HONG KONG: SFC Sanctions Capital VC and Yau Chung Hong for Hong Kong Takeovers Breaches

Tuesday May 22 2012

The Securities and Futures Commission (SFC) has taken disciplinary action against Capital VC Limited (Capital VC) and Mr Yau Chung Hong in relation to their breach of Rule 26.1 of the Code on Hong Kong Takeovers and Mergers (Takeovers Code).

Yau and Capital VC failed to make a general offer in respect of Longlife Group Holdings Limited (Longlife), a company listed on Growth Enterprise Market, after having increased their collective shareholding in Longlife to 30.19% on 10 June 2011 thereby triggering a mandatory general offer obligation under Rule 26.1 of the Takevovers Code.

The Takeovers Executive (Executive) has imposed a Cold Shoulder Order denying Yau direct or indirect access to the Hong Kong securities markets for 18 months from 23 May 2012 to 22 November 2013.

The Executive also publicly censures Yau and Capital VC in relation to their conduct in this matter.

The Executive believes that the conduct of Yau and Capital VC has resulted in a serious breach of a fundamental provision of the Takeovers Code which merits strong disciplinary action. Both Yau and Capital VC accept that they have breached Rule 26.1 of the Takeovers Code and agreed to the disciplinary action taken against them under section 12.3 of the Introduction to the Takeovers Code.

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