The Securities and Futures Commission (SFC) in Hong Kong has recently sought disqualification orders against listed company directors in a number of court actions commenced in the past few months. The proceedings against the directors have been brought under section 214 of the Securities and Futures Ordinance. If successful, the court has the power to disqualify the relevant directors from being directors or from being involved, directly or indirectly, in the management of any corporation for up to 15 years. The SFC is also seeking compensation orders from certain directors in some cases.
There have also been a number of regulatory developments emphasising the role of boards of directors and senior management. These, together with the recent enforcement actions, highlight the increased focus on directors. In light of this, all directors, including non-executive directors, must ensure that they fully understand the regulatory framework and are able to properly discharge their responsibilities.
Our bulletin discussing the above issues can be found here.