Pearl Oriental Oil chairman Wong Kwan and four others face penalties for breaching the takeover code in a 2010 deal, the Securities and Futures Commission says. An independent panel will hold a public hearing to decide on a range of penalties that could include a temporary ban on them trading in local markets. The SFC alleges Wong and the four others conspired to help Wong skirt the takeover code requirement for a general offer to be made to other shareholders in the company, formerly known as Pearl Oriental Innovation. The four were named as Ma Yueng-lin, Jenny Li Jiong, Kitty Yip Sui-kuen and Yik Siu-hung. Wong and Yik in late 2009 had invested in a US gas and oil field in Utah. In January 2010, they agreed to sell the asset to Pearl Oriental for US$200 million in cash and new shares. The deal would increase Wong's stake from 43.38 per cent to 44.5 per cent and Yik's holding from 1.53 per cent to 12.37 per cent. The SFC at the time considered the two were acting in concert, prompting the need for a general offer. This was postponed pending the completion of the acquisitions. In May 2011, Wong purported to sell his entire stake in Pearl Oriental for HK$825 million to Ma, Li and Yip. The SFC said the three were closely connected to Wong and never paid Wong for the shares. The SFC deemed the arrangement to constitute "ware-housing" of the shares. In January, the Independent Commission Against Corruption began investigations into Wong and the firm's former deputy chairman Lew Mon-hung over alleged malpractice in an acquisition of a US gas and oil field in 2010. They have denied the allegations.