THE Securities and Futures Commission (SFC) is believed to be studying the $1.45 billion sale of shares in Giordano International by Jimmy Lai Chee-ying to see whether he has breached a securities ordinance which carries a fine of $50,000 and imprisonment of two years on conviction.
On Tuesday, Mr Lai sold his 27 per cent stake in Giordano, the clothing retailer he founded, just hours after Giordano told the market through the stock exchange that he had no definite plans for a sale.
Shares in Giordano resumed trading yesterday gaining 3.77 per cent or 30 cents to $8.25 on a day when the Hang Seng Index shed 1.2 per cent.
The exchange suspended the stock on Wednesday after finding that the placement was executed by Crosby Capital Markets in London on Tuesday night.
Regulatory sources said the SFC was looking at Securities Ordinance 138 in particular.
That ordinance states: A person shall not make 'any statement which is, at the time and in the light of the circumstances in which it is made, false or misleading with respect to any material fact and which he knows or has reasonable ground to believe to be false or misleading.' A legal source said no charge had been made under Securities Ordinance 138 for some years.