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Hie Chairman of a division of the
Insider Dealing Tribunal
established under section 15 of the
Securities (Insider Dealing) Ordinance,
Cap.395 of the Laws of Hong Kong
Notice under section 16(2) of the
Securities flnsider Dealine) Ordinance, fan 304
Whereas it appears to me that insider dealing (as that tenn is defined
in the Securities (Insider Dealing) Ordinance) in relation to the listed securities
of a corporation, namely Hong Kong Parkview Group Limited, has taken place
or may have taken place, the Insider Dealing Tribunal is hereby required to
inquire into and determine (a)
whether there has been insider dealing in relation to Hong Kong
Parkview Group Limited arising out of the dealings in the listed
securities of that company by Mr Hwang Chou Shiuan during the
period from 13 to 16 August 1993 (inclusive); and
(b)
in the event of there having been insider dealing as described in
paragraph (a), the amount of any profit gained or loss avoided as a
result of such insider dealing.
Dated'this /
day of July 1996.
YHui)
Financial Secretary
(i)
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The Hon. Mr Justice Burrell
Chairman
Insider Dealing Tribunal (Second Division)
established under section 15 of the
Securities (Insider Dealing) Ordinance,
Cap 395 of the Laws of Hong Kong
Notice under section 16(2) of the
Securities (Insider Dealing) Ordinance. Can 395
With reference to the notice pursuant to section 16(2) of the
Securities (Insider Dealing) Ordinance, Cap 395 dated 9 July 1996, requiring
the Insider Dealing Tribunal to inquire into dealing in the listed securities of
Hong Kong Parkview Group Limited in accordance with the terms of reference
set out in that notice, the said terms of reference are hereby amended as
follows:
(a)
whether there has been insider dealing in relation to Hong Kong
Parkview Group Limited arising out of the dealings in the listed
securities of that company by Mr Hwang Chou Shiuan and/or Mr
Peter Sin Kit Leung during the period from 13 to 16 August 1993
(inclusive); and
(b)
in the event of there having been insider dealing as described in
paragraph (a), the amount of any profit gained or loss avoided as a
result of such insider dealing.
The Insider Dealing Tribunal is hereby required to inquire into and determine
the above matters in accordance with these amended terms of reference.
Dated this
day of October 1996.
(Donald YKTsang)
Financial Secretary
(ii)
CONTENT
Page
CHAPTER 1
Background Information
1
CHAPTER 2
Procedure
8
CHAPTER 3
Law
16
CHAPTER 4
Connected Person
23
CHAPTER 5
Relevant Information - Law
35
CHAPTER 6
Relevant Information - Facts
44
CHAPTER 7
CAP 395 s. 10(3) Defence
67
CHAPTER 8
Mr. Peter SIN Kit-leung
79
CHAPTER 9
Penalties and Consequential Orders
82
Acknowledgements
96
(iii)
Annexures
A - Example of Salmon A and Salmon B letters
B - Statement of Agreed Facts
C - Draft press announcement of placement with Stock Exchange's
comments
D - UNIPEC fax dated August 16th 1993
E - UNIPEC fax dated August 17th plus translation
F - SEHK teletext announcement dated August 17th 1993
G - Press announcement of placement dated August 18th 1993
H - Inquiry by SEHK to Goodwill dated August 19th 1993
I - Draft reply to SEHK inquiries dated August 20th 1993
J - Final reply in answer to SEHK inquiries dated August 31st 1993
K - SFC letter (13th Sept) to HKPVG and their reply (21 st Sept)
L - Richards Butler letter (7th Oct) in reply to SFC inquiries
M - C.S. Hwang name card
N - Trading in HKPVG shares from June 15th 1993 to Nov 12th 1993
O - C.S. Hwang's trading in HKPVG shares through Mansion House
Securities from July 7th 1993 to Sept 16th 1993 together with the
. same information as prepared by Richards Butler
P - C.S. Hwang's purchases of HKPVG shares on August 13th 1993
(iv)
Q - Two graphs illustrating HKPVG shares movements
R - Poloair Travel Limited Invoice
S - Extract from Ming Ren Holdings Limited "Very Substantial
Acquisition and Connected Transaction Document" dated
December 14th 1992
(v)
CHAPTER 1
BACKGROUND INFORMATION
The purpose of this introductory chapter is to provide noncontentious details about the personalities and companies involved in this
inquiry, which for ease of reference we refer to as the "Parkview"5 inquiry.
The inquiry has centred on two purchase orders for Parkview shares (i.e.
shares in the listed company Hong Kong Parkview Group Limited
"HKPVG") made on Friday August 13th 1993. The first order was for
1 million shares (of which only 974,000 were actually purchased) placed
by Mr. HWANG Chou-shiuan. The second was for 100,000 shares
placed by Mr. Peter SIN Kit-leung.
By our terms of reference (with which we shall deal in more
detail in Chapter 2 - "Procedure") it is our task to decide if, having heard
and considered all the evidence before us and having considered
counsel's submission thereon, these two purchase orders amount to
insider dealing pursuant to s. 9 of the Securities (Insider Dealing)
Ordinance CAP 395 and whether Mr. Hwang and/or Mr. Sin should be
identified as insider dealers.
Hong Kong Parkview Group Limited
Prior to January 5th 1993 the listed company was called Ming
Ren Holdings Company Limited but on that date changed its name to
HKPVG.
Ming Ren Holdings Company Limited became the holding
company of Ming Ren Investment and Enterprises Limited on November
24th 1992. The latter had been a listed company in Hong Kong since
1973; the change of entity was effected by a "scheme of arrangement" for
the sole purpose of redomicile. In all material respects the new
company Ming Ren Holding Company Limited, was the same as the old
one, Ming Ren Investment and Enterprises Limited.
On August 13th 1993 there were 445,824,938 issued shares in
HKPVG. 74.84% were owned by the "Hwang Family" as follows:Mr. C.S. Hwang owned30,000,000 (6,73%)
Mr. George WONG Kin~wah owned 10,000,000 (2.24%)
Kompass International Limited owned 293,674,138 (65.87%)
The remaining 112,150,800 (25.16%) were in the public domain.
Kompass International Limited ("Kompass") is a British Virgin
Islands company. It was incorporated on October 6th 1992. From that
date until December 20th 1993 (i.e. covering the key dates of August
13th - August 18th 1993) Kompass's three directors were three of Mr.
C.S. Hwang's sons namely George Wong, Victor Hwang and Tony
Hwang, each of whom also owned one share each. On December 20th
1993 C.S. Hwang himself and his 4th son Richard also became directors
and holders of one share each in Kompass.
The Family
One of the key issues in this inquiry has been the connection, if
any, between Mr. C.S. Hwang and HKPVG. If we are not satisfied that
Mr. Hwang is a "connected person" as defined in s. 4 of CAP 395 then he
cannot be identified as an insider dealer. The only subsection of s. 4
which could apply to Mr. Hwang is s. 4(c). The law relating to s. 4(c)
and the evidence we have considered when deciding this issue are dealt
with in Chapters 3 and 4.
Since his arrival in Hong Kong Mr. Hwang has built up a
substantial family based business empire. His eldest son, Mr. George
Wong, when giving evidence said of his father - "he's the man who built
up the empire ... but Pm running Hong Kong Parkview Group". Mr.
Hwang started in business in Taiwan upon his arrival there in 1948 when
he was in his early twenties. The family business in Taiwan is called
the Chyau Fwu Group. It is even more substantial than the Hong Kong
based business.
The Hong Kong interests have expanded and
diversified over the years.
Major projects in property, travel,
entertainment and oil have been undertaken or considered. We give this
introductory thumb-nail sketch to emphasize that the "empire" to which
Mr. George Wong referred is - in the most general of terms - one of those
south-east Asian success stories which has been family based, family
controlled and family run.
Having made such a general observation it is equally important
to set out the agreed facts in relation to each member of the family
relating to their actual position at the relevant time (August 1993).
George, Victor, Tony, Richard and Sally are the five children of
C.S. Hwang who have been referred to in this inquiry. George, Victor
and Tony were Directors of HKPVG at the key dates. George was the
Chairman. Sally worked for her father at the offices in the Parkview
residential complex. In the course of the inquiry we have heard
evidence from C.S. Hwang himself, George Wong and Sally Chen. We
have received into evidence an affidavit from Victor Hwang. Tony and
Richard Hwang have played no material part in the inquiry.
