SFC launches action to disqualify directors of Freeman FinTech Corp
The Securities and Futures Commission (SFC) is seeking to disqualify 10 current and former directors of the Freeman FinTech Corporation for breaching director duties in relation to a connected transaction that led to company losses.
The directors, including managing director Quincy Hui Kwong Hei and former non-executive director Andrew Liu, allegedly mishandled the acquisition and disposal of a stake in Liu’s Holdings.
Liu and Hui disregarded the ability of other Liu family members to object to Freeman’s indirect purchase of a 24.43 per cent stake in Liu’s Holdings, according to the SFC.
The other Liu family members did object, and Freeman later sold the interest back at a loss of HK$76.8 million after the acquisition failed to go through.
According to the SFC, Hui failed to make full inquiries with Liu on the stance of Liu’s Holdings other shareholders before getting Freeman’s shareholders to approve the acquisition.
Additionally, Liu had failed to disclose to Freeman that some shareholders of Liu’s Holdings had objected to the acquisition, and that there was a conflict of interest between Liu, his parents and Freeman in the disposal.
The SFC is currently seeking compensation orders that require Hui and Liu to pay back the loss amount to Freeman.
The remaining eight directors have also failed in their directorial duties by not acting in the best interest of the company, allowing false or misleading statements in the company’s announcement regarding to the acquisition and disposal, and failing to pursue Liu and the others for losses suffered by the firm, SFC said.
The first hearing of the petition filed by the SFC will be heard in the Court of First Instance on 24 February 2017.