SFC obtains seven-year disqualification order against former executive director of First Credit Finance Group Limited

The Securities and Futures Commission (SFC) has obtained a disqualification order in the Court of First Instance against Ms Ho Siu Man, a former executive director of First Credit Finance Group Limited (First Credit) (Notes 1 and 2).

Ho has been disqualified from being a director and being involved in the management of any listed or unlisted corporation in Hong Kong, without the leave of the court, for a period of seven years.  The duration of her disqualification reflects the gravity of her misconduct.  She was also ordered to pay the SFC’s costs in the proceedings (Notes 3 and 4).

The SFC’s legal action against Ho follows an investigation which found that Mr Cho Kwai Chee acted as a de facto director of First Credit, participating in the management of the company’s business or affairs and making decisions of a directorial nature from December 2015 to June 2017.  Whilst being a de facto director of First Credit, Cho participated as a placee in a share placement organised by First Credit (Placing) and, together with his brother, subscribed for untaken rights shares in the rights shares issued by First Credit (Rights Issue).  However, the announcements issued by First Credit regarding the completion of the Placing and the Rights Issue incorrectly stated that all placees and subscribers were independent third parties.

Ho admitted that she had breached her fiduciary duties and/or failed to exercise the degree of care, skill and diligence required of her as a director of the company as she:

• ought to have been aware of Cho’s de facto directorship in the company but failed to ensure the company to publish an announcement to disclose his role;   

• negligently caused the company to make a false and/or misleading statement regarding the independence of the placees in the Placing announcement;

• recklessly caused the company to make a false and/or misleading statement regarding the independence of the subscribers of the untaken rights shares in the Rights Issue announcement; and

• failed to consider the dilution impact of the Placing on shareholders before approving it.

The SFC’s proceedings against the other four former directors and a former de facto director of First Credit are ongoing.

End

Notes:

1. The shares of First Credit have been listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited since 13 December 2011.  On 24 November 2017, the SFC suspended the trading of First Credit’s shares pursuant to section 8(1) of the Securities and Futures (Stock Market Listing) Rules.  Ho was an executive director of First Credit from 9 April 2010 to 22 September 2017.

2. The SFC commenced legal proceedings under section 214 of the Securities and Futures Ordinance to seek disqualification orders against five former directors and a former de facto director of First Credit.  Please see the SFC’s press release dated 22 November 2023.

3. The Court made the order after approving that the proceedings against Ho be disposed of by way of Carecraft procedure.  The Court determined the appropriate orders to be made based on an agreed statement of facts and agreed proposed orders.

4. The judgment is available on the Judiciary’s website (Court Reference: HCMP 2106/2023).