Court orders 3-year corporate ban on Anxin’s ex-financial controller

Yang has been banned from undertaking corporate roles for three years.

The Securities and Futures Commission (SFC) has obtained a court order to disqualify Yang Shuyan from being a director, liquidator, receiver, or manager of Anxin-China Holdings Limited (Anxin). 

Yang is also barred from being involved in the management of any listed or unlisted corporation in Hong Kong without the court’s permission for a period of three years.

The Court of First Instance issued the order after Yang admitted to failing in her duties as Anxin’s financial controller, lacking due skill, care, and diligence in assessing the company’s financial position. 

She also admitted to negligence as part of a team investigating discrepancies in the company’s banking records and management accounts.

In addition, Yang failed to raise concerns about the company’s cash flow, the bank records provided to the independent forensic investigator, and her suspicions about senior management’s integrity during her tenure.

The SFC’s investigation found that Anxin significantly overstated its cash position between 2011 and 2015.

In particular, its audited financial statements for 2012 and 2013 inflated cash holdings by $1.26b and $1.73b, respectively. To cover this up, Anxin provided false bank records to auditors during a 2014 audit.

The court said that Yang’s negligence “is nothing short of breath-taking” and that irregularities of such scale could not have been possible without Yang being grossly negligent.

“The role of financial controllers in listed companies is pivotal to ensuring the integrity of financial reporting. Professional scepticism is not just a best practice; it is an essential duty. Financial controllers must approach their responsibilities with a critical mindset, actively questioning and verifying financial information to protect stakeholders,” Christopher Wilson, executive director of Enforcement at SFC said.