The Securities and Futures Commission (SFC) has obtained a disqualification order in the Court of First Instance against Mr Duncan Chiu, former managing director and chief executive officer of Far East Holdings International Limited (Far East) (Notes 1 to 4).
In the same proceedings, the SFC obtained a disqualification order against Mr Michael Lui Hung Kwong, a former company secretary and financial controller of Far East and discontinued its action against Duncan Chiu’s brother Mr Derek Chiu, a former non-executive director of Far East.
The Court ordered that Duncan Chiu and Lui be disqualified from being a director, or being directly or indirectly involved in the management of Far East or any corporation in Hong Kong for four years and three years, respectively (Notes 5 to 6).
The orders were made after they admitted the following misconduct: (i) the transfers of a total of $61 million to the personal bank accounts of the then chairman Mr Deacon Chiu Te Ken, the late father of Duncan Chiu and Derek Chiu, without proper authorization of Far East’s board of directors; (ii) the lack of any agreement on the apportionment of investments and profits or losses between Far East and its chairman; and (iii) the failure to return the unused monies to Far East in a timely manner.
Duncan Chiu also admitted that he had made a false and/or misleading disclosure of the $61 million as an “amount due from a director”.
The Court found that Far East’s business or affairs had been conducted in a manner involving other misconduct under section 214 of the SFO, resulting in Far East’s shareholders not having been given all the information as they might reasonably expect.
The SFC’s action follows an investigation into Far East’s transfers of a sum of $61 million in 2007 from Far East’s bank accounts to the personal account of the company’s chairman purportedly for the subscription of initial public offering shares on behalf of Far East (Note 7).
Notes:
- Far East, formerly known as Cheong Sun Development Company Limited, was listed on the Main Board of the Stock Exchange of Hong Kong Limited on 12 February 1973. It was known as Far East Technology International Limited before it changed to its present name on 27 February 2007. Far East was and is principally engaged in the business of securities investment and trading, property development and investment, and manufacturing and sale of garments.
- The legal proceedings were commenced under section 214 of the Securities and Futures Ordinance (SFO).
- Under section 214 of the SFO, the court may, inter alia, 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 up to 15 years, if the person is found to be wholly or partly responsible for the company’s business or affairs having been conducted in a manner, amongst other, involving defalcation, fraud, misfeasance or other misconduct towards it or its members.
- The orders were made following the Court’s approval that the proceedings could be disposed of by way of Carecraft procedure where the Court determines the appropriate orders to be made based on an agreed statement of facts and agreed proposed orders.
- Duncan Chiu is disqualified from being a director, or being directly or indirectly involved in the management of Far East or any corporation in Hong Kong for four years, except Hong Kong Information Technology Joint Council Limited, Innovate for Future Limited, Hong Kong Cyberport Management Company Limited, Hong Kong Squash, Hospital Authority Board and Lai Yuen Company Limited.
- The judgment is available on the Judiciary’s website (Case No.: HCMP 458 / 2018).
- Please see the SFC’s press release dated 10 April 2018.
This news item was originally published by the Securities and Futures Commission (SFC HK). For more information, see the Source Link.
