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Enoch Yiu

A company director has been ordered by an insider dealing tribunal to pay more than HK$33 million to the Government.

The tribunal found that Huo Sheng Pu, a director of Henan Hong Kong Enterprises and Henan (Hong Kong) Finance, had committed insider dealing while trading in listed Indesen Industries in 1997. Indesen has been renamed Central China Enterprises.

The tribunal findings showed that Mr Huo had traded Indesen's shares before its announcements of several transactions with subsidiaries of Henan.

The transactions were mainly related to Indesen's purchase of controlling shareholdings of the subsidiaries.

Mr Huo was found to have purchased Indesen shares before the announcement of the deals made in July and August 1997, then sold them to take a profit after the news was made public and Indesen's share price had risen substantially.

The tribunal ordered Mr Huo to pay the Government about HK$33.35 million.

This included HK$16.54 million for the profit he earned, and HK$16.5 million as a penalty. Mr Huo must also pay HK$315,695 to cover the expense of the investigation and the cost of the inquiry. The tribunal banned Mr Huo from being a director, receiver or manager of a listed company for four years.

Indesen was listed on the stock exchange on August 18, 1992. Its main activity was the manufacture and sale of VHS video cassettes and housings.

The company made two public announcements in July and August 1997 about Indesen buying share interests from Henan-owned companies.

The company announcement on July 17, 1997 said it would acquire Henan Hong Kong Enterprises' 80 per cent equity interest in Henan Motor Car Repairing.

The company further announced on August 22, 1997 that it would acquire Henan (Hong Kong) Finance 100 per cent interest in Henan (Taiwu) Electric Power.



Insider-trading director must pay $33m