HONG KONG: SFC publicly criticises Wen Yibo for breach of Hong Kong Takeovers Code

Thursday December 4 2014

The Securities and Futures Commission of Hong Kong publicly criticised Wen Yibo for acquiring shares in Sound Global Limited within 6 months after the close of an offer at above the offer price in contravention of Rule 31.3 of the Takeovers Code.

On 10 September 2013, Sound Global and Sound (HK) Limited issued a joint announcement about the voluntary delisting of Sound Global from the Official List of the Singapore Exchange. In order to facilitate the delisting, Sound (HK) Limited made a conditional cash offer for all the shares in Sound Global at an offer price of $4.37 (SG$0.7) per share.

The offer closed on 17 January 2014. Between 28 March 2014 and 9 May 2014 Wen and Sound Water (BVI) Limited acquired a total of 5,600,000 Sound Global shares at prices ranging from $5.94 to $7.55 per share in a series of on-market purchases.

Wen accepted that he breached Rule 31.3 of the Takeovers Code. He admitted that the breaches were due to his inadvertent oversight and that he was not aware of the prohibition under Rule 31.3. These transactions constitute a breach of a fundamental provision of the Takeovers Code which is designed to protect the investing public. He agreed to the disciplinary action against him under section 12.3 of the Introduction to the Takeovers Code.

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