The Securities and Futures Commission (SFC) is taking legal action against eight individuals, including seven former members of the board of directors and the former chief financial controller of China Candy Holdings Limited, for allegedly overstating the company’s financial strength in their 2016 interim and annual reports. According to the SFC’s investigation, the company’s cash and bank balances were overstated by 87% and 97% as of 30 June 2016 and 31 December 2016, respectively. The accused individuals are alleged to have created falsified bank and accounting records to cover up the overstatement. The SFC claims that Xu, Hong, and Wang were the instigators and perpetrators of the fraudulent scheme, while the remaining former directors were negligent and/or breached their duties to act in the company’s best interest. The SFC has initiated legal proceedings under section 214 of the Securities and Futures Ordinance in the Court of First Instance to seek disqualification orders against the eight respondents.
The eight respondents are:
- Mr Xu Jinpei, former chairman and executive director;
- Ms Hong Yinzhi, former chief executive officer and executive director;
- Ms Li Yuna and Ms Yvonne Hung, former executive directors;
- Mr Nicholas Chiu Sai Chuen, Mr Fangus Chu Wai Wa and Mr Ong King Keung, former independent non-executive directors; and
- Mr Wang Zhihong, former chief financial controller
resource: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=23PR36