KINGLY Commodities, whose brokerage licence was revoked by the Securities and Futures Commission (SFC) in March, is seeking to re-open business in Hong Kong by appealing to the watchdog's independent appeal panel. The Hong Kong-based commodities brokerage was ordered to close its offices after an investigation by the SFC into the way the company handled its clients' investments. SFC assistant director (licensing) Alec Tsui confirmed that the appeal documents had been submitted and that a hearing had been scheduled for mid-December. The appeal, which argues that findings by the SFC were incorrect, seeks to overturn the commission's decision to revoke the brokerage licence and the move to not grant another licence for consultancy services. Three hearings have been fixed, but the matter could take the panel longer to reach judgment, Mr Tsui said. ''Being a private hearing, things have to remain confidential. But it can be said that the judgment is going to be final as far as the SFC is concerned,'' he said. The appeal panel is an independent body, whose members include market practitioners and legal professionals, all outside the SFC. There are 11 members. It is understood that the panel for the Kingly case will be made up of two members and Robert Tang, a barrister, the present deputy chairman of the panel. Anthony Francis Neoh, QC, the council member at the Hong Kong Stock Exchange, is known to act on behalf of Kingly Commodities. One SFC source noted that this case might turn out to be a significant legal battle. ''There are piles of documents involved in the case, and, if the legal dispute focuses on the verification of the fact - rather than the judgment itself - things will be very complicated,'' the source said. Under the SFC Ordinance, the appeal is to hear the presentation in person and, during the period of appeal, the appellant is allowed to run its business until the verdict is reached. However, it is known that Kingly Commodities does not have any plans to operate again before the hearing. The action on the brokerage with its futures trading on the Manila Futures Exchange was the largest regulatory swoop taken by the SFC. The company was asked to pay out $8.85 million from clients' accounts left open after the SFC effectively shut its offices and ordered a freeze on the accounts. The repayment came after the SFC asked Kingly to retrieve money from Manila that had been identified as belonging to clients. The appeal is expected to be watched closely by the market because it is the first time that a commodity trader will be going to the appeal panel for a review of an SFC decision to revoke a licence. The past 12 months has seen a number of appeal cases from securities brokerages. Usually hearings have resulted in upholding of the original judgment. In June, the SFC ordered a freeze all the investments handled by Pan Pacific Securities Management, also a Hong Kong-registered investment adviser. On Friday, the SFC announced that it would spend $180,000 on a television advertising campaign to alert the public to the new proposed legislation on fringe forex dealers.