Mr. C.S. Hwang resigned from the Board of Directors of Ming
Ren Investment on June 4th 1992. Since HKPVG came into existence
(January 1993) he has never been the Chairman or on the Board of
Directors. Neither was he, in August 1993, a substantial shareholder or
officer or employee of HKPVG as defined by the Securities (Insider
Dealing) Ordinance CAP 395. He is and always has been the Chairman
of the Taiwanese company - the Chyau Fwu Group. As we shall
mention later in our report the Chinese characters for the Chyau Fwu
Group and for HKPVG are the same.
The kev events
There are three undisputed events which provide the
cornerstones of the whole inquiry. They are:(i)
On Friday August 13th 1993 Mr. C.S. Hwang and Mr. Peter SIN
Kit-leung purchased HKPVG shares.
Mr. C.S. Hwang
purchased 974,000 and Mr. Peter Sin purchased 100,000.
(ii) On Friday August 13th Mr, C.S. Hwang flew to Beijing where,
in the evening, he met Mr. JIANG Yun-long, the general
manager of "UNIPEC" (China International United Petroleum
and Chemicals Company Limited).
(iii) At 10:02 a.m. on Tuesday August 17th a teletext announcement
was made at the Hong Kong Stock Exchange that HKPVG had
arranged a placement of 89 million of its shares to UNIPEC at
$2.85 per share. A more detailed announcement was made in
the press on the following day.
The closing prices of the HKPVG share around the key dates
were:Thursday
Friday
Monday
Tuesday
Wednesday
Thursday
August 12th 1993
August 13th 1993
August 16th 1993
August 17th 1993
August 18th 1993
August 19th 1993
- $2.650
-$2.850
-$3.200
-$3.575
- $3.825
-$4.325
An investigation of these events will play a major part in this
Report. Further details of the events of each day between the 13th
August and the 18th August (also undisputed) are:Friday August 13th:
(a) The purchases at (i) above were made. Mr. C.S. Hwang's order
was placed in the morning before he flew to Beijing. The order
was carried out by his broker, Mansion House Securities. It
was carried out by a number of transactions throughout the day,
some in the morning and some in the afternoon when he was in
Beijing. Mr. Peter Sin's order for 100,000 shares was made
through his broker, Mayfair Securities Limited. The prices at
which the purchases were made indicate that they were carried
out in the afternoon.
(b) Mr. C.S. Hwang and his daughter Sally flew to Beijing on flight
CA102. They went through Immigration at Kai Tak at 11:47
a.m., the flight took off at 12:56 p.m. and it arrived at Beijing, at
the parking bay, at 3:38 p.m. They travelled on one-way first
class tickets.
Saturday August 14th:
(a) Mr. C.S. Hwang and Sally Chen returned to Hong Kong on
CA101 which left Beijing at 7:50 a.m. and arrived at Hong Kong
at approximately 11:00 a.m.
(b) George Wong went through Immigration at Kai Tak at 9:39 a.m.
on his way to Shanghai.
Monday August 16th:
(a) A fax was received by HKPVG at 11:09 a.m. from UNIPEC, at
Worldwide House in Central. It was from Mr. JIANG Yunlong and was marked for the attention of Mr. C.S. Hwang who
was in the office at the time of its arrival. The fax is at
Annexure D of this Report.
(b) At 4:54 p.m. George Wong arrived back at Kai Tak having
returned from China.
Tuesday August 17th:
(a) Before the H.K. Stock Exchange (SEHK) opened Sammy Leung
of Goodwill Capital Limited, the financial adviser of HKPVG
informed the SEHK of the intended placement of 89 million
HKPVG shares to UNPEG. He further suggested that HKPVG
shares be suspended but the SEHK decided not to.
(b) At 10:02 a.m. the HKPVG made a teletext announcement about
the placement (Annexure F of this Report).
(c) At 10:22 a.m. UNIPEC sent another fax to Mr. C.S. Hwang to
the offices at Worldwide House concerning the reasons for its
decision to buy the HKPVG shares and detailed background
about UNIPEC.
(d) The HKPVG Board of Directors met and passed a resolution to
issue 89 million new shares to Kornpass at $2.85 cents each
(e) Kompass sold 89 million shares to UNIPEC at $2.85 each.
Settlement date was to be August 19th.
Wednesday August 18th:
(a) The placement was formally announced in both Chinese and
English language newspapers (Annexure G).
These events prompted certain inquiries to be made by the
SEEK of Goodwill and HKPVG. It is useful at this stage to highlight
the most significant pieces of correspondence upon which many of the
witnesses have been closely examined:
Annexure H
(dated 19.8.93) -an enquiry by the SEEK addressed to Goodwill for the
attention of the Managing Director (as he then was) Mr.
Sammy Leung.
Annexure I
(dated20.8.93)-a draft reply to Annexure H - prepared by Ms
Charlmane Wong to be signed by Mr. Sammy Leung.
Annexure J
(dated25.8.93) -an amended reply signed by Mr. Sammy Leung which
was later sent to the SEHK dated 31.8.93.
Annexure K
(dated 21.9.93) -a letter from HKPVG signed by George Wong to the
SFC responding to inquiries made about the placement.
Annexure L
(dated 7.10.93) -a letter from Richards Butler, solicitors for HKPVG to
the SFC in reply to further enquiries about the
placement.
The Key Questions
The primary issues which flow from the key events are:(i)
Was Mr. C.S. Hwang a person connected to HKPVG as
defined by s. 4(1 )(c) CAP 395? [There is no dispute that
Mr. Peter Sin was so connected by virtue of s. 4(l)(a).]
(ii) Were Mr. Hwang and Mr. Sin in possession of relevant
information at the time they made purchases on August
13th? We will address this issue by answering 3
questions :(a) What is the least amount of information, in the context
of this case which would satisfy the requirements of
relevant information as defined by s. 8 of CAP 395?
(b) Were Mr. Hwang and/or Mr. Sin in possession of at
least that amount [as in (a) above] of information?
(c) Did they know that it was relevant information?
CHAPTER 2
PROCEDURE
1. The Tribunal
By a notice dated July 9th 1996 issued pursuant to s. 16(2) of the
Securities (Insider Dealing) Ordinance CAP 395 ("the Ordinance5') the
Acting Financial Secretary Mr. Rafael S.Y. Hui directed that a Tribunal
be instituted to inquire into and determine:"(a) whether there has been Insider dealing in relation to Hong Kong
Parkview Group Limited arising out of the dealings in the listed
securities of that company by Mr. Hwang Chou-shiuan during
the period from 13 to 16 August 1993 (inclusive); and
(b)in the event of there having been insider dealing as described in
paragraph (a), the amount of any profit gained or loss avoided
as a result of such insider dealing."
By an amended notice signed by the Financial Secretary Mr. Donald Y.K.
Tsang dated October 22nd 1996 the name of Mr. Peter SIN Kit-leung
was added into paragraph (a).
Pursuant to section 15 of the Ordinance the Tribunal was duly
constituted as follows:Chairman : The Hon. Mr. Justice Michael Burrell
Member: Mr. Kennedy LIU Tat-yin (Hong Kong Certified
Public Accountant, fellow of the H.K. Society of
Accountants, fellow of the U.K. Chartered
Association of Certified Accountants, fellow of the
U.K. Institute of Chartered Secretaries and
Administrators and fellow of the H.K. Institute of
Company Secretary) - a partner in the firm of
Arthur Andersen and Company
Member: Mr. Simon LAM Siu-lun (Hong Kong Certified
Public Accountant, associate member of the
Institute of Chartered Accountants in England and
Wales, associate member of the Hong Kong
Society of Accountants and fellow of the Taxation
8
Institute of Hong Kong) - a partner in the firm of
Au Young, Lam & Wu
2. Legal Representation:
The Tribunal appointed Mr. Daniel Marash, instructed by the
Attorney General's Chambers, as the counsel to the Tribunal. He was
assisted by Miss Serlina LAU Suet-ching of the Civil Division of the
Attorney General's Chambers.
Clause 16 of the Schedule to the Ordinance states:"A person whose conduct is the subject of an inquiry or who is
implicated, or concerned in the subject matter of an inquiry
shall be entitled to be present in person at any sitting of the
Tribunal relating to that inquiry and to be represented by a
barrister or solicitor."
Mr. HWANG Chou-shiuan was represented by Mr. Ronny K.W.
Tong Q.C. leading Mr. Godfrey W.H. Lam instructed by Richards Butler,
Solicitors.
Mr. Peter SIN Kit-leung was represented by Mr. Jonathan Harris
instructed by Hastings & Co., Solicitors.
