Jake's View | Tiger Asia: no trial, just tribulation
If a truly equitable compensation arrangement was virtually impossible in the Hontex case, how much more difficult is it over Tiger Asia?
The [Tiger Asia] case confirms the SFC has the right to sue overseas firms for compensation under section 213 of the Securities and Futures Ordinance without any need to first prove them guilty of insider dealing or other malpractices...
The commission first used the section last year, when 7,700 investors of sport fabric maker Hontex International got their money back after a court ordered the firm in June to pay HK$1.03 billion to small shareholders for misleading information in the prospectus.
Yes, I also find it a little wearisome to keep raising this Tiger Asia case, but when a regulatory agency, which we have ourselves set up, takes it on itself to undermine our civil liberties, well, let's be weary in a good cause.
First, however, let's review what happened in the Hontex case as the Securities and Futures Commission prides itself on this as its big success story in getting compensation for investors who have suffered from misdeeds in the market.
Hontex made false claims about turnover, earnings and cash holdings in its prospectus in 2009, for which the SFC had the stock suspended in March 2010, three months after trading had begun and after the price on the market had swung between HK$1.93 and K$2.63.