The SFC has commenced legal proceedings under section 214 of the SFO against the former chairman and directors of Inno-Tech Holdings Limited (Inno-Tech), a company listed on the GEM (Growth Enterprise Market) Board, over alleged misconduct that caused the company to lose more than HK$125 million.
The SFC alleged that Inno-Tech’s former chairman and director, Ms Wong Yuen Yee, and three former directors, namely Mr Robert Wong Yao Wing, Mr Wong Kwok Sing and Mr Lam Shiu San, had breached their duties as directors in relation to the acquisitions and/or disposals of interests in three hotels and a gold mine on the Mainland between 2007 and 2010 resulting in substantial and material losses to Inno-Tech.
Specifically, the SFC alleged that the four former directors had failed to:
- carry out an adequate investigation into or due diligence prior to the acquisitions of the interests in the three hotels and the gold mine;
- negotiate the consideration for acquiring the interests in the three hotels and the gold mine;
- assess or obtain any independent assessment of whether an investment in the gold mine was a commercially suitable or an appropriate one for Inno-Tech;
- properly assess the purchase price of the interests in the gold mine;
- give adequate consideration to who would be appropriate to appoint as directors and/or who to put in charge in respect of gold mining matters; and
- properly supervise the running of the gold mine.
The SFC sought court orders that the four former directors be disqualified as company directors and that Inno-Tech bring proceedings against them for compensation or, alternatively, that the four directors be ordered to pay compensation to Inno-Tech directly.
A copy of the SFC’s summary of material events and allegations can be downloaded from the link below: