Settlement with Sino Wealth International Limited and Clear Prosper Global Limited in matters relating to Giordano International Limited under The Codes on Takeovers and Mergers and Share Buy-backs

The Securities and Futures Commission (SFC) has reached a settlement agreement (Agreement) with Sino Wealth International Limited (Sino Wealth) and Clear Prosper Global Limited (Clear Prosper) in relation to what the Takeovers Executive (Executive) (Note 1) considers to be breaches of The Codes on Takeovers and Mergers and Share Buy-backs (Codes) by their parent company, Chow Tai Fook Nominee Limited (CTFN), and its concert parties (collectively, Relevant Concert Group), in relation to their dealings in the shares of Giordano International Limited (Giordano) (Note 2).

Following an extensive investigation into Giordano’s shareholding structure, the Executive considers that two other shareholders of Giordano outside CTFN group (Note 3) have been acting in concert with CTFN group in acquiring or consolidating control over Giordano and accordingly their aggregate shareholdings and dealings in Giordano shares should have been taken into account for the purpose of the Codes.

On that basis, the Executive considers that as the Relevant Concert Group’s interest in Giordano shares crossed 30% on 18 May 2016, this triggered an obligation to make a general offer at HK$3.60 per share on the same day (Note 4). However, no general offer was made for Giordano as required under Rule 26 of the Code on Takeovers and Mergers (Takeovers Code) (Note 5).

In addition, the Executive considers that there was a breach of Rule 5 of the Takeovers Code (Note 6) on 13 September 2022 in relation to the voluntary general offer (VGO) announced by Clear Prosper for Giordano at HK$1.88 per share in June 2022 because the VGO was declared lapsed on 13 September 2022 even though the only condition for the VGO had actually been fulfilled on the basis of the total number of voting rights represented by shares held by the Relevant Concert Group and valid acceptances received (Note 7).

Under the settlement, Sino Wealth and Clear Prosper have agreed to make cash payment to independent shareholders who held Giordano shares as at the dates on which the above breaches are considered by the Executive to have taken place. Subject to the number of successful claims received (Note 8), the maximum payment payable could potentially involve up to approximately HK$1.5 billion.

In agreeing to the settlement, the Executive has taken into account past decisions of the Takeovers and Mergers Panel (Panel) involving failures to discharge the general offer obligation and compensation payments, the specific facts and circumstances of the current case, and the time and costs required for a disciplinary hearing before the Panel. We are satisfied that this settlement would be in the public interest or the interest of the investing public.

The SFC reminds practitioners and parties seeking to participate in the financial markets in Hong Kong that they are expected to comply with the Codes in all matters relating to takeovers, mergers and share buy-backs. This settlement highlights the importance of adhering to the requirements under the Codes. The SFC remains committed to taking appropriate action to safeguard public interest and maintain the integrity of Hong Kong’s securities market.

The Executive Statement is available under the “Regulatory functions – Corporates – Takeovers and mergers – Decisions and statements – Executive decisions and statements” section of the SFC’s website.

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Notes:

1. This refers to the Executive Director of the SFC’s Corporate Finance Division or her delegate.

2. Under section 12.3 of the Introduction to the Codes, the Executive can resolve a disciplinary matter if the Executive and parties concerned agree on the disciplinary action to be taken. The Agreement was signed on 31 October 2025 subject to the following conditions: the appointment of an adjudicator to administer the claims and verification process, the submission of funding proof and the announcement of the claims and verification process by Sino Wealth and Clear Prosper. The Agreement takes effect today upon the fulfilment of these conditions. Please see the relevant announcement published by Sino Wealth and Clear Prosper today in respect of the Agreement for details.

3. Best Sincere Limited (Best Sincere) and Firstrate Enterprises Limited (Firstrate).

4. Rules 26.1(a) and (b) of the Takeovers Code require a general offer to be made when an acquisition by a person or its concert group results in the person or its concert group holding 30% or more of a voting rights of a company. Rule 26.3 of the Takeovers Code requires the offer to be made in cash at no less than the highest price paid by an offeror or its concert party for the relevant shares in the 6-month period before the commencement of an offer period.

5. Under Rule 3.6 of the Takeovers Code, an announcement of a firm intention to make an offer shall be made immediately after any acquisition giving rise to an obligation to make a general offer.

6. Rule 5 of the Takeovers Code requires an offeror to proceed with an offer unless a condition to the offer is not met.

7. The VGO was conditional on the total voting rights over Giordano represented by the accepting shares and shares already held by the offeror and its concert parties exceeding 50%. If the Giordano shares held by Best Sincere and Firstrate had been taken into account, the total number of shares held by the Relevant Concert Group would have exceeded 50% of Giordano’s share capital.

8. Subject to the production of requisite documentary proof, each independent Giordano shareholder as at 18 May 2016 and 13 September 2022 shall receive a specified payment for each Giordano share held by the shareholder on these respective dates. The payment per share is determined by comparing (i) the prices at which these shareholders should have had an opportunity to sell Giordano shares to the Relevant Concert Group under a general offer in strict compliance with the Takeovers Code and (ii) the benchmark market prices of Giordano shares. The announcement published by Sino Wealth and Clear Prosper today setting out details of the claims and verification process can be accessed on HKEXnews website under the stock code of Giordano.