Hong Kong’s High Court has ordered both the ex-chairman and financial controller of a Hong Kong firm to be disqualified for failing to disclose price-sensitive information to the market regarding the company’s financial position in 2008.
The order was imposed on Andy Wong Shu Wing and Lee Chak To in relation to their employment with Sunlink International Holdings, which sells semiconductors, terminals and accessories for automobile tracking, among other things. Trading in Sunlink shares was suspended from December 2, 2008, to February 27 last year.
Both Wong and Lee accepted they failed to manage Sunlink with the necessary diligence and competence, and to ensure the company complied with disclosure requirements and gave shareholders information they might reasonably expect.
Hong Kong’s Securities and Futures Commission stated that Wong and Lee should have disclosed price-sensitive information in October and November 2008 concerning the depleted financial position of Sunlink.
This included mounting pressure from banks for the repayment of loans and the threat of legal proceedings against Sunlink and its subsidiaries for repayment; a winding up petition presented against Sunlink by a supplier for failure to pay trade debts; serious liquidity problems resulting from customers refusing to settle purchases as a result of product defects; labour strikes at Sunlink’s factory on the mainland; and the appointment of an independent financial adviser for debt restructuring.
Mark Steward, the commission’s executive director of enforcement, stressed: “Listed company directors know they have a duty to ensure the company keeps the market properly informed.
“Investors need timely information about material issues so they can make better investment decisions. These are serious failures. Equal access to material information is one of the cornerstones of a vital, modern, efficient and fair market.”
Effective from April 10 this year, Wong will be disqualified for five years and Lee for three-and-a-half from being a director, liquidator, receiver or manager of any listed corporation in Hong Kong, or any subsidiaries and affiliates; and from taking part in the management of any listed corporation in the city, or any subsidiaries and affiliates.
Sunlink was listed on the main board of the Hong Kong stock exchange in March 2003.