Investors in suspended Hontex International Holdings are a step closer to getting their money back as the Securities and Futures Commission yesterday applied to the High Court seeking an order to return the company's HK$1 billion initial public offering proceeds to investors.
The court is expected to make a ruling on June 15.
The SFC suspended trading of the Fujian-based fabricmaker's stock on March 30 last year, just 64 days after its listing, and won a court order to freeze the HK$997.4 million the company had raised through its IPO.
The freeze came after KPMG, Hontex's auditor, told the SFC that its senior manager, Leung Sze-chit, had allegedly accepted a HK$300,000 bribe from an agent of the company.
The Independent Commission Against Corruption later arrested and charged Leung, but he was acquitted by the District Court last month as the prosecutors could not make the charge stick.
The SFC yesterday said Hontex had disclosed materially false or misleading information in its IPO prospectus, which was likely to have induced investors to subscribe and purchase Hontex shares.
'Hontex's financial position, as disclosed in its IPO prospectus, was materially overstated,' the SFC said in a statement.