Publisher Yu likely to avoid court action
MING PAO chairman Yu Pun-hoi, 36, will almost certainly escape prosecution for failing to disclose to the Stock Exchange convictions in Canada for offences committed 15 years ago.
When Yu was 20, he served four months in a Canadian prison for credit card and chequebook fraud and illegal possession of arms.
Under changes to Stock Exchange rules introduced last November all directors must make their declarations on oath. Lying is then punishable by law.
Herbert Hui, head of the listing division, said Yu had not signed one of the new legally binding forms.
Yu omitted to disclose a Canadian criminal record to the exchange when he became a director of Ming Pao and when South Sea Development was acquired in March 1992.
'The only time he would have to fill in a new declaration is for changes in directorships,' a lawyer said.
If Yu had signed one of the new forms he could have faced a two-year jail sentence and a fine starting at $10,000, the lawyer said.
The lawyer also said it was unlikely a challenge to Yu's chairmanship by shareholders could succeed. 'If enough of them got together, the minority shareholders could force an extraordinary general meeting,' the lawyer said. 'But there is no reason why Mr Yu should not vote his shares so any attempt to unseat him would almost certainly fail.' Mr Hui said the Exchange could decide in those circumstances that Yu was an interested party and bar him from voting his shares in his own favour.
Calling an extraordinary general meeting for Ming Pao would be regulated by the company law of Bermuda where the firms is domiciled, Provisions in the Companies Ordinance would not produce problems for Yu. Section 168C of the Ordinance gives courts 'power to restrain fraudulent persons from managing companies'. But the powers almost certainly apply only to directors convicted of offences in Hong Kong itself.
'There is a long shot that the Financial Secretary would be able to apply to the courts and have a director removed,' said the lawyer.
Secretary for Financial Services Michael Cartland said the amendments to the legislation were enacted during the last session. 'This case doesn't fit that legislation because the offence occurs overseas,' he said.
Mr Hui, chief executive of the Exchange, Paul Chow and the listing committee, which will deliberate on Yu's fate, have several options open to them.
The Exchange could issue a statement 'which contains criticism'. An angrier response would be contained in an official censure.
The ultimate weapon would be to declare Yu's directorship as 'prejudicial to investors'. That would require Yu to resign - almost.
If Yu refused to resign the only way to force him out of the chairman's seat would be by suspending or delisting the company. 'That would be a nuclear bomb on your own people,' a lawyer said.
The Exchange would want to avoid a situation where damage is done to small investors while trying to push a recalcitrant director out. Mr Hui said the listing committee had been briefed and would report back soon.
