繁

SFC obtains disqualification orders against former directors of Luxey International (Holdings) Limited

Issue date: 2023-05-24 16:47:18

The Securities and Futures Commission (SFC) has obtained disqualification orders in the Court of First Instance against two former directors of Luxey International (Holdings) Limited (Luxey) for their misconduct involving a corporate acquisition (Note 1).

The two former directors, Mr Joseph Lau Chi Yuen and Mr Chung Man Wai, were disqualified for eight years and five years respectively, without leave of the Court, from (i) being, or continuing to be, a director, liquidator, or receiver or manager of the property or business of any listed or unlisted company in Hong Kong; or (ii) in any event, whether directly or indirectly, be concerned, or taking part, in the management of any listed or unlisted company in Hong Kong.

They were also ordered to pay the SFC’s costs in the proceedings.

The Court found that Lau and Chung were responsible for Luxey’s business or affairs having been conducted in a manner involving defalcation, fraud, misfeasance or other misconduct that was unfairly prejudicial to Luxey’s members, resulting in them not having been given all the information with respect to Luxey’s business or affairs that they might reasonably expect (Notes 2 & 3).

The SFC’s action follows an investigation into Luxey’s very substantial acquisition of Easy Time Trading Limited (Easy Time) which held a 99% stake in Ratio Knitting Factory Limited (Ratio) at the time of the acquisition on 31 March 2011.

The SFC’s investigation found that Lau had utilised nominees to acquire Ratio for $50.1 million before it was effectively resold to Luxey for $390 million and concealed his secret profit and/or material interest in these transactions.  As a result, Luxey was deprived of the opportunity to acquire Easy Time or Ratio at a price substantially lower than the consideration of $390 million.

As for Chung, he had failed to make sufficient enquiries about the relationships among Lau and his nominees and to take steps to prevent Luxey from acquiring Easy Time at a substantially higher price (Note 4).

End

Notes:

1. Luxey was listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited on 7 July 2000.  It was known as Intcera Inc. before it was listed.  It changed its name to Intcera High Tech Group Limited on 2 June 2000 and then to China Post E-Commerce (Holdings) Limited on 29 April 2009 before changing to its current name on 22 December 2011.  Luxey is principally engaged in the manufacture and sale of apparel.
2. Under section 214 of the Securities and Futures Ordinance, the Court of First Instance may make orders disqualifying a person from being a company director or being involved, directly or indirectly, in the management of any corporation for up to 15 years, if the person is found to be wholly or partly responsible for the company’s affairs having been conducted in a manner, amongst other, involving defalcation, fraud, misfeasance or other misconduct towards it or its members.
3. The judgment is available on the Judiciary’s website (Court Reference: HCMP 239/2019).
4. Please see the SFC’s press release dated 7 March 2019.

Source: SFC