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Insider Dealing Tribunal to safeguard interests of investors
Following is a question by the Hon Emily Lau Wai-hing and a written reply by the Secretary for Financial Services, Mr Rafael Hui, in the Legislative Council today (Wednesday):
Question:
It is learnt that the Insider Dealing Tribunal has recently ordered a chairman of a company identified as an insider dealer not to be a director of a listed company for one year, but the ban will not take effect until December 1997. The Insider Dealing Tribunal has also ordered him to pay a fine of $1.46 million and imposed an added penalty of $1.7 million. It is also learnt that the person concerned has resigned from the chairmanship of the company with effect from 1 December last year and has appointed his wife to replace him as the company's chairman, but he would continue to render his expertise and experience to the company. In this connection, will the Administration inform this Council of the measures which will be taken by the authorities concerned to safeguard the interests of investors should similar incidents occur in the future?
Answer:
We believe that the question is in relation to a recent case dealt with by the Insider Dealing Tribunal which ordered, inter alia, that
(a)
(b)
a chairman (the person concerned) of a listed company identified as an insider dealer shall not for a period of one year from 1 December 1996 without leave of the High Court be a director or a liquidator or a receiver or manager of the property of any listed company or the subsidiaries of any listed company or in any way, whether directly or indirectly be concerned in, or take part in the management of any listed company or its subsidiaries; and
penalties of $3.16 million (i.e. $1.46 million, being the full amount of the loss avoided plus $1.7 million, being the penalty) be imposed against the person concerned.
Any person who is subject to a prohibition order and who participates in any way in the affairs of a company to which the prohibition applies should take care that his participation is not in breach of the scope of the prohibition. Under section 30 of the Securities (Insider Dealing) Ordinance (Cap. 395), contravention of a prohibition order is a criminal offence, punishable by fines and imprisonment.