One of the witnesses who gave evidence before us also elected
to be legally represented. Ms Irene So was represented by Ms Selina
Lau instructed by Woo, Kwan, Lee & Lo, Solicitors.
In an Insider Dealing Tribunal it is not essential for counsel to be
present on every occasion that the Tribunal sits. Mr. Tong was present
at every sitting, with one or two minor exceptions so was Mr. Harris.
Ms Selina Lau however, quite properly, only attended when her lay client
was giving evidence.
3. "Salmon" Letters
The first task of the Tribunal and its counsel was to identify to
whom "Salmon" letters should be sent. The purpose of a Salmon letter
is to give any person advance notice that they may be affected by the
inquiry. They are called "Salmon" letters after Lord Justice Salmon
who was the Chairman of the Royal Commission on Tribunals of Inquiry
in the United Kingdom in 1966. We decided, in keeping with a
procedure recently adopted by the Hong Kong Insider Dealing Tribunal,
to issue two different types of Salmon letters, which we have called
Salmon "A" letters and Salmon "B" letters. Examples of each are at
Annexure A of this Report. A Salmon "A" letter is sent to any person
against whom a finding of insider dealing could, based on the material
available before the commencement of the inquiry itself, be made. A
Salmon "B" letter is sent to any person who, based on the same material,
may be concerned in the subject matter of the inquiry but against whom
there is, at the time of sending the letter, no suspicion of insider dealing.
It is a feature of an inquisitorial function that, in the course of the inquiry,
a suspicion against an individual may emerge where none existed at the
outset. If that were to happen a Salmon "A" letter would be sent to such
an individual as soon as the suspicion arose so that he could be legally
represented if he had, hitherto, not been. In the Parkview inquiry this
did not arise.
The material which the Tribunal and counsel to the Tribunal
considered when deciding to whom Salmon letters should be sent
comprised the statements and documents gathered by the Securities and
Futures Commission (the "SFC") as a result of its investigation into
possible insider dealing. We also read and considered the Report
produced by the SFC at the conclusion of its investigation. The Report
is a useful document in that it summarizes the material gathered in the
course of the SFC investigation, we emphasize however, that it is not
evidence.
We decided to serve Salmon "A" letters on two individuals:Mr. HWANG Chou-shiuan and
Mr. Peter SIN Kit-leung
In addition they were provided with a summary of the evidence which
was a .condensed version of the SFC Report. They have also received or
had opportunity to inspect all the relevant statements and documents.
10
Salmon UB" letters were sent torMr. FUNG Ka-pan - Chairman of Goodwill International
Holdings Limited
Mr. Sammy LEUNG Chi-chiu - a Director of Goodwill
International Limited
Ms Charlmane WONG Shu-man - Senior Manager of Goodwill
Capital in 1993
Ms Alice LEE Kwan-fong - Secretary to Mr. Sammy Leung
Ms Daisy LO Mee-lin - The personal Assistant/Senior
Secretary to Mr. C.S. Hwang
Mr. George WONG Kin-wah - Chairman of the HKPVG Board
of Directors
Ms Irene So - Dealing Director at Mansion House Securities
F.E.)Ltd.
Mr. JIANG Yun-long - General Manager of "UNIPEC" in the
People's Republic of China in 1993
4. Preliminary Hearings
All the Salmon letters were served on September 5th 1996.
The information in the letters included the date of the first preliminary
hearing which was fixed for September 17th.
On September 17th Mr. C.S. Hwang and Mr. Peter Sin were
represented by solicitors. The main purpose of the first preliminary
hearing was for the Chairman to make an opening statement and to
discuss a future timetable.
In so far as the opening statement dealt with procedural matters
we emphasized the following:i)
The Tribunal's function is inquisitorial rather than adversarial.
This is a fundamental distinction between an inquiry by a
Tribunal and conventional litigation. The distinction gives rise
to a number of consequences. For example, the Tribunal
11
directs the inquiry - it is empowered to investigate new matters
should they arise, provided they are relevant to the terms of
reference. Also, the Tribunal may adopt flexible procedures as
it sees fit. Rules relating to, for example, leading questions,
hearsay, examination on previous statements and the scope of reexamination are not applied with the same strictness as in
conventional litigation.
ii)
The role of counsel to the inquiry is to present the evidence
objectively, regardless of which way the evidence falls. He
does not however have to remain neutral throughout. If he
considers the evidence provides proof of insider dealing he
should employ his skills of advocacy in the usual way to that
end.
His role also involves a high degree of administration. For
example, he is responsible for the attendance of witnesses,
drafting notices to secure the attendance of witnesses, drafting
notices to require the SFC to carry out further investigation,
disclosing all relevant information to solicitors and counsel
involved in the inquiry, and generally ensuring that the inquiry
progresses as smoothly and fairly as is reasonably practicable.
To this end, it is sometimes necessary for counsel to the Tribunal
and the members of the Tribunal to meet in Chambers. Prior to
the commencement of the inquiry this is inevitable. After the
start of the evidence however, although it is necessary from time
to time, it should be kept to a minimum.
iii) We emphasized also that we were conscious of the fact that the
mere making of an allegation in a Salmon "A" letter could
adversely affect a person's reputation. We stressed that the
making of an allegation is never evidence of the truth of the
allegation. A person against whom an allegation is made may
have a complete answer to it. There is no burden of proof on
such a person (except by virtue of s. 10 CAP 395 to which we
shall refer in Chapter 7) and the Tribunal will make no judgment
until all the evidence has been heard and submissions made.
12
iv) We noted that the costs of inquiries such as this can become very
high. We stated that a balance between expediency and
focussing on the main issue on the one hand and not proceeding
at a pace which might prejudice the parties on the other was a
balance to be aimed for. We asked for evidence to be agreed
and put in writing whenever possible.
In addition to i) above we wish to add that the Tribunal is always
conscious of the danger that an excess of flexibility could disadvantage
an implicated person. Although it is important that the Tribunal retains
its inquisitorial function and its inquisitorial powers, it should not lose
sight of the fact that the recipient of a Salmon "A" letter is a person
against whom serious allegations of wrongdoing have been suggested
and against whom findings of such wrongdoings may be made.
Accordingly, should counsel to the inquiry form a view that the evidence
points to insider dealing by one or more persons then, inevitably, the
proceedings take on the characteristics of adversarial litigation. When
this happens this Tribunal would not wish to restrain counsel from
conducting the case with skills that had been developed and honed in an
adversarial atmosphere but on the other hand would not permit an excess
of flexibility to be utilized to such an extent as might be regarded as
unfairly prejudicing the implicated person. The need to be fair
overrides everything. Thus, in inquisitorial proceedings the tendency
to be flexible in matters of procedure and evidence gathering stops when
it ceases to be fair.
A second preliminary hearing was held on October 11th 1996 by
which time counsel had been instructed. At this hearing the date for the
commencement of the inquiry itself was fixed for October 23rd.
Therefore the lapse of time from the service of the Salmon letters to the
start of the inquiry was approximately 7 weeks.
The legal
representatives accepted this time frame but not without some reluctance.
From October 23rd onwards we heard evidence on 26 days. We then
adjourned for one week after which we heard submission and legal
argument which lasted 4 days. It was a "medium" sized inquiry. We
have some sympathy with the view that the implicated parties had a
relatively short time to prepare for the hearing. As it turned out the
parties were ready by the appointed day and the hearing started on
13
schedule. This is to the credit of all counsel and solicitors. Also to
their credit is the fact that many facts in the case were agreed (A
statement of the Agreed Facts may be found at Annexure B).
5. Procedure during the Inquiry
In Lord Justice Salmon's Report of 1966 he lists 6 cardinal
principles which should be followed in public inquiries. Principles 4-6
are:"(4) (The accused person) should have the opportunity of being
examined by his own counsel and of stating his case in public
at the inquiry.
(5) Any material witness he wishes called at the inquiry should if
reasonably practicable, be heard.
(6) He should have the opportunity of testing by cross examination
conducted by his own solicitor or counsel any evidence which
may affect him."
Counsel to the Tribunal called nine witnesses. He examined
them in chief. Counsel for the implicated parties had the right of cross
examination. Counsel to the Tribunal re-examined and finally the
members of the Tribunal had the opportunity to ask questions.
After these witnesses had given evidence the two implicated
parties gave evidence and they called a further four witnesses. For
these witnesses the procedure was reversed. They were examined in
chief by their own counsel.
Finally, two statements were included as agreed evidence and
one affirmation from Mr. Victor Hwang (son of Mr. C.S. Hwang) was
included in the evidence for our consideration. Mr. Victor Hwang is
resident in London.
