HONG KONG: Court dismisses appeal for failing to make Hong Kong major shareholdings notification

Friday December 11 2015

The Court of first Instance has dismissed an appeal by Mr. Lam Fai Man against a $12,000 fine imposed on 30 June 2015 for failing to make a Hong Kong major shareholdings notification to Victory Group Limited his interests in Victory, as per s 310 of the Securities and Futures Ordinance.

The Court held that the legal obligation was on Lam to ensure that his duty of disclosure and notification was properly performed and this remained on Lam, even when the duty of disclosure had been delegated to his account executive. The court stated that there is an obligation upon the person required to disclose to ensure strict compliance by any delegated person.

Part XV of The Securities and Futures Ordinance provides that a shareholder with a notifiable interest exceeding 5% of the voting shares in a corporation is under a duty of disclosure to the Stock Exchange of Hong Kong (SEHK) and the listed corporation when they acquire an interest in or cease to be interested in, the voting shares, which results in a change to their notifiable interest. Lam notified the SEHK on time but failed to notify the listed company.

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