Hong Kong: CMBC Capital, Directors Penalised for Late Disclosure

​​CMBC Capital did not make information about significant improvement in the company's financial performance public in a timely manner.

Hong Kong's Market Misconduct Tribunal has found that CMBC Capital Holdings and six of its former directors failed to disclose inside information as soon as reasonably practicable under the Securities and Futures Ordinance.

CMBC Capital is an investment holding company principally engaged in the provision of brokerage and related services, and investments in various business sectors, servicing clients in Hong Kong and mainland China.

In proceedings initiated by the SFC (Securities and Futures Commission) in December 2018, CMBC Capital and the six former directors admitted that the information about significant improvement in the company's financial performance for the five months ended 31 August 2014 came to their knowledge on or around 13 October 2014.

However, such information was not made public until 7 November 2014 when a positive profit alert was published in relation to the company's financial performance for the six months ended 30 September 2014.

In the proceedings, former Chief Executive Officer and Company Secretary Philip Suen Yick Lun and former chairman Paul Suen Cho Hung admitted that their negligent conduct resulted in CMBC Capital's breach of the requirements of the corporate disclosure regime.

A 15-month disqualification order has been imposed against Philip Suen, along with a HKD 1.2 million fine. Paul Suen was also fined HKD 900,000.

The remaining four former directors involved in the case at the material time are former Executive Director Lau King Hang and three former Independent Non-Executive Directors, Huang Zhencheng, Weng Yixiang and Wong Kwok Tai.

CMBC Capital and the six former directors are ordered to pay the SFC's investigation and legal costs, as well as the costs of the Tribunal's proceedings.

The six former directors to attend an SFC-approved training programme on the corporate disclosure regime, directors' duties and corporate governance.