At this stage reference should be made of one witness who was
served with a Salmon "B" letter who did not give evidence and whose
14
statement was not included in the evidence as an agreed statement. Mr.
JIANG Yun-long was at the material time the general manager of
UNIPEC and has at all material times been resident in Beijing.
Attempts to arrange his attendance in Hong Kong to give evidence before
us were unsuccessful. He was undoubtedly an important witness as he
was the person to whom Mr. C.S. Hwang spoke at dinner on the evening
of August 13th 1993 in Beijing about the placement. At one stage in
the inquiry all parties said they wanted him to come and give evidence.
Consequently every effort was made to secure his attendance.
We can only speculate as to the reasons for the breakdown in
communications which resulted in all parties and the Tribunal agreeing
that it would be fruitless to wait indefinitely in the hope that he would
attend.
In his final submission Mr. Ronny Tong, Q.C. urged us to place
some weight on some parts of his statement to the SFC. Whilst it is
open to us to attach such weight as we deem fit to a statement, even
unsworn, to the SFC we consider it dangerous to attach any weight of
any significance to the important parts of Mr. Jiang's statement. The
reasons for this are that his statement is controversial and unsworn and
we cannot exclude the possibility that his failure to attend to give
evidence was deliberate. (Although we realize also that it may have
been due to administrative difficulties, health problems or
misunderstanding - we simply don't know.)
15
In this chapter we will set out:
1)
Those parts of CAP 395 which have direct relevance to the
Parkview inquiry. In this chapter we will not elaborate on them.
We will refer to them in detail when we consider their
application to each of the key issues which we deal with in the
subsequent chapters.
2)
Some general legal principles which have been of particular
importance in our decision making process.
1. The Ordinance
Of the six different types of insider dealing which are set out in s.
9 of CAP 395 we are only concerned with s. 9(1 )(a) which states:
s. 9 When insider dealing takes place
(1) Insider dealing in relation to the listed securities of a corporation takes
place (a)
when a person connected with a corporation who is in possession of
information which he knows is relevant information in relation to that
corporation deals in any listed securities of that corporation (or in the
listed securities of a related corporation) or counsels or procures
another person to deal in such listed securities knowing or having
reasonable cause to believe that such person would deal in them;
In fact our inquiry is only concerned with the first half of s.
9(1 )(a) as there has been no suggestion that any alleged insider dealing
was counselled or procured.
The two key ingredients of s. 9(1 )(a) which concern us are
further defined in CAP 395:16
(i) "connected with a corporation" is defined by s. 4:4.
"Connected with a corporation"
(1) A person is connected with a corporation for the purposes of section 9 if
being an individual -
he is a director or employee of that corporation or a related
corporation; or
-
he is a substantial shareholder in the corporation or a related
corporation; or
-
he occupies a position which may reasonably be expected to give him
access to relevant information concerning the corporation by virtue
of-
i)
any professional or business relationship existing between
himself (or his employer or a corporation of which he is a
director or a firm of which he is a partner) and that corporation, a
related corporation or an officer or substantial shareholder in
either of such corporations; or
ii) his being a director, employee or partner of a substantial
shareholder in the corporation or a related corporation; or
-
he has access to relevant information in relation to the corporation by
virtue of his being connected (within the meaning of paragraph (a), (b)
or (c)) with another corporation, being information which relates to
any transaction (actual or contemplated) involving both those
corporations or involving one of them and the listed securities of the
other or to the fact that such transaction is no longer contemplated; or
-
he was at any time within the 6 months preceding any dealing in
relation to listed securities within the meaning of section 9 a person
connected with the corporation within the meaning of paragraph (a),
(b),(c)or(d).
17
It is common ground that the only part of s. 4 by which it could
be said that Mr. C.S. Hwang was a person connected to HKPVG or
Kompass International is s. 4(l)(c)i)
(ii) "Relevant information" is defined in s. 8
8.
"Relevant information"
In this Ordinance "relevant information" in relation to a corporation
means specific information about that corporation which is not generally known
to those persons who are accustomed or would be likely to deal in the listed
securities of that corporation but which would if it were generally known to them
be likely materially to affect the price of those securities.
The third ingredient which must be proved before a finding of
insider dealing can be made is that the person "deals" in the listed
securities. No issue has arisen in the Parkview inquiry concerning this
ingredient. Both Mr. C.S. Hwang and Mr. Peter Sin admit that their
agreed purchases of HKPVG shares on August 13th 1993 constitute
"dealing" for the purpose of the Ordinance,
The only remaining provision of CAP 395 which falls for our
consideration is s. 10(3):10.
Certain persons not to be held insider dealers
(3) A person who enters into a transaction which is an insider dealing shall
not be held to be an insider dealer if he establishes that he entered into the
transaction otherwise than with a view to the making of a profit or the avoiding of
a loss (whether for himself or another) by the use of relevant information.
This provides a defence to insider dealing. It arises only if a
transaction has been proved to the required standard to have been an
insider dealing. If so, once it is raised the burden of proof is on the
person who seeks to rely on it and that burden is discharged on a balance
of probabilities. If that burden is discharged the person will not be
identified as an insider dealer.
18
2. General Legal Principles
A. Standard of Proof
Since the decision of Mr. Justice Stock in the "Success Holdings
Limited" Report the standard of proof adopted in subsequent inquiries
has been proof "to a high degree of probability". We stated in our
opening statement that this would be the standard that would be applied
in the Parkview Inquiry. The SHL ruling adds that the degree of
probability has to be "commensurate with the occasion55 or
"proportionate to the subject matter'5.
The standard of proof should be simply stated and remain the
same throughout. It is a high standard of proof - not the highest
reserved for criminal allegations - but nonetheless high. It is not
appropriate to say that within a given inquiry the more serious the
allegation the higher the standard should be. The standard at all times
is high. "A high degree of probability55 refers to the top end of the civil
standard. It is set high because the issues are serious. A finding of
insider dealing against an individual is a finding of wrongdoing which
will adversely affect his or her reputation. It carries with it penal
sanctions and public obloquy.
Save as already referred to in Chapter 2 (s. 10 Defences) no
burden of proof lies on an implicated person.
B. Circumstantial evidence and inferences
It is more likely than not that proof that there has been insider
dealing will depend to a large degree on the drawing of inference from
proven facts. By its very nature insider dealing has conspiratorial
characteristics. People who set about to make a profit by insider
dealing do not do so openly, A person's "knowledge5' or "intention35 at
a material moment is likely to be significant and requires strict proof.
We have therefore directed ourselves carefully on the proper
approach when evaluating such evidence. We have directed ourselves
19
in the following terms:
We may infer from any of the facts which have been agreed or
proved before us the existence of some further fact. Such an inference
must be a compelling one - the sort of inference that no reasonable man
would fail to draw. It should be the only reasonable inference, which is
not the same thing as the only possible inference, which may be drawn
from the facts already agreed or proved to the required standard.
In this context our attention has helpfully been drawn to the
words of Lord Wright in Caswell v Powell Duffryn Associated Collieries
Ltd. [1940] AC152.
"Inference must be carefully distinguished from conjecture or
speculation. There can be no inference unless there are objective
facts from which to infer the other facts which it is sought to
establish. In some cases the other facts can be inferred with as
much practical certainty as if they had been actually observed. In
other cases, the inference does not go beyond reasonable probability.
But if there are no positive proved facts from which the inference
can be made, the method of inference fails and what is left is mere
speculation or conjecture."
C. Lies
A court hearing in which no lies are told is an endangered
species. This inquiry is no exception. As will be seen later in this
report we have concluded that on more than one occasion and in relation
to material issues we have not been told the truth. As it is open to us to
rely on a lie told by an implicated person as evidence in support of the
allegation against that implicated person we emphasize that certain
conditions must apply before a lie can be used in this way.
Accordingly our approach to the significance of "lies'5 in our
decision-making process has been to follow to the letter the observations
made at 4-28 (page 30) of the Public International Investments Limited
Report which we cite herein in full:-
20
"To the extent that we may decide that lies have been told to the
SFC or to this Tribunal we are conscious of the fact that there may
be reasons for lies consistent with absence of any wrongdoing, or of
the particular wrongdoing alleged, and that it is only if we exclude
such reasons that lies may support the allegation of that particular
wrongdoing. We are also conscious of the fact that although a lie
of itself proves nothing, save that the lie has been told, "lies can in
conjunction with other evidence tend to support an inference of
guilt in the sense that they can confirm or tend to support other
evidence which of itself is indicative of guilt ... we have ... borne
well in mind the question whether a lie may have been motivated
not by a realization of guilt of insider dealing, but by a realization of
guilt of some other wrongdoing or by a conclusion or fear (whether
justified or not) that certain conduct would be viewed by others as
improper, or by a feeling that the truth was unlikely to be believed ...
also that before a lie may be used to support a particular allegation,
we have first to be satisfied that the lie was deliberate, and that it is
material to the issue we have to decide".
