From Hong Kong:
SFC seeks court orders against former chairman of Kong Sun Holdings Limited and China Sandi Holdings Limited
The Securities and Futures Commission (SFC) has commenced legal proceedings in the Court of First Instance to seek disqualification and compensation orders against Mr Tse On Kin, former chairman and executive director of Kong Sun Holdings Limited (Kong Sun) and China Sandi Holdings Limited (China Sandi), for devising a scheme to conceal his interests in the companies’ share placements in 2009 (Notes 1 & 2).
The SFC alleges that Tse, who was the chairman of the two companies at the material time, used a nominee company to subscribe for their placement shares, which were intended only for independent placees.
Tse also allegedly concealed his interests in the placement shares from the companies’ boards and shareholders in order to obtain them at discounts for which he should not have been eligible.
As part of the proceedings, the SFC is seeking orders to compel Tse to account for the profit he made from the sale of the placement shares in Kong Sun and to pay compensation to Kong Sun for the secret profit he made (Note 3).
In Malaysia both shares being held by nominees and the issue of private placements are a rather common practice (in the very large majority of private placements we will never know the names of the persons or companies that will receive the placement shares).
I am therefore almost sure that the above scheme to conceal interests must have happened at Bursa listed companies, probably frequently.
But why has there been hardly any enforcement at all in this area? Are the enforcement agencies not pro-active enough, doing some investigations, looking for clues, connecting the dots, following the money trail?
I don't suggest enforcement of this is easy, but a few successfully prosecuted cases would at least give some confidence that action is being taken and that perpetrators are at a risk.
My suggestion is to require all placees and their addresses to be listed on the Bursa website. Listed companies must provide a top 100 shareholder list on a monthly basis on the Bursa website. In the digital age, thus should be an easy task.
ReplyDeleteI agree, and that will surely help. The other issue is if shareholders are actually nominees for others.
ReplyDeleteIt will be difficult to determine which placees are nominees of controlling shareholders.
ReplyDeleteListing the names of the placees and their addresses on the Bursa website might be a deterrent. It is likely that nominees are not aware they are nominees as they do not know or they have a low level of education.
Listing the Top 100 shareholders on a monthly basis will further the transparency cause.