Hong Kong's Securities And Futures Commission Commences MMT Proceedings Against Former Senior Executive Of ENN Energy Over Alleged Insider Dealing

The Securities and Futures Commission (SFC) has commenced proceedings in the Market Misconduct Tribunal (MMT) against Mr Cheng Chak Ngok, former executive director, chief financial officer and company secretary of ENN Energy Holdings Limited (ENN Energy), over alleged insider dealing in the shares of China Gas Holdings Limited (China Gas) (Notes 1, 2 & 3).

On 12 December 2011, ENN Energy and China Petroleum & Chemical Corporation issued a joint Pre-Conditional Voluntary General Offer (PVGO) announcement regarding their offer to acquire all of the outstanding shares of China Gas at $3.50, representing a premium of 25 per cent to the previous closing price of China Gas’ shares. 

The SFC alleges that Cheng, who was aware of the details of the PVGO since mid-November 2011, purchased China Gas’ shares via a nominee account between mid-November 2011 and early December 2011. The shares were sold shortly after the announcement was made at a profit of around $3 million.

The SFC also alleges Cheng was aware that the details of the PVGO was information material to the share price of China Gas and was not publicly known before the issue of the announcement.

Notes:

1. ENN Energy has been listed on the Main Board of The Stock Exchange of Hong Kong Limited (SEHK) since June 2002.
2. Cheng tendered his resignation from his positions with effect from 28 September 2012.
3. China Gas has been listed on the Main Board of SEHK since October 1995. 
4. The Notice to the MMT which contains the statement setting out the grounds for commencing the MMT proceedings is available on the MMT’s website (www.mmt.gov.hk).