D. Law/Fact
All matters of fact are decided by the Tribunal All matters of
law are decided by the Chairman. In this inquiry all findings of fact
have been made by the Tribunal's unanimous decision. In the absence
of unanimity the Ordinance permits findings based on a majority to 2 to 1.
Where decisions on law are referred to as "the Tribunal's decision5' it
should be implied that it has been on the Chairman's direction.
In deciding matters of fact the Tribunal acts as a jury of three.
One purpose of a Judge sitting with two members of the business and
professional community of Hong Kong is for the two members to bring
their experience and expertise into the decision making process. Juries
in criminal trials are often directed to use their common sense as men and
women of the world. Tribunal members have the added dimension of
being men and women of the financial and business world. We quote
from Phipson on Evidence 14th Edition page 32:"where a tribunal is composed of or includes specialists in the field
21
wherein the litigation arises, and that situation is brought about by
legislation specifically directed to that end, it may act on its own
knowledge. Thus, the lay members of an industrial tribunal may
use their own experience in assessing the evidence given by
witnesses. If that leads them to take a different view to that of a
witness, the witness should be given an opportunity of dealing with
the view of the tribunal: but the tribunal are entitled to prefer their
own opinion."
In this chapter we have only outlined the main matters of law
which have been relevant to this inquiry. As already referred to, we
shall consider some of them in much greater detail in the following
chapters.
The following chapters will contain our findings. They can be
conveniently dealt with under 5 headings (which approximately follow
the key issues set out at page 4 herein):Chapter 4 - Was Mr. C.S. Hwang a "connected person"?
Chapter 5 - What information would qualify as a matter of law as
relevant information on August 13th 1993?
Chapter 6 - What information did Mr. Hwang have - and did he know it
was "relevant" on August 13th 1993?
Chapter?- If there was an insider dealing transaction does s. 10(3)
apply?
Chapters- Mr. Peter SIN Kit-leung
22
CHAPTER 4
CONNECTED PERSON
Of all the issues in the Parkview inquiry the one that has caused
us the least difficulty is whether or not the evidence proves to a high
degree of probability that Mr. C.S. Hwang was, on August 13th 1993 a
person connected to HKPVG as defined by s. 4 of CAP 395. We are
satisfied that it does and we accordingly find Mr. C.S. Hwang to be a
"connected person" for the purpose of this inquiry.
We will summarize our reasons at the conclusion of this chapter.
First of all however we outline the evidence and submissions on either
side of the issue.
The part of s. 4 which applies to Mr. C.S. Hwang is that:
a
he occupies a position which may reasonably be expected to
give him access to relevant information concerning the
corporation by virtue of the professional or business
relationship existing between him and that corporation."
(A) In support of the proposition we have been reminded of a number of
matters:1. Mr. C.S. Hwang's office accommodation
When Mr. C.S. Hwang was Chairman, up until June 1992, of
Ming Ren Investments and Enterprises Limited his office, as
Chairman was on the llth floor of Worldwide House in Central,
Hong Kong. When he ceased to be Chairman no one moved into
this office. It is still his office today. The 11th floor premises are
now HKPVG's offices.
The company of which Mr. C.S. Hwang remains the Chairman,
namely the Chyau Fwu Group has its office suite in the Parkview
residential complex in Tai Tarn. At the invitation of Mr. C.S.
23
Hwang's legal representatives the Tribunal visited both premises.
As we understood it the main reason for the "view95 was to see the
relative sizes of the two offices as evidence that he was not a person
connected to HKPVG. As a result of the visit we acknowledged
that the Worldwide House office was indeed smaller than the
Parkview office in Tai Tarn (a fact which could have been agreed or
produced by way of a plan). In other respects however the result of
the view had the opposite effect on us from the one intended by Mr.
Hwang's legal team. Both offices were lavishly, tastefully and
expensively appointed. No observer could fail to be impressed by
either of them. The offices in Tai Tarn were vast and the office in
Worldwide House, bearing in mind its location in the city centre,
was also substantial.
In an attempt to distance Mr. C.S. Hwang from the Worldwide
House office we were told that it was left as it had been before he
resigned as Chairman as a "sort of shrine" to him and that his son
George had not moved in when he became Chairman "out of
respect55. We think that a person who was revered in this way and
who commanded so much respect is not a person who, in reality,
became disconnected from HKPVG overnight on the day he resigned
as Chairman in 1992.
Furthermore, as the evidence unfolded, we learnt that Mr. C.S.
Hwang used the Worldwide House office more frequently than
initially suggested. He told the Tribunal that it was his habit to go
there early each day before the other senior staff arrived. He was
also there at significant times over the week-end in question (August
13th - August 18th 1993) in connection with the placement at the
centre of this inquiry.
Whilst we accept the respect in which the sons held the father
we do not accept that this was the primary reason for C.S. Hwang's
office in Worldwide House being left in tact for his use after his
resignation as Chairman. We are satisfied that a more accurate
explanation is that although his title, on paper, may have gone his
authority, influence and power, in reality, continued.
24
Under this heading we mention two further matters which
contribute to our finding that Mr. C.S. Hwang was a connected
person.
Firstly, when the SFC team searched his office at Worldwide
House they found in a drawer of his desk a name card. Only Mr.
Hwang had the key to this drawer. The card is reproduced in
Annexure M of this report. The Chinese Characters for "Hong
Kong Parkview Group" and "Chyau Fwu Group" are the same. Mr.
C.S. Hwang explained that he allowed his son George, to use the
same characters and the same logo when the Parkview Group was so
named on its incorporation in late 1992. There was considerable
examination and cross-examination on the card which we do not
consider it necessary to recite. The simple point is that Mr. C.S.
Hwang's possession of this card in his desk is a small piece of
evidence in support of the contention that if Mr. C.S. Hwang had, in
truth, become wholly disconnected from Ming Ren, as it then was, in
June 1992 no action or conduct or effort was undertaken to
demonstrate this new state of affairs to the public. Mr. Ronny Tong,
Q.C. has urged that the public's perception of Mr. Hwang's position
in the company is not relevant. We agree in the sense that the
perception or opinion of the man in the street is not, on its own,
reliable evidence of Mr. Hwang's connection to HKPVG.
However we do place some weight on evidence of public
perception. If we find, on the whole of the evidence, that Mr. C.S.
Hwang is a person connected to HKPVG and we further find that the
public's perception supports this finding almost universally, then it
is open to us to conclude that the company approved of and even
encouraged the public to think this way. If the company wanted
him to be regarded as a connected person then that is a factor we
should properly take into account in deciding if s. 4(1 )(c) applies to
him. We consider this aspect more fully in the following pages.
Secondly, we note the evidence of how certain members of staff
and other business associates regarded him. Situated at the
Worldwide House premises, wearing HKPVG staff uniform was Ms
25
Daisy Lo. She was described by George Wong as Mr. Hwang's
Personal Assistant and the Senior Secretary of HKPVG. She was
the longest serving secretary of the company. In 1993 she worked
for both Mr. C.S. Hwang and George Wong. This is another minor
matter when looked at in isolation but it nonetheless a carries some
weight when assessing the overall picture. Why would someone
with no connection to Parkview have his secretary in Parkview
uniform at Parkview offices?
In evidence different witnesses described his connection to
HKPVG in various ways such as, "the boss", the "senior man", the
"role of a chief commander", "advisor to the board" and "the big
boss".
2. Involvement with HKPVG business
Concerning the placement of 89 million HKPVG shares to
UNIPEC, it was Mr. C.S. Hwang's evidence that when the subject
first came up for discussion with Mr. Jiang in Beijing he was
representing the family interests and was not negotiating on behalf of
the listed company. Ultimately, as we know, it was "Kompass"
who placed the shares to UNIPEC and HKPVG issued 89 million
new shares to Kompass at the same price upon Kompass*s
application for that amount.
The use of Kompass as an
intermediate vehicle was purely to facilitate the completion of the
placement to UNIPEC and was a very common mechanism for a
placement. Here then was an example of a business deal with Mr.
C.S, Hwang playing a crucial role which ended up as HKPVG
business.
