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The AMF Enforcement Committee fines Forever Winner International Development Ltd, its Managing Director and another person for insider dealing


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In its decision of 28 February 2020, the Enforcement Committee imposed fines on Forever Winner International Development Ltd and Mr Guoliang Yao, its Managing Director, of €800,000 and €1 million respectively. It also fined Ms Yan Lin €600,000.

The regulatory breaches referred to the Committee were all related to the takeover bid in April 2013, made by Fosun and AXA Private Equity on Club Med shares.

The Committee considered that the information relating to this takeover bid was inside information on 10 April 2013 at the latest. Indeed, on that date, the operation had been defined precisely enough by the parties to have a reasonable chance of success. Furthermore, the information was not public because the takeover bid was announced to the public on 27 May 2013. Lastly, it was likely to have a significant effect on the price of Club Med’s shares.

The Committee then considered that Ms Lin, who was at the time of the facts, vice-president and financial director of the Chinese financial services company Tebon Securities Co Ltd, a subsidiary of the Fosun group, had acquired Club Med shares in disregard of her obligation to refrain from using inside information. The Committee held the same breach against Forever Winner International Development Ltd and Mr Yao, the latter had acquired Club Med shares on behalf of the company and on his personal account.

In support of these allegations, the Committee considered that only the possession of the said inside information could explain the acquisitions of Club Med shares made by the interested parties, on the basis of a number of indicators  relating to the atypical nature of the acquisitions in relation to the investment habits of the respondents, the professional links between them which might reveal a plausible channel for the transmission of information, the timing of the disputed transactions and the unconvincing explanations given to justify the said investments.

The Committee set the fine based, in particular, on the amount of capital gains made during the sale of the securities after the announcement of the takeover bid – €285,995 for the company, €323,941 for Mr. Yao and €196,095 for Ms Lin -, and the lack of cooperation of the respondents who failed to appear before the rapporteur and the Enforcement Committee.

An appeal may be lodged against this decision.

About the Enforcement Committee

The Enforcement Committee, which is made up of judges and professionals, has total freedom to make decisions. It can impose sanctions on any person or company whose practices contravene laws and regulations that fall within the jurisdiction of the AMF. It ratifies settlement agreements signed by the Secretary General and respondents. And it takes part in the AMF’s educational efforts by clarifying financial regulations when explaining its decisions.

Regulator Information

Regulator Name: Financial Markets Authority
Abbreviation: AMF
Jurisdiction: France

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