The Securities and Futures Commission (SFC) has publicly criticised Kwok Tse Wah for breaching the dealing restrictions and dealing disclosure obligations under the Takeovers Code (Note 1).
On 5 December 2018, Hopewell Holdings Limited (Hopewell) and the offeror made a joint announcement about the possible privatisation of Hopewell. Kwok is the father of an individual who is a director and one of the ultimate beneficial owners of the offeror. He is therefore a party acting in concert with the offeror in the proposed privatisation (Note 2).
On 6 December 2018, Kwok sold 40,000 shares in Hopewell. The sale and the failure to disclose it publicly within the applicable time limit constituted breaches of Rule 21.2 and Rule 22 of the Takeovers Code (Note 3).
Kwok has accepted that he breached the Takeovers Code and has agreed to the disciplinary action taken against him.
The SFC wishes to take this opportunity to remind practitioners and parties who wish to take advantage of the securities markets in Hong Kong that they should conduct themselves in matters relating to takeovers, mergers and share buy-backs in accordance with the Codes. If there is any doubt about the application of the Takeovers Code, the Executive (Note 4) should be consulted at the earliest opportunity.
A copy of the Executive's Statement can be found in the "Executive decisions and statements" section of the SFC website.
Notes:
- The Code on Takeovers and Mergers.
- An offer period commenced for Hopewell on 4 December 2018 when Hopewell first announced a proposed privatisation.
- Rule 21.2 of the Takeovers Code requires that during an offer period, the offeror and persons acting in concert with it must not sell any securities in the offeree company without the prior consent of the Executive. Rule 22.1(a) provides that "[d]ealings in relevant securities by an offeror or the offeree company, and by any associates of either of them, for their own account during an offer period must be publicly disclosed in accordance with Notes 5, 6 and 7 to this Rule 22."
- The Executive Director of the SFC's Corporate Finance Division or his delegate.
