TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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High Court makes landmark ruling backing SFC after company was found to have put misleading information in its HK listing prospectus in 2009
Enoch Yiu
21 June 2012
A Hong Kong-listed company has been ordered to pay back more than HK$1 billion to investors after a landmark decision in the High Court.
The ruling came after sports fabric maker Hontex International Holdings used misleading information in its listing prospectus in 2009.
It is the first time the Securities and Futures Commission has used section 213 of the Securities and Futures Ordinance to seek compensation for investors left out of pocket because of market misconduct.
The SFC said Hontex’s prospectus overstated turnover and profit before tax in the three years up to its listing on Christmas Eve 2009.
In March 2010, the markets watchdog ordered Hontex to suspend trading - meaning that the company traded for just 64 days in Hong Kong after its local offering.
The SFC said: “Hontex does not agree the extent of the overstatements alleged by the SFC because it cannot verify the true position.
“Nonetheless it has accepted that these figures in the IPO prospectus were materially false.”
High Court Judge Jonathan Harris yesterday granted the order for Hontex to make a repurchase offer to 7,700 investors who subscribed for the company’s shares in its initial public offering (IPO) or who purchased them after its listing.
The company’s total repurchase will come to HK$1.03 billion, or HK$2.06 per share. That is the level it reached before it was suspended from trading and is higher than the HK$1 billion raised in the IPO.
Hontex will also have to pay a further HK$197.76 million to the court within 28 days, adding to the HK$832.24 million already frozen by the court under interim orders. The company will host a shareholders meeting to vote for the repurchase scheme while the controlling shareholders will abstain from voting.
The court order followed more than a year of legal tussling between the SFC and Hontex.
The arguments centred on whether the commission could seek a court order for Hontex to pay compensation before any court or tribunal had first made a ruling on its misconduct.
SFC chief executive Ashley Alder said the ruling represented “an important milestone in the SFC’s efforts to protect the investing public from the consequences of wrongdoing”.
The SFC and Hontex finally signed a statement of fact yesterday, enabling the court to grant the compensation order.
In the agreement, Hontex acknowledged it was reckless in allowing materially false and misleading information in its prospectus, contravening section 298 of the Securities and Futures Ordinance.
Section 298 bans anyone from give misleading information to induce other people to buy shares.
In admitting a contravention of section 298, neither Hontex nor its directors are admitting any criminal contravention of this provision.
However, the SFC said yesterday’s agreement did not prevent it from taking criminal proceedings against Hontex over the misleading information in the IPO.