State-owned Great Wall Pan Asia Investment is seeking an injunction against Yeung selling his assets before repaying HK$170 million.

It all started in May 2015 when the share price of the ginseng shop had already tripled. The stock fever needed a stimulus to go higher.

One day, Hang Fat voluntarily issued an announcement that the Hong Kong subsidiary of the bad debt manager had brought an 1.8 per cent stake from Yeung at HK$238 million.

In a press release, Yeung called Great Wall “a strategic investor” to help the shop in finding new markets. The share price reached a record high.

Underneath, however, was a put option issued by Yeung agreeing to buy back the stake at a 2 per cent premium by the end of 2015, Great Wall told the court. The state firm was no endorser but a lender of fame to Yeung.

Luck was not on his side though. A financial fiasco up north dragged Hang Fat’s price down. On January 29, margin calls against Yeung forced Hang Fat’s price down 91 per cent. Great Wall wants its money back.

Our regulators were not slapped once but twice.

On February 2, Hang Fat announced Yeung’s sale of a 6.1 per cent stake to Yang Kai, controlling shareholder of listed China Huishan Diary.

The announcement postulated Yang as a white-knight, saying that the pair were negotiating for more share sales which “may lead to a change in control”.

The reality was different.

Yeung told the court he agreed to sell at half of the trading price because the shares would be held in trust for him to prevent forced sales.

He could buy back the shares at the same price if a new investor was found and sell at a higher price; and if the debt restructuring was not successful, all his shares would be returned to him.

The meeting between Yeung and Yang’s assistant Liu Han over the issue was confirmed to the court by a Great Wall banker who was present.

This made a mockery of our regulatory regime because he has repeatedly told shareholders and regulators misleading information, which is against Hong Kong law.

What is more alarming is the contempt shown by Yeung when he came up withhis second plot in an attempt to clear himself from some financial liability.

Did he forget what the law says? Or did he find comfort in the fact that prosecutions have been rare?

What regulators should also look into is Hang Fat’s change in control.

In February, Yeung agreed to the company issuing a 155 per cent stake to two entities at only 14 per cent of its market price, leading to his loss of control.

Great Wall saw no commercial rationale because the sum raised would only pay off 22 per cent of Hang Fat’s HK$1.88 billion debt.

It alleged that the transactions were attempts by Yeung to siphon off his shares and assets to parties connected with him, in an attempt to make himself judgement proof against his creditors.

The judge noted that Yeung’s share sale to Yang was for a similar purpose: to have his shares transferred to someone to be held in trust for him.

Even if Hang Fat’s recent sale of control was not “mere shams”, the judge was concerned enough with Yeung’s “disregard for contractual obligations” to grant the injunction.

Until our regulators take any action on the above, Yeung can continue his HK$500,000-a-month lavish lifestyle. That does not include his HK$53,000 room at the Four Seasons; and his hefty legal bill, according to the court.

Wait a minute, didn’t Yeung claim financial difficulty from margin calls to justify his dumping of shares against the listing rules?

That is another question for the regulators.