As evidence that he was a person who would "reasonably be
expected to have access to relevant information ... by virtue of... a
business relationship existing between him and (HKPVG)" [as per s.
4(1 )(c)] we note similar instances of deals, since his retirement, in
which he was obviously involved which ended up as HKPVG
business. In effect his involvement after his "retirement", brought
business to the listed company. Some examples are:-
26
(i)
The Beihei oil refinery: Mr. C.S. Hwang accepted in evidence
that he was a party to negotiations concerning the possible
development of an oil refinery at Beihei. On one occasion a
newspaper article reported Mr. C.S. Hwang as having made an
announcement on behalf of the company in connection with this
project. We heard evidence that the press had "got it wrong".
We acknowledge, of course, that press reports are from time to
time factually incorrect and we would be wary in placing too
much reliance on an individual newspaper article. When
however we see a number of reports from different publications
which have a consistent theme, then the cumulative effect is that
they can and do provide support for the original contention,
namely that Mr. C.S. Hwang was actively involved in deals
which either were at the time or later became HKPVG business.
In the Beihei example a deal was later signed between the listed
company and UNIPEC.
(ii) The Hainan oil refinery: This provides a similar example.
According to a press report Mr. C.S. Hwang made a detailed
press statement about this project.
(iii) Indonesian oil: For several years Ming Ren had been involved
in a search for oil in Indonesia. The two projects above (Beihei
and Hainan) were possible refinery sites had the Indonesian
exploration venture been successful.
There was a connection between all of them. Mr. C.S. Hwang
was reportedly involved in all of them and HKPVG was
involved in all of them. The company which was set up to
pursue the Indonesian oil project was a company called
Superpower Resource Limited. Originally Superpower was
owned by Ming Ren Investments. In April 1993 it became a
joint venture project and one more share was allotted to
Superpower.
(iv) In November 1993 Mr. C.S. Hwang on behalf of Chyau Fwu
Investment Limited sold the premises at 11/F Worldwide House
(valued at HK$ 150 million) to HKPVG. Up until then HKPVG
27
had occupied the premises as Chyau Fwu's tenant.
(v) We quote two questions and answers from the evidence of Mr.
Peter Sin:"Q: ... had Mr. C.S. Hwang ever approached one of his sons
and told him that he had become aware of a business
opportunity which he thought they and the Parkview group
might usefully explore further ...
A: It happens very often.
Q: Can you give the Tribunal any examples?
A:For the vessels that travel between Hong Kong and
Shenzhen, that is a deal negotiated by Mr. Hwang with the
Mayor of Shenzhen; and also the property development
site in Yangpao of Shanghai, that was also referred by Mr.
Hwang; and also the placement of 20 per cent new shares
toUNIPBC."
When considering the weight to be attached to references in
newspaper articles which suggest to the reader that Mr. C.S. Hwang
is a person connected to HKPVG we have observed that the
company itself seems to have taken no steps to correct the
impression which, in this inquiry, they say is an incorrect
impression. We conclude that either the company did not want to
correct the impression or it was not a false impression at all.
Whichever it was the company was clearly content with the fact that
he was regarded as a connected person. Such an attitude by the
company is a factor which is relevant to ascertain whether or not the
definition in s. 4(1 )(c) fits Mr. C.S. Hwang. It is by no means
conclusive but is nonetheless a factor. In this context we also
recall the evidence of Mr. George Wong when he said words to the
effect that "titles are not important in this company". He was not
specifically referring to his father when he said this but it is
nonetheless telling.
28
3. Mr. C.S. Hwang's role in going to Beijing on August 13th 1993
We remind ourselves that to be a "connected person" he must
hold a position which may reasonably be expected to provide access
to relevant information .... In this context it is useful to consider
briefly, the circumstances of his trip to Beijing when he met Mr.
Jiang and some subsequent documentation relating to it. We say
"briefly53 at this stage because we will consider the trip in greater
detail in the following chapter.
As will be seen from our conclusions in Chapter 6 we have
found that Mr. C.S. Hwang had specific knowledge of the proposed
offer of a placement to UNIPEC before leaving for Beijing on
August 13th. It is in our view impossible to sustain an argument
that a person who was able to and did make such an offer was not a
connected person to HKPVG. Some time was spent in the course
of the evidence on the issue as to whether the placement was to be
an offer by HKPVG directly or whether the family company,
Kompass, would sell the shares. In either event it was Mr. C.S.
Hwang making the offer. On paper it would appear he had no
authority to represent either. He was a director of neither.
Nonetheless, the deal went through on Monday August 16th when
the HKPVG Chairman Mr. George Wong returned from Shanghai.
After landing at Kai Tak he was driven straight to Worldwide House
where, within a very short space of time, he approved the deal, as
Chairman. We consider that both his approval on the Monday
evening and the Board meeting on the Tuesday morning were mere
formalities. The deal itself, with Mr. C.S. Hwang as a prime
mover, had been effectively sealed before George Wong's return.
Finally, we note some further aspects of the evidence which
support the proposition of Mr. C.S. Hwang being a connected
person.
(a) Contemporaneous documents: The contents of documents
written soon after the placement have been closely examined in
evidence. It has been submitted that they contain mistakes.
Their meaning has also been carefully considered. Again, we
29
shall make closer reference to these documents later. However,
we simply list, at this stage, some extracts from correspondence
made at the time.
- The fax from UNIPEC was received at 11.09 a.m. on
Monday August 16th 1993. It was sent to Mr. C.S. Hwang
at HKPVG, 11/F Worldwide House. It reads "Reference is
made to the agreement between you and the undersigned
dated August 13th 1993,. We hereby agree to take up 89
million shares in the capital of your company ...."
- On September 21st 1993 a letter from HKPVG, signed by
George Wong was sent to the SFC in answer to certain
inquiries. It states, inter alia "Mr. George Wong ... Mr.
HWANG Chou-shiuan (father of Mr. George Wong) and Mr.
JIANG Yun-long ... commenced discussions on 27th April
1993 about various possibilities of mutual co-operation
between the company and UNIPEC in pursuing business
developments. On Friday 13th August 1993 Mr. JIANG
Yun-long contacted Mr. HWANG Chou-shiuan to indicate
UNIPEC5s interest in pursing the aforesaid matters. A
meeting was called the same afternoon at Beijing in which
Mr. Hwang and Mr. Jiang were present."
- On October 7th 1993 HKPVG's solicitors Messrs Richards
Butler sent a letter to the SFC, again in response to a request
for information. It said "during the period from 28th April
1993 to 12th August 1993 there were various discussions
between HKPVG and UNIPEC. However none of these
discussions concerned the placement of HKPVG shares to
UNIPEC. The discussions ... were of a general commercial
nature .... All of the discussions were with Mr. Jiang of
UNIPEC and HKPVG was represented either by Mr. George
Wong or Mr. HWANG Chou-shiuan ...."
(b) The timing of these "discussions" involving Mr, C.S. Hwang is
also important. Evidence was adduced that in December 1992
a proposed placement of 90 million HKPVG shares to another
30
company, also at $2.85 per share, fell through (see Annexure S).
Thus at the time of Mr. C.S. Hwang's (and others) discussions
with UNIPEC there was, in the background a desire of the
Hwang family, which was very likely a continuing desire, to
place out approximately 20% of the company and thereby inject
over HK$250 million into the company.
(c) In this context we also note that Mr. C.S. Hwang's evidence to
the Tribunal was different from what he had said in his
statement to the SFC. It is clear that his original intention was
to distance himself as much as possible from any prior
knowledge of the placement. Accordingly he told the SFC that
the very first mention of any placement was when Mr. Jiang
raised the subject at dinner in Beijing. In evidence however he
explained that he told Mr. Jiang that the net asset value of the
HKPVG shares was considerably higher than its trading price.
The conversation developed from there. It is highly probable
that he abandoned his original version because he realized it was
untenable.
(d) The air fares to Beijing for Mr. C.S. Hwang and his daughter
Sally Chen were subsequently paid for by HKPVG. The
company paid because the trip was related to HKPVG business.
(The invoice is at Annexure R in this report.)
(B) Against the proposition that s. 4(1 )(c) applies to Mr. C.S. Hwang we
have considered the following matters:As Mr. Tong, on behalf of Mr. C.S. Hwang correctly stated, the
evidence must show to a high degree of probability that Mr. C.S.
Hwang is connected to either HKPVG or Kompass. In either case
(proof of either will suffice) the relationship had to exist on August
13th 1993.
Mr. Tong emphasizes that the definition of a "connected person5'
in s. 4(1 )(c) refers to a position which gives him access to relevant
information by virtue of any professional or business relationship.
