SFC reprimands NWS, 2 directors for breach
The Securities and Futures Commission yesterday criticised NWS Financial Management Services and two of its directors for breaching the takeover code regarding the purchase of shares of its subsidiary Taifook Securities Group in January.
The two - Andrew Wong Kwok-kin and Patrick Lam Wai-hon - and NWS Financial Management admitted the infraction, accepted the reprimand, and apologised.
The SFC said Mr Wong, after discussions with Mr Lam, asked NWS Financial Management between January 4 and January 11 to buy a total of 2.56 million Taifook shares in the market at HK$4.70 to HK$5.40 each.
The prices were higher than the HK$2.43 price NWS Financial Management quoted when it first made an unconditional offer for Taifook on June 15 last year. The offer became unconditional on July 13.
The SFC cited Takeover Code rule 31.3, which states that if any party has given an offer to shareholders of its subsidiary, it cannot make a second offer to acquire any shares in the open market at a price higher than its offer price within six months after the first offer becomes unconditional.
This rule is meant to ensure equal treatment of all shareholders.
NWS Financial Management told the SFC the breach was due to an 'inadvertent miscalculation' of the six-month lapse time.
Before the January deals, Mr Wong checked with the company secretary of NWS Financial Management's holding firm to make sure the purchases complied with the code. He received inaccurately based confirmation on June 15, the day the first offer document was sent to Taifook.
'The [SFC] executive has found that the breach was not in any sense deliberately made but did reflect a culpable failure to ensure that the requirements of the Takeover Code were met,' the SFC said.