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The Court of First Instance (CFI) has granted orders sought by the Securities and Futures Commission (SFC) in its proceedings against Qunxing Paper Holdings Company Limited (Qunxing), its former chairman and vice-chairman – Mr Zhu Yu Guo and his son, Mr Zhu Mo Qun – as well as its subsidiary Best Known Group Limited, (collectively the defendants) to compensate investors who subscribed for Qunxing shares in its initial public offering or purchased them in the secondary market between 2007 and 2011.
The court also ordered that payments be made to Victory Asset Management Limited, which subscribed for 206,560,000 unlisted warrants of Qunxing in January 2011 (Notes 1 to 3).
The court found that the defendants had disclosed false or misleading information in Qunxing’s IPO Prospectus in 2007 as well as its results announcements for the financial years ended on 31 December 2007 to 31 December 2011 by materially overstating its turnover and understating its bank borrowings.
The SFC commenced its proceedings at the end of 2013. The case was heard between May and August 2017 (Note 4).
Notes:
- The total sum of payments to be made under the orders is $1.42 billion. The SFC has to date located about $112 million held by the defendants in Hong Kong.
- About 27,000 shareholders who are entitled to compensation are those who were holding Qunxing shares in form of physical scrip with Tricor or electronically with CCASS or via banks and/or brokerage firms in Hong Kong as at 26 August 2013 when Qunxing issued its interim results announcement for the six months ended 30 June 2013.
- The payment of compensation will be managed by administrators appointed by the CFI. Investors may contact the administrator, Mr Bruno Arboit of Zolfo Cooper, on its hotline at 3468 5424.
- Please see SFC’s press releases dated 20 December 2013, 23 January 2014, 31 March 2014 and 4 April 2014.
