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SCMP Reporter

AFTER fighting a seven-year battle, William Cheng Kai-man's share acquisitions in Shun Ho Resources finally resulted in a public apology, a possible bill of $50 million and a maximum five-year ban from using the securities market.

  Following the resolution of the Privy Council's decision earlier this month which ruled in favour of the Securities and Futures Commission (SFC), details of the settlement between the SFC and Mr Cheng emerged yesterday.

  Mr Cheng apologised for having contested the SFC's Takeover Panel's proceedings.

  'He acknowledges that the panel's decision states that he must compensate the shareholders and warrant holders who should have received a general offer in November 1988,' a resolution issued yesterday said.

  A bar is imposed on Mr Cheng from using dealers and financial advisers in the Hong Kong securities markets for an unspecified period.

  The ban will be lifted once he is able to satisfy all those who make valid claims for compensation.

  'Mr Cheng does not have sufficient cash resources at this time to satisfy all the claims that might be made, but will try to make available the necessary amount in the future,' the resolution said.

  After reviewing the circumstances, the panel decided that Mr Cheng should not be denied access to the facilities of the securities market for more than five years.

  The effective period commenced on November 24 and will end on November 24, 2000.

  Mr Cheng will advertise to invite those who were the beneficial owners of shares or warrants in Shun Ho Resources Holdings on November 30, 1988 to make claims for compensation.

  Although no amount was stated in the resolution, the panel had previously ordered Mr Cheng to pay compensation of about $50 million to shareholders who should have received a general offer.

  He will appoint an accounting or share registrar firm and advertise in newspapers on two occasions.

  Once claims are established, Mr Cheng can either settle them in full and the order will be lifted, or partially settles claims and get a reduction of the terms in the resolution.

  He may choose not to settle claims and the order will remain for five years.

  Factors taken into account when drawing up the resolution included Mr Cheng's comparative youth at the time of contravention. In 1988, Mr Cheng was 29 years old.

  While heavy legal expenses usually would not be considered in determining the order, the panel made an exception in Mr Cheng's deliberations.

  That is because 'the Shun Ho decision was the first time a compensation order was made by the panel'.

   The panel decided that Mr Cheng was inexperienced in the dealings, and was not guided by a financial adviser.

  'The panel has also given weight to Mr Cheng's apology for his conduct and to the fact that he has already been severely condemned and censured for that conduct.' 



Cheng loses his seven-year Shun Ho fight