Hong Kong SFC Obtains 10-Year Disqualification & $280,000 Compensation Orders Against Ex-Chairman & Executive Director Tse On Kin of Kong Sun Holdings & China Sandi Holdings for Making Secret Profit from Share Placement By Using Nominee Company & Providing Misleading Information to Hong Kong Exchange & Placement Agent in 2009, Generated $280,000 Profit from Kong Sun and $258,000 Loss in China Sandi
16th November 2023 | Hong Kong
The Hong Kong Securities & Futures Commission (SFC) has obtained 10-year disqualification and $280,000 compensation orders (Hong Kong Court) against the former Chairman & Executive Director (Tse On Kin) of Kong Sun Holdings & China Sandi Holdings for making profit from share placement by using nominee company & providing misleading information to Hong Kong Exchange & placement agent in 2009, generating $280,000 profit from Kong Sun and $258,000 loss in China Sandi. Hong Kong SFC: “Tse was disqualified for 10 years from being, or continuing to be, a director, liquidator, receiver or manager of the property or business of any corporation in Hong Kong including Kong Sun, China Sandi or any of their subsidiaries and affiliates and in any way, directly or indirectly, being concerned, or taking part, in the management of any corporation in Hong Kong, without the leave of the Court (Note 5). He was ordered to pay Kong Sun HKD 2,185,784.1, being the profit that he made in breach of his fiduciary duty owed to Kong Sun, and to pay the SFC’s costs in the proceedings. The SFC’s investigation revealed that Tse orchestrated a fraudulent scheme to use a nominee company to apply – purportedly as an independent placee – for 100 million and 19 million shares placed by Kong Sun in or around June 2009 and China Sandi in or around November 2009 respectively, with the intent of making a secret personal profit out of the share placements. To this end, he instructed, directed, procured and permitted the nominee company to make false and misleading representations to the placing agent to secure the share allotment. He also brought about false and misleading declarations by Kong Sun and China Sandi to the SEHK to induce the latter to grant approval to their applications for the listing of and permission to deal in the said placing shares. Tse further brought about false announcements by both companies to the public with respect to the compliance of the independent placees requirements under the Rules Governing the Listing of Securities on the SEHK. After being allotted the shares of Kong Sun, the nominee company disposed of all the said shares on the open market between 22 June 2009 and 13 July 2009 and made a profit of around HKD 2,185,784.1. The nominee company also disposed of all the allotted China Sandi shares on 18 May 2010 at a loss of around HKD 201,185.29.” More info below:
” Hong Kong SFC Obtains 10-Year Disqualification & $280,000 Compensation Orders Against Ex-Chairman & Executive Director Tse On Kin of Kong Sun Holdings & China Sandi Holdings for Making Secret Profit from Share Placement By Using Nominee Company & Providing Misleading Information to Hong Kong Exchange & Placement Agent in 2009, Generated $280,000 Profit from Kong Sun and $258,000 Loss in China Sandi “
Hong Kong SFC Obtains 10-Year Disqualification & $280,000 Compensation Orders Against Ex-Chairman & Executive Director Tse On Kin of Kong Sun Holdings & China Sandi Holdings for Making Secret Profit from Share Placement
15th Nov 2023 – The Securities and Futures Commission (SFC) has obtained disqualification and compensation orders in the Court of First Instance against former chairman and executive director of Kong Sun Holdings Limited (Kong Sun) and China Sandi Holdings Limited (China Sandi), Mr Tse On Kin, who admitted that he fraudulently obtained a secret profit out of the Kong Sun share placement and shares of China Sandi at a discounted price in a placement (Notes 1 to 4).
Tse was disqualified for 10 years from being, or continuing to be, a director, liquidator, receiver or manager of the property or business of any corporation in Hong Kong including Kong Sun, China Sandi or any of their subsidiaries and affiliates and in any way, directly or indirectly, being concerned, or taking part, in the management of any corporation in Hong Kong, without the leave of the Court (Note 5). He was ordered to pay Kong Sun HKD 2,185,784.1, being the profit that he made in breach of his fiduciary duty owed to Kong Sun, and to pay the SFC’s costs in the proceedings.
The SFC’s investigation revealed that Tse orchestrated a fraudulent scheme to use a nominee company to apply – purportedly as an independent placee – for 100 million and 19 million shares placed by Kong Sun in or around June 2009 and China Sandi in or around November 2009 respectively, with the intent of making a secret personal profit out of the share placements.
To this end, he instructed, directed, procured and permitted the nominee company to make false and misleading representations to the placing agent to secure the share allotment. He also brought about false and misleading declarations by Kong Sun and China Sandi to the SEHK to induce the latter to grant approval to their applications for the listing of and permission to deal in the said placing shares. Tse further brought about false announcements by both companies to the public with respect to the compliance of the independent placees requirements under the Rules Governing the Listing of Securities on the SEHK. After being allotted the shares of Kong Sun, the nominee company disposed of all the said shares on the open market between 22 June 2009 and 13 July 2009 and made a profit of around HKD 2,185,784.1. The nominee company also disposed of all the allotted China Sandi shares on 18 May 2010 at a loss of around HKD 201,185.29. The orders of the Court were made after Tse admitted that he had conducted the business or affairs of each of Kong Sun and China Sandi in a manner involving defalcation, fraud, misfeasance towards each of Kong Sun and China Sandi or their members or a part of their members, and resulting in their members or a part of their members not having been given all information with respect to their business and/or affairs that they might.
Notes:
- Kong Sun and China Sandi (named as China Grand Forestry Green Resources Group Limited at the relevant time) are listed on the Stock Exchange of Hong Kong Limited (SEHK).
- Please see the SFC’s press release dated 13 February 2017.
- Under section 214 of the Securities and Futures Ordinance, the court may, among 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 judgment is available on the Judiciary’s website (Court No.: HCMP 210/2017).
- Four private companies, Gold Mind (H.K.) Limited, Silver Union Asia Limited, Pharaoh Fortune Limited and Treasure Spring Investments Limited, are exempted from the disqualification orders made against Tse.
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