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Market Misconduct Tribunal sanctions China Medical & HealthCare Group Limited and its directors for late disclosure of inside information

Issue date: 2021-05-12 16:30:00

The Market Misconduct Tribunal (MMT) has fined China Medical & HealthCare Group Limited, formerly known as COL Capital Limited (COL), and six of its former and current directors a total of $4.2 million for failing to disclose inside information as soon as reasonably practicable following proceedings brought by the Securities and Futures Commission (SFC) (Notes 1 to 4).

Among the sanctioned directors, Mr Wong Peng Chong, former executive director, and Mr Kong Muk Yin, current executive director, were disqualified from being a listed company director by the MMT for eight and six months, respectively (Note 5).

The rest of the sanctioned directors are: Ms Chong Sok Un, executive director and former chairman, Mr Zhang Jian, independent non-executive director, Mr Ma Wah Yan and Mr Lau Siu Ki, both former independent non-executive directors.

COL and the six sanctioned directors admitted that the information relating to the profits made from COL’s position in ChinaVision Media Group Limited (ChinaVision), now known as Alibaba Pictures Group Limited, the overall profit figures for March 2014 and the profit for the nine months ended March 2014, as well as significant gains from COL’s investment trading in the shares of ChinaVision, came to their knowledge in April 2014.  However, the information was not made public until 10 September 2014 when a positive profit alert was published in relation to the company’s financial performance for the year ended 30 June 2014 (Note 6).

The six former and current directors also admitted that their negligent conduct had resulted in COL’s breach of the requirements of the corporate disclosure regime.

The MMT further ordered that:

• COL and the six former and current directors to pay the SFC’s investigation and legal costs, as well as the costs of the MMT proceedings; and
• they attend an SFC-approved training programme on the corporate disclosure regime, directors’ duties and corporate governance.

End

Notes:

1. The proceedings were brought by the SFC under section 307I of the Securities and Futures Ordinance against COL and the six directors.
2. Listed corporations are required by the law to disclose inside information that has come to their knowledge as soon as reasonably practicable.  Timely disclosure of inside information is central to the orderly operation of the market and underpins the maintenance of a fair and informed market.
3. COL was listed on the Main Board of The Stock Exchange of Hong Kong Limited on 1 August 1991 and its name was changed to China Medical & HealthCare Group Limited on 29 February 2016.
4. Wong was fined $900,000; COL, Chong and Kong were each fined $800,000; Zhang, Ma and Lau were each fined $300,000.
5. Wong was an executive director of COL at the material times.  He was re-designated as a non-executive director of COL on 1 September 2018.
6. Please see the SFC’s press release dated 31 October 2019.

Source: SFC