This will be in effect for three years, starting 11 March 2021.
The Court of First Instance has disqualified two former senior executives of Long Success International (Holdings) Limited from holding office in any corporation for profit guarantee violations.
The Securities and Futures Commission (SFC) reported this after it obtained disqualification orders from the court for former chief executive officer and executive director Hu Dongguang and former executive director Guo Wanda.
Hu and Guo will not be allowed to sit as director and be directly or indirectly involved in the management of any corporation in Hong Kong, including Long Success or its subsidiaries. This will be in effect for three years, starting 11 March 2021.
“The orders were made by the Honourable Mr Justice Coleman after they admitted that they were in breach of their fiduciary duties and common law duties to act in the interest of Long Success,” the SFC said.
SFC investigations showed that the Jining Gangning Paper Co. Ltd. failed to achieve the requisite profit amount in 2010 and 2011, upon selling 51% of its equity interest to Long Success.
Former chairman and executive director Wong Kam Leong signed three confirmation letters with the seller between March 2011 and March 2012, agreeing to defer the seller’s payment under the profit guarantee. In June 2012, Wong signed another confirmation letter that would forfeit the profit guarantee, worth $30.1m, owned by the seller.
The June 2012 confirmation letter was not approved by the Board of Long Success.
Hu and Guo, for their part, admitted allowing Wong to control the company’s affairs for his advantage; thereby neglecting their duties.
They were liable for approving the March 2011 confirmation letter without sufficient enquiries and for failing to monitor the profit guarantee between March 2011 and June 2012. The SFC noted legal proceedings on 11 other former directors are ongoing.
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