made public until November 7, 2014 when Mission Capital issued a profit alert announcement in relation to its financial performance for the six months ended September 30, 2014.
The SFC alleges that the information relating to the financial performance of Mission Capital for the first five months ended August 31, 2014 as contained in the August Management Accounts constituted inside information, and as such, the information should have been disclosed as soon as reasonably practicable after it was available to the Directors on October 13, 2014.