The Securities and Futures Commission (SFC) is seeking disqualification orders from the Court of First Instance against four former directors of Century Energy International Holdings Limited, formerly known as China Oil Gangran Energy Group Holdings Limited (China Oil Gangran Energy), in legal proceedings under section 214 of the Securities and Futures Ordinance (SFO) (Note 1).
The four individuals named in the SFC’s proceedings are: Mr Gregory Ho Chun Kit, former executive director; Mr Zheng Jian Peng, former executive director, chief financial officer and company secretary; Ms Eugenia Yang, and Mr Vincent Lau Sung Tat, both former independent non-executive directors (Note 2).
The SFC’s action follows an investigation into China Oil Gangran Energy’s loss of control over four major operating subsidiaries in the Mainland (Note 3). As a consequence, they were deconsolidated from China Oil Gangran Energy with effect from 1 January 2019, resulting in a loss of $184 million for the company for the year ended 31 March 2019.
The SFC alleges that the former directors failed to properly supervise these four major operating subsidiaries in the Mainland; nor did they act in the company’s best interests. As a result, their prolonged lack of oversight led to the deconsolidation of these operating subsidiaries and significant financial losses.
Additionally, Ho, Yang, and Lau were responsible for China Oil Gangran Energy’s publication of a circular in 2014 containing inaccurate or misleading information about one of the operating subsidiaries in the Mainland.
Notes:
- China Oil Gangran Energy was listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited on 18 May 2011. The company and its subsidiaries were principally engaged in the trading of refined oil and methyl tert-butyl ether, as well as the manufacture and sale of power and data cords at the material time.
- 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, amongst other conduct, involving defalcation, fraud, misfeasance or other misconduct towards the company or its members.
- The four subsidiaries constituted the largest segment of the company, accounting for over 80% of the company’s total revenue for the year ended 31 March 2018 and more than 40% of the company’s total assets as of 31 March 2018.
