The Court of First Instance today ordered Tiger Asia Management (Tiger Asia) and two of its senior officers, Mr Bill Sung Kook Hwang and Mr Raymond Park (collectively the Tiger Asia parties), to pay US$45,266,610 to investors affected by their insider dealing involving two Hong Kong-listed banking stocks.
The court orders followed admissions by the Tiger Asia parties in a statement of agreed and admitted facts filed in the Court of First Instance by the Securities and Futures Commission (SFC) in its proceedings under section 213 of the Securities and Futures Ordinance (SFO) that they contravened Hong Kong’s laws prohibiting insider dealing when dealing in the shares of Bank of China Limited (BOC) and of China Construction Bank Corporation (CCB) in December 2008 and January 2009 and manipulated the price of CCB shares in January 2009.
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The Tiger Asia parties have also made the same admissions of insider dealing and manipulation in proceedings commenced by the SFC in the Market Misconduct Tribunal (MMT). The SFC has indicated to the MMT that it will be seeking a cease and desist order as well as an order prohibiting the Tiger Asia parties from dealing in Hong Kong without leave of the court for up to five years.
Mark Steward, executive director of Enforcement, SFC, said: "Tiger Asia’s admissions of insider dealing and manipulation vindicate the SFC’s allegations made at the outset of these proceedings. Investors are unable to detect, or avoid transacting with, wrongdoers in the market and so they are highly vulnerable to this kind of misconduct. It is right and fair that these transactions should be rescinded so that the 1,800 innocent investors may be put back, as closely as possible, to the positions they were in before the transactions took place."
Today’s court orders, which were made by consent by the Honourable Mr Justice Harris under section 213(2)(b) of the SFO, will return a total of US$45,266,610 (the restoration amount) to around 1,800 investors in Hong Kong and overseas who traded with Tiger Asia in the insider dealing transactions.
To facilitate the return of money to the affected investors, the Tiger Asia parties have already paid US$45,266,610 into court.
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By GlobalDataThe restoration amount represents the difference between the actual price of BOC and CCB shares sold by Tiger Asia and the value of those shares taking into account the inside information known to Tiger Asia (as assessed by expert evidence).
The orders include the appointment of Mr John Robert Lees and Mr Kok Wing Chong of JLA Asia as independent administrators to take charge of the distribution of the restoration amount to the counterparties to Tiger Asia’s insider dealing.
At a directions hearing held yesterday, the MMT fixed three days starting on 7 May 2014 to hear submissions as to what orders, if any, ought to be made against the Tiger Asia parties.
Steward added: "The SFC looks forward to making further submissions to the MMT on appropriate orders to deter misconduct and to protect the integrity of Hong Kong’s market."
The SFC appreciates the assistance of the UK Financial Conduct Authority and the US Securities and Exchange Commission in this case.
