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The Securities and Futures Commission (SFC) has commenced proceedings in the Market Misconduct Tribunal (MMT) against CMBC Capital Holdings Limited (CMBC Capital) for failing to disclose inside information as soon as reasonably practicable.
CMBC Capital was known as Mission Capital Holdings Limited (Mission Capital) when the alleged breach of the statutory corporate disclosure requirements occurred (Note 1).
The SFC has also commenced proceedings in the MMT against six former directors of Mission Capital for their reckless or negligent conduct causing 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 found that on 13 October 2014, the Directors received through email the unaudited consolidated management accounts of Mission Capital for the five months ended 31 August 2014 (August Management Accounts). The August Management Accounts revealed that Mission Capital made a cumulative profit for the five months ended 31 August 2014 of $838 million, representing a significant improvement in financial performance against an interim loss of $12 million for the six months ended 30 September 2013 and an annual profit of $417 million for the 12 months ended 31 March 2014.
The improvement in financial performance was not made public until 7 November 2014 when Mission Capital issued a profit alert announcement in relation to its financial performance for the six months ended 30 September 2014.
The SFC alleges that the information relating to the financial performance of Mission Capital for the first five months ended 31 August 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 13 October 2014.
Notes:
- Mission Capital was listed on the Main Board of The Stock Exchange of Hong Kong Limited on 12 March 1998.
- A copy of the SFC’s Notice commencing the MMT proceedings is available on the MMT’s website (www.mmt.gov.hk).
