The Securities and Futures Commission (SFC) has obtained disqualification orders in the Court of First Instance against four former executive directors, Mr Lee Chi Kong, Mr Lam Ping Kei, Ms Wong Choi Fung and Mr Yeung Kwong Lun, and a former independent non-executive director, Mr Wong Yun Kuen, of Superb Summit International Group Limited.
Lee was disqualified for 10 years, Wong Yun Kuen was disqualified for seven years, while the others were each disqualified for five years, from (i) being, or continuing to be, a director, liquidator, or receiver or manager of the property or business of Superb Summit or any other corporation including any of Superb Summit’s subsidiaries and affiliates, or (ii) in any way, directly or indirectly, being concerned, or taking part, in the management of Superb Summit or any other corporation including any of Superb Summit’s subsidiaries and affiliates. They were also ordered to pay the SFC’s costs in the proceedings.
The SFC commenced proceedings against the former directors following its investigations into allegations of misconduct by Superb Summit’s directors and other officers. These allegations pertain to three acquisitions made between 2007 and 2014, which were part of the carefully implemented schemes to defalcate and misappropriate the assets of Superb Summit. Superb Summit suffered significant losses as a result of these acquisitions.
Superb Summit acquired 70% and 30% interests in a target company – which purportedly held forestry assets – in 2007 and 2009, respectively, for a total of $1.678 billion. The Court found that the forestry assets did not exist.
Superb Summit also acquired interests in another company which purportedly held intellectual property rights for certain engineering technology. The Court found that the technology had little to no value, and the transaction served as a means to channel significant funds to Superb Summit’s substantial shareholder.
Five former directors admitted to breaching their duties by failing to take relevant steps to ensure that proper and reasonable due diligence had been conducted regarding the alleged forestry assets in the 2007 and 2009 acquisitions and/or the target technology in the 2014 acquisition. They also accepted that in considering and approving the acquisitions, they were incompetent, reckless or negligent (as applicable). The disqualification orders against these five former directors were made on the basis of their admission.
The SFC’s proceedings against other former directors and officers of Superb Summit are ongoing.