31
He makes the following submissions:(i) The relationship is a-family and personal relationship not a
professional or business one,
Whilst we agree that there are strong and obvious family ties
between himself and his sons, such ties do not exclude the fact
that such a relationship can be a business relationship as well.
The existence of the former does not exclude latter. Where
members of the same family work together in the same business
their personal and business relationship has to co-exist. In this
family based company we find that when Mr. C.S. Hwang
resigned as Chairman of Ming Ren Investments it did not mark a
sudden end to his business relationship with the company. The
strength of the family connection is such that it would be very
difficult to regard the personal and business relationships as
separate.
(ii) The evidence suggests that although Mr. C.S. Hwang was
involved in discussions with Mr. Jiang and UNIPEC prior to
August 13th 1993 those discussions were confined to the oil
business.
We do not accept this. By the very nature of Mr. C.S. Hwang's
role in HKPVG business since his retirement as Chairman we do
not think one can realistically compartmentalise the discussions
and negotiations in which he was involved. To say that on one
particular occasion he was wearing one particular hat and on
another occasion a different hat is not a realistic reflection of his
business life. Some people never completely retire - Mr. C.S.
Hwang is, in our view, such a man. As already mentioned,
although he was retired in name, he made daily visits to the
office at Worldwide House. To contend therefore that on
August 13th 1993 he went to Beijing wearing the Chyau Fwu oil
business hat and none other is not consistent with the true
picture.
(iii) It is argued that Mr. C.S. Hwang had no authority to act on
32
behalf of or represent HKPVG either in general or more
particularly in the placement to UNIPEC.
It is of course true that there was no official delegation by the
Board of Directors to empower Mr. C.S. Hwang to act on its
behalf. Our attention was also drawn to the evidence which
suggested that neither George Wong nor Peter Sin knew in
advance that Mr. C.S. Hwang would make an offer of a
placement to Mr. Jiang over dinner in Beijing.
Our response to this submission is substantially the same as
already stated in (i) and (ii) above. However, Mr. Tong makes
an additional point. He submits that even if Mr. C.S. Hwang
had been given the express authority to represent HKPVG on
August 13th then he still could not be regarded as a connected
person within s. 4(1 )(c) because the section expressly requires
the relationship between the person and the company to be an
existing one. He argues that only a pre-existing on-going
business relationship will suffice. We do not agree. An
"existing55 relationship is one that has come into existence at the
time of or at any time prior to the time of the dealing which is
alleged to be insider dealing. Existing means in existence. It
would be sufficient for example if the relationship had come into
existence by virtue of and only because of being given authority
to act on the company's behalf for that particular deal.
In our case of course the point is academic because we have
found that Mr. C.S. Hwang's unwritten power within the
company (power that may have been diluted but was not
dissolved at the time of his resignation) caused the necessary
relationship to exist.
(iv) It is submitted that the name card found in Mr. C.S. Hwang's
locked desk at Worldwide House is a "red-herring".
(v) It is submitted that the perception of Mr. C.S. Hwang's position
by the press is irrelevant.
33
We have dealt with points (iv) and (v) in the first half of this
chapter.
(vi) Finally, it is submitted that the use of the expression in s. 4(1 )(c)
that the position is one which "may reasonably be expected to
give him access to relevant information5' means that the
information must have been given to him by virtue of his
position.
Provided that it is remembered that the words must be read
together with those which precede them, namely "reasonably be
expected to" we agree with this submission. Put another way,
if his position is such that he is likely to be privy to inside
information then this ingredient of s. 4(1 )(c) is satisfied. We
deal with the issue of what information he actually had on
August 13th 1993 in Chapter 6. It will be seen that we have
concluded that the offer of the placement to Mr. Jiang over
dinner on August 13th could not have been a sudden frolic of his
own.
Conclusion
One has to look at the definition in s. 4(1 )(c) as a whole. If one
dissects it into small components and analyses each component
separately, one loses sight of the sort of relationship which the legislation
intended. By adding this more general sub-section i.e. (l)(c) after the
more specific categories in s. 4(1 )(a) and (b) it is plain that the legislation
intends to include in the definition of connected persons, persons who
are not connected by easily definable positions such as directors and
employees but are connected in some other more general way.
We have no hesitation in deciding that the position occupied by
Mr. C.S. Hwang on August 13th 1993 in relation to HKPVG was the
very type of relationship envisaged by this sub-section. The logical
conclusion of the submission advanced on behalf of Mr. C.S. Hwang is
that he was a connected person to Ming Ren Investments on June 3rd
1992 but was not on June 5th 1992. In view of the evidence we have
heard, with respect, that cannot be right.
34
CHAPTERS
RELEVANT INFORMATION - LAW
This chapter deals with the question of what constitutes
"relevant information" for the purposes of insider dealing as defined in s.
9 of CAP 395.
We start by repeating the statutory definition in s. 8 of CAP 395
which defines "relevant information" as:"Specific information about that corporation which is not generally
known to those persons who are accustomed or would be likely to
deal in the listed securities of that corporation but which would if it
were generally known to them be likely materially to affect the price
of those securities.55
The definition sub-divides into three parts and we will examine
the submissions on law made in respect of each three in order to
determine the test to be applied for each part in the context of this
inquiry.
The three ingredients which flow from the definition are>
(i)
It must be "specific55
(ii) It must be "not generally known to those persons who ... etc. ...."
(iii) It must be "likely materially to affect the price55
At the conclusion of this chapter we will state what information
Mr. C.S. Hwang and Mr. Peter Sin must have been in possession of at the
time of buying before a finding of insider dealing can be made. Text
books list examples of "information55 which has, on the facts of each case,
qualified as relevant information. So, in this chapter, our task is to say
what sort of information, as a matter of law, should be included in such a
list.
35
1. "Specific"
We are concerned in the Parkview inquiry with information
relating to a placement. By the evening of Monday August 16th 1993
the placement was finalised upon approval by George Wong. The
material details were that it was with UNIPEC (a PRC oil conglomerate)
for 89 million HKPVG shares at $2.85 per share. The method of the
placement was by the "top-up" method through Kompass whereby the
shares would be sold by Kompass who would then subscribe for 89
million new shares to be issued by HKPVG.
The starting point of Mr. Tong's submission is that to qualify as
relevant the information known at the time of dealing must have
consisted of, at least, the above details. His first submission is that no
relevant information had come into existence until the evening of
Monday August 16th when HKPVG5 s Chairman, Mr. George Wong
formally approved the deal. As a fall back position he submits that if
(which he does not accept) relevant information could have been in
existence on Friday 13th it must be knowledge that the placement in its
detailed form was about to be offered together with knowledge that its
acceptance was a mere formality - a virtual certainty.
Mr. Marash submits the test need not be so precise. In our
legislation only the word "specific55 appears whereas the definition in
U.K. legislation includes the words "specific or precise55. It is generally
accepted that the definition of specific includes information which may
be precise but it does not have to be precise to be specific. Non precise
information can be specific. Non precise specific information can be
even vague provided it is not mere rumour.
In the text "Insider Dealing55 2nd Edition by Brenda Hannigan
she cites, at page 63, as the best example of information which is specific
as knowledge of an impending take-over bid. She goes on to say:"Equally specific would be knowledge of a forthcoming share
placing even if the details were not known.55
36
The authority she cites in support is R v. Cross [1991] IBCLC 125. a
decision of the Court of Appeal in England. There was much debate in
our inquiry as to whether R v. Cross was in fact an authority for such a
proposition or not. Mr. Tong submits that it is an authority for the
proposition that information that a placement is about to be made is
price-sensitive information but it is not authority for the proposition that
it is specific information.
He observes in further support that in s. 9(1)(b), (d) and (f) of
CAP 395 which are sub-sections which deal with take-over situations,
the word "contemplated" is included. Whereas in sub-sections (a), (c)
and (e) the word "contemplated" does not appear. Therefore, he argues
that a contemplated placement without further details should not be
regarded as specific information.
He directed our attention to authorities from a variety of
jurisdictions. The cases referred to included:Green v. Charterhouse Group Canada Ltd. [1973] 35 DLR 161 and
[1976] 68 DLR 592, the latter reference being the decision on
appeal by the Ontario Court of Appeal.
Ryan v. Triguboff [1976] 1 A.C.L.R. 337 - a successful appeal in
the New South Wales Supreme Court against a Magistrates
conviction
Commissioner for Corporate Affairs v. Green [1978] V.R. 505
(Supreme Court of Victoria). Another Magistrates appeal
Charles Chan Sing-chuk v. Innovisions Ltd. [1992] 1 HKLR 254
CA,
On the cases generally we make a few cautious observations.
