The Securities and Futures Commission (SFC) has commenced legal proceedings in the Court of First Instance to seek disqualification orders against 10 former and current directors of Freeman FinTech Corporation Limited (Freeman), including managing director, Mr. Quincy Hui Kwong Hei, and former non-executive director, Mr Andrew Liu, for breaching their director duties in Freeman’s acquisition and disposal of a stake in Liu’s Holdings Limited (Liu’s Holdings) (Notes 1 to 5).
The SFC also alleges that, as a consequence, Hui and Liu caused Freeman to suffer loss and damage. The SFC is seeking a court order that Hui and Liu pay $76,812,543.58 as compensation to Freeman.
The other eight former and current Freeman directors involved in the legal proceedings are: Mr Lo Kan Sun, Ms Sue Au Shuk Yee, Mr Philip Suen Yick Lun, Mr Scott Allen Phillips, Mr Agustin V Que, Mr Roger Thomas Best, Mr Gary Drew Douglas, and Mr Peter Temple Whitelam.
The SFC’s action follows its investigation into the acquisition in January 2011 (Acquisition) and subsequent disposal in July 2011 (Disposal) of a 24.43% interest in Liu’s Holdings by Ambition Union Limited (Ambition), a subsidiary of Freeman, which caused a loss of $76,812,543.58 to Freeman/Ambition.
The SFC alleges that Liu and Hui caused Freeman to indirectly buy a stake in Liu’s Holdings in disregard of the ability of other Liu family members to object to the purchase. The other Liu family members did object and Freeman could not complete the acquisition and sold the interest back at a loss.
Specifically, the SFC alleges that the 10 directors have:
Furthermore, Liu failed to disclose to Freeman and its shareholders that the Acquisition was opposed by some shareholders of Liu’s Holdings and the Disposal was motivated by self-interest and/or the interest of his parents, rather than the interest of Freeman.
Hui was responsible for discussing and liaising with Liu for the Acquisition and Disposal. He failed to make full and proper inquiries with Liu as to the stance of the other shareholders of Liu’s Holdings before procuring Freeman’s shareholders to approve the Acquisition.
The first hearing of the petition filed by the SFC under section 214 of the Securities and Future Ordinance (SFO) will be heard in the Court of First Instance on 24 February 2017.
Source: Mondo Visione