The Market Misconduct Tribunal (MMT) has ordered Ms Choi Ban Yee, the wife of a chauffeur who worked for the family of the chairman of Tian An China Investments Company Limited (Tian An) at the material time, to disgorge $106,968 illicit profit gained from insider dealing in the shares of Asiasec Properties Limited, formerly known as Dan Form Holdings Company Limited (Dan Form), before a takeover involving the companies was announced (Notes 1 to 3).
The MMT also imposed against Choi and the chauffeur, Mr Sit Yuk Yin, cold shoulder orders for 16 months, cease and desist orders and an order to pay the costs and expenses incurred by the government and the SFC (Notes 4 to 6).
On 22 September 2016, Dan Form, Tian An and a wholly owned subsidiary of Tian An, Autobest Holdings Limited (Autobest), made a joint announcement, revealing a conditional agreement for Autobest to acquire 36.45% of Dan Form’s total issued share capital from Mr Dai Xiaoming, the then chairman, chief executive and executive director of Dan Form, at $2.75 per share. Upon completion of Autobest’s acquisition, Autobest would be required to make a mandatory cash offer for all other Dan Form shares in issue at the same price.
The MMT is satisfied that Sit was in possession of inside information about the takeover by 13 September 2016, including the indicative offer price and the potential trading suspension of Dan Form. He then counselled or procured his wife to deal in Dan Form shares on 14 September 2016. Choi, having received inside information, acquired Dan Form shares and made a profit of $106,968 from selling the shares after the takeover was announced (Note 7).
The MMT proceedings against Dan Form’s former company secretary, Ms Cynthia Chen Si Ying, and Mr Wen Lide, who is related to Chen, are ongoing (Note 8).
Notes:
- The proceedings were heard before the MMT Chairman, Mr Michael Lunn, GBS and two members.
- The disgorgement order was made under section 257(1)(d) of the Securities and Futures Ordinance (SFO) for any profit gained or loss avoided by the person to be paid to the Government.
- Dan Form shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on 28 February 1973. Its name was changed to Asiasec Properties Limited with effect from 9 June 2017.
- The cold shoulder orders, which ban Sit and Choi from dealing in any securities, futures contract, leveraged foreign exchange contract or collective investment scheme in Hong Kong, were made under section 257(1)(b) of SFO where the maximum period of the order is five years.
- The cease and desist orders, which prohibit Sit and Choi from engaging in any conduct which constitutes market misconduct, were made under section 257(1)(c) of the SFO.
- The costs orders were made under sections 257(1)(e) and (f) of the SFO.
- The MMT report setting out the reasons for making the relevant orders is available on its website.
- Please see the SFC’s press release dated 23 April 2024.
