Hong Kong's SFC Publicly Censures BIT Mining Limited for Breaches of Takeovers Code

The Securities and Futures Commission (SFC) has publicly censured BIT Mining Limited (formerly known as 500.com Limited) for breaching the rules on special deals under the Code on Takeovers and Mergers (Takeovers Code).

On 28 January 2021, Loto Interactive Limited announced a proposed share subscription by BIT Mining which would trigger a mandatory general offer upon completion. During the offer period, BIT Mining issued 85,572,963 class A ordinary shares to Man San Law in February 2021, increasing his voting rights in BIT Mining from 3.78% to 19.9%. It subsequently issued 65,000 class A preference shares to Law in April 2021, which further increased his voting rights to 61.72%.

In both instances, the issue of shares to Law constituted special deals under Rule 25 of the Takeovers Code and they were completed without the consent of the Executive. Moreover, BIT Mining did not obtain advice from its professional advisers on the Takeovers Code implications of these deals. BIT Mining accepted that it had breached the Takeovers Code, apologised for the breaches and consented to the disciplinary action taken against it.

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The SFC reminds practitioners and parties who wish to take advantage of the securities markets in Hong Kong that they should conduct themselves in accordance with the Codes on Takeovers and Mergers and Share Buy-backs (Codes). This includes seeking professional advice as needed. Professional advisers should ensure that their clients understand and abide by the Codes. If there is any doubt about the application of the Codes, the Executive should be consulted at the earliest opportunity.