HONG KONG: SFC sanctions Daqing Dairy and its directors for Hong Kong takeovers breaches

Wednesday November 27 2013

The Securities and Futures Commission has issued sanctions against Daqing Dairy Holdings Limited and its directors, Mr Wang De Lin and Mr Stephen Chiang Chi Kin for breaching Hong Kong takeover rules.

The Takeovers Executive has imposed a Cold Shoulder Order denying Wang direct or indirect access to the Hong Kong securities markets for 24 months from 28 November 2013 to 27 November 2015.

The Executive also publicly censures Daqing Dairy, Wang and Chiang in relation to their conduct in this matter.

At all material times Wang and Chiang were respectively Daqing Dairy’s only executive director and only independent non-executive director.

On 18 April 2013, Daqing Dairy announced jointly with Radiant State Limited (Offeror) that the Offeror had acquired a 52.16% interest in Daqing Dairy from its former controlling shareholder and that the Offeror would make a general offer for the shares in Daqing Dairy pursuant to Rule 26.1 of the Takeovers Code. The Offeror posted an offer document to shareholders on 7 June 2013.

Despite repeated requests by the Executive to do so, Daqing Dairy and its directors failed to issue an offeree board circular to shareholders in respect of the general offer as required under Rule 8.4 of the Takeovers Code.

Daqing Dairy, Wang and Chiang accept that they have breached Rule 8.4 and have agreed to the disciplinary action against them. Their failure to issue a circular in accordance with Rule 8.4 of the Takeovers Code constitutes a breach of a fundamental provision of the Takeovers Code.

Click on the above link for the Executive Statement.