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Sanction Cases on Late Disclosure of Inside Information
by MMT

Written by: Ms. Melody Guo – Associate

Effective from 1 January 2013, the Securities and Futures Commission (“SFC”) imposed disclosure obligations on listed companies and its officers, which required them to disclose to the public, as soon as reasonably practicable, any inside information that has come to their knowledge as required by Securities and Futures Ordinance (Part XIVA). Since then, the Market Misconduct Tribunal (“MMT”) had concluded the first case of a breach of such disclosure requirements in November 2016. In this newsletter, we are going to discuss two of the cases on late disclosure of inside information.

Case of AcrossAsia Limited
AcrossAsia Limited (“AAL”), a GEM Board listed company of the Stock Exchange of Hong Kong Limited (“SEHK”), borrowed US$44 million from its subsidiary PT First Media Tbk (“First Media”), which is a telecommunication company listed on the Stock Exchange of Indonesia, in 2011. Due to its failure to recover the debt after several attempts including arbitration proceedings, First Media filed a petition under Indonesian Law against AAL regarding insolvency proceedings in late December 2012. The Indonesian Court then issued a summons to AAL on 28 December 2012. The Hong Kong office of AAL received the court documents in Bahasa Indonesian language on 2 January 2013. Two days later, the English translations were circulated among Chairman Albert Saychuan Cheok and Chief Executive Officer Vicente Binalhay Ang of AAL. However, disclosure of the incidences was only made until 17 January 2013 after the Indonesian court made the insolvency-related orders against AAL on 15 January 2013.

The MMT started investigation of the case after SFC’s commencement of proceedings in 2015. After considering all the evidence, the MMT concluded that AAL, Cheok and Ang were aware of the summons and petition which were likely to affect the stock price, but they failed to disclose such inside information to the public as soon as reasonably practicable.

MMT has announced the following orders:

  • AAL and Ang each was ordered to pay HK$600,000 for regulatory fine and 25% of the SFC and Government litigation costs
  • Cheok was ordered to pay a regulatory fine of HK$800,000 and 50% of the SFC and Government costs
  • Both Cheok and Ang were required to take a SFC-approved training program

Case of Yorkey Optical International (Cayman) Ltd.
Yorkey Optical International (Cayman) Ltd. (“Yorkey”), listed on the Main Board of the Stock Exchange of Hong Kong Limited, clearly expressed its expectation of significant growth and increasing profitability for the second half of 2012 in its 2012 unaudited interim results. However, it in fact sustained material losses with significant deterioration in its financial performance. The information was indicated in the internal management accounts and was known by Nagai Michio, Chief Executive Officer and Executive Director of Yorkey, and Ng Chi Ching, Financial Controller and Company Secretary of Yorkey, at latest by mid January 2013. However, disclosure was only made to the public until the publication of Yorkey’s audited annual results on 25 March 2013.

After investigation, it was found that Yorkey had delayed the disclosure for 13 weeks which caused investors to suffer a notional loss of about $1.5 million.

The MMT ordered:

  • Yorkey and Michio to pay a fine of $1 million each while Yorkey, Michio and Ng to pay the SFC’s investigation and legal costs and the MMT proceedings costs
  • Michio and Ng to be disqualified from being a director or being involved in the management of any listed corporation in Hong Kong for 18 and 15 months respectively, and to attend SFC-approved training program
  • Yorkey to appoint a SFC-approved independent professional adviser to review its procedures for compliance with the corporate disclosure regime

Based on the above cases, the SFC reminded all listing companies to disclose all inside information that has come to their knowledge as soon as reasonably practicable as timely disclosure of inside information is critical to maintain a fair and informed market.

AcrossAsia Limited
(Report, Market Misconduct Tribunal, 29 November 2016)

Yorkey Optical International (Cayman) Ltd
(Report, Market Misconduct Tribunal, 27 February 2017)

If there are any aspects which we may assist, please do not hesitate to contact:

Managing Partner - Mr. Roy Lo
roy.lo@shinewing.hk (Tel. 3583 8048) or

Senior Risk Manager - Ms. Gloria So
gloria.so@shinewing.hk (Tel. 3583 8517)


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