The Securities and Futures Commission (SFC) is seeking disqualification orders from the Court of First Instance against three former directors of China Longevity Group Company Limited (China Longevity), formerly known as Sijia Group Company Limited, in legal proceedings under section 214 of the Securities and Futures Ordinance (SFO) (Notes 1 and 2).
The three former directors of China Longevity named in the proceedings are Mr Lin Shengxiong, former Chairman and Executive Director, Mr Zhang Hongwang and Mr Huang Wanneng, both former Executive Directors.
The legal proceedings follow the SFC’s investigation into the overstatements of China Longevity’s cash and cash equivalents balance by about RMB198.9 million and RMB302.4 million as at 31 December 2011 and 30 June 2012, respectively; the overstatements accounted for about 13.6% and 19.9% of China Longevity’s net assets on aforementioned dates. As a result, China Longevity’s annual reports for the years ended 31 December 2011 and 2012 and the interim report for the six months ended 30 June 2012 contained material misstatements and did not reflect the true state of the company’s affairs.
The SFC alleges that the former directors had allowed or caused China Longevity to overstate its cash and cash equivalents, and hence its net assets in its financial statements. They had also failed to cause or procure China Longevity to make timely, accurate and complete disclosure of the discovery of the overstatements and other audit irregularities by the then auditors of China Longevity.
Notes:
1. As directed by the SFC, trading in shares of China Longevity has been suspended since 4 December 2014 under Rule 8 of the Securities and Futures (Stock Market Listing) Rules.
2. Under section 214 of the SFO, the court may, amongst other things, make orders to disqualify a person from being a director or being involved, directly or indirectly, in the management of any corporation for a period of up to 15 years, if the person is found to be wholly or partly responsible for the company’s affairs having been conducted in a manner involving defalcation, fraud, misfeasance or other misconduct towards the company or its members.
The SFC filed the Petition under section 214 of the SFO on 25 November 2022 against the three former directors who were all domiciled in the Mainland. The SFC obtained leave from the Court of First Instance to serve the Petition on them out of the jurisdiction on 28 April 2023. Judicial assistance was sought in the Mainland to effect service of the Petition on the former directors. The first direction hearing was held on 30 October 2025 and the next case management conference is scheduled for 25 February 2026.
