Insider dealing panel flouted right to silence
The Insider Dealing Tribunal's practice of forcing people to give incriminating evidence against themselves was unconstitutional, the Court of Appeal said, in a ruling which could affect other cases the tribunal has dealt with or is still hearing.
The court decided the powers of the tribunal meant it operated at a level equivalent to a criminal court, and that those appearing before it were entitled to the same protections as any criminal defendant. Specifically, a person under investigation was able to invoke their right to silence under the Hong Kong Bill of Rights, a three-judge panel said.
The tribunal had believed a 1990 law allowed it to force people under investigation to divulge information that incriminated themselves.
Chief Justice Geoffrey Ma Tao-li, Court of Appeal vice-president Robert Tang Chin and Mr Justice William Stone found the tribunal had breached the rights of Koon Wing Yee, chairman of fashion retailer Easyknit, and business associate Sonny Chan Kin-shing, when it forced them to testify against themselves in relation to a 2000 case.
Central to this finding was the fact that the punishments available to the tribunal, in particular its ability to fine a wrongdoer three times their proceeds from a tainted deal, went beyond what a civil court should be allowed to impose.
'There is no doubt the ... penalty is punitive and deterrent in nature, and not compensatory,' the court said. 'We ... conclude that the proceedings involved the determination of a criminal charge.'
The law governing the tribunal was changed four years ago with the passage of the Securities and Futures Ordinance, which created a specific criminal offence of insider dealing, and a Market Misconduct Tribunal to hear civil cases arising after 2003.
Securities and Futures Commission chief executive Martin Wheatley said the judgment would probably have no impact on the new tribunal since its powers were weaker. However, it has the power to ban a person from involvement in a company's management or trading for five years.
The court dismissed an argument that such a power was too harsh for a civil penalty. Rather, it held that it was a measure to protect the public. But Ronny Tong Ka-wah, a former Bar Association chief, said it was the impact on the individual that should determine the issue.
He said other jurisdictions had already recognised that penalties such as those still open to the Market Misconduct Tribunal should only be open to criminal courts.