Firstly, the exact words of the statutes which were under discussion in
these cases were not always the same as each other nor the same as H.K.
legislation.
For example the Supreme Court of Victoria was
considering a section which did not require the information to be
"specific". In Canada the decision concerned a person making use of
37
"specific confidential information". Secondly, each counsel was able to
extract different parts of the various judgements both in support of and in
opposition to a given proposition. Thirdly, the facts of the cases were
in general complex and in one particular case, extremely complex.
Each is a decision on its own facts (none of which could be said to be
strikingly similar to our case) and whilst this Tribunal finds them helpful
and of interest, bearing in mind their status as authority is no more than
"persuasive", we are unable to glean from them any ruling which is of
obvious and direct application to the facts of our case.
There are a number of facts which are peculiar to our case which
inevitably have an influential bearing on how we determine what
information passes the test of relevant information on Friday August 13th
1993. Such factors, if proved, include
-
the placor was a H.K. 2nd or 3rd liner stock
-
the placee was related to very large PRC oil companies.
UNIPEC was a joint venture company formed between
SINOPEC (China Petrochemical Corporation) and SINOCHEM
(The China National Chemicals Import and Export Corporation)
-
the placement involved a substantial sum of money which would
result in an injection of cash in excess of HK$250 million to
HKPVG
-
at the material time (mid 1993) there was a positive sentiment
among investors in the Hong Kong market which favoured
"China concept" shares
-
the time frame within which the placement was negotiated,
offered, finalized and announced.
Accordingly, a detailed examination of the cases would not
serve a useful purpose. The decision in R v. Cross was the centre of
most of the debate between counsel. Brenda Hennigan cites it in
support of a particular example of information being specific. Mr.
Marash argues that it is an authority for such a proposition. Mr. Tong
38
argues that it is not. This Tribunal accepts that as an authority for a
particular proposition (viz. that knowledge of a forthcoming placement is
specific information even if the details are not known) it is not a perfect
authority. The distinguishing features which Mr. Tong highlighted are
valid. However it does not follow that the proposition Is wrong. A
good authority is not a pre-requisite of a good proposition, especially
when dealing with relatively recent legislation. This Tribunal considers
the proposition in general terms to be correct. However it need not
apply in every case. We respectfully venture to improve the text by
adding one qualifying word and also by adding one further condition.
Firstly, the words "capable of should be inserted as follows:
Knowledge of a contemplated placement is capable of being specific
information even if the details are not known.
Secondly, these conditional words should be added "provided
that the offeror has reason to believe that the offer will be accepted".
This does not go as far as Mr. Tong urged in his alternative
submission, namely that there should be a very high degree of probability
of acceptance. Nor does it accord with Mr. Marash who submitted that
mere knowledge of a contemplated placement would suffice.
In conclusion if there is evidence which satisfies the Tribunal
that Mr. C.S. Hwang and/or Mr. Peter Sin, at the times they dealt, were in
possession of information that Mr. C.S. Hwang on behalf of HKPVG
would offer Mr. Jiang on behalf of UNIPEC a substantial placement of
shares and that Mr. C.S. Hwang had reason to believe that the offer
would be accepted, then the information they possessed was specific for
the purposes of s. 8 and s. 9(1 )(a) CAP 395.
2. "Not generally known ..."
To be relevant it must be "not generally known to those persons
who are accustomed or would be likely to deal" in HKPVG shares.
No issue has arisen in this inquiry that the information may have
been generally known at the time of dealing. It is common ground that
39
if any relevant information did exist it must have been confidential
information which had not been released to the public.
The second half of this ingredient, namely "persons who are
accustomed or would be likely to deal in the listed securities of that
corporation", was canvassed by Mr. Tong in his final submissions. He
submitted that the group of people envisaged by this phrase is the
ordinary reasonable investing public ascertained objectively and not
confined to a particular group. We agree. It should be observed that
the definition concludes with the words "the listed securities of that
corporation". It could be successfully argued that some stocks are
simply never considered by some classes of dealer. That argument
could only rarely be sustained. It does not arise in this case. If
HKPVG shares are shares which from time to time are bought and sold
by small investors on the one hand and also fund managers and
institutional buyers on the other, then the investing public at large is what
is envisaged by this part of the definition.
Accordingly the information ceases to be "relevant information"
for the purposes of insider dealing when it is publicized. In our case
nothing turns on when that moment is because on any view the alleged
insider dealing took place days beforehand. It is nonetheless a matter of
fact and accordingly we will deal with it in the following chapter.
3. Likely materially to affect the price of those securities
Under this heading we emphasize at the outset that we are
concerned here with the information in possession, if any, of those who
dealt at the time they dealt. We are conscious of the fact that there are
at least some differences between the information which was ultimately
made public and the high water mark of the information which may have
been available on the Friday morning. We are only concerned with the
latter. Thus we take as our starting point when deciding the law relating
to the "materiality" issue the test we have laid down in part 1 of this
chapter. The question therefore is - is information, known on Friday
13th 1993 in the morning, that Mr. C.S. Hwang was going to offer Mr.
Jiang on behalf of UNIPEC a substantial placement of shares and that Mr.
C.S. Hwang had reason to believe that it would be accepted, information
40
which was likely materially to affect the share price?
The evidence and our findings in relation to this issue are more
fully dealt with in Chapter 6. It is necessary however to touch on some
of the factual matters when considering the legal aspects.
Our attention was drawn first of all to the oft quoted passage on
the Malaysian case of Public Prosecutor v. Alan Ng Poh Meng [1990] 1
MLJ in which SDJ Foenander elaborated on the same phrase in the
following way:"Information that is likely materially to affect the price is
information which may well materially affect the price. Put
another way, it is more likely than less likely that the price will be
affected materially. The further element of the statutory test
concerns materiality .... It may be that what is a material price
increase in one case may not necessarily be a material price increase
in another case. It all depends on the share and the circumstances
obtaining at the time. However, the standard by which materiality
is to be judged is whether the information on the particular share is
such as would influence the ordinary reasonable investor, in
deciding whether or not to buy or whether or not to sell that share.
A movement in price which would not influence such an investor,
may be termed immaterial. Price is, after all, to a large extent
determined by what investors do. If generally available, it is the
impact of the information on the ordinary reasonable investor, and
thus on price, which has to be judged in an insider dealing case.55
Quoting this passage Mr. Tong submits that the evidence of Mr.
Alex Pang (who headed the surveillance unit at the SFC at the material
time) is of no assistance to the Tribunal because he merely interpreted
the causes of the share movement after the announcement on Tuesday
17th August i.e. it was with hindsight and was not an evaluation of what
effect the information known on Friday 13th would be likely to have had,
had it been known to the public at that time.
There is some merit in his criticism. However it is based on the
premise that "the information" alleged was merely that an offer was
41
going to be made whereas the information announced on the Tuesday
was that an agreement on a placement had been reached.
Our ruling (p. 39 supra) however is that the minimum
requirement to satisfy the test of "specific" is that the "information" must,
additionally, include a "reason to believe that the offer would be
accepted". The question therefore becomes this - was there a real
likelihood that the investing public would react, so as materially to affect
the price, if it were known that an offer was going to be made and the
offeror believed that agreement would be reached. When testing,
objectively, the likely public reaction it is therefore reasonable to start
with the premises of a forthcoming successful placement rather than a
forthcoming possible placement. It is on this basis that we will decide,
in the next chapter, what inferences can be properly drawn from the
evidence particularly that of Mr. Alex Pang and Mr. Andrew Biggs.
Of course there can be no certainty about what will happen to
the share price in the future. Both Mr. Pang and Mr. Biggs have
considerable knowledge and experience about H.K. stocks. Using that
knowledge and experience they are able to make a valuable assessment
of the likely effect on the share price. However, it can, necessarily only
be an assessment. The P.LI.L. report at p. 239 puts it as follows:
"The test is hypothetical in that on the date that the insider acts on
insider information, he acts when the investing public, not in
possession of the insider information, either does not act, or acts in
response to other information or advice.
The exercise in
determining how the general investor would have behaved on that
day, had he been in possession of that information, has necessarily
to be an assessment. It is true that an examination of how those
investors react once the information is stripped of its confidentiality
and becomes public knowledge, will often provide the answer,
although care must be taken to ascertain whether the investors'
response is indeed attributable to the information released, or
whether it is wholly or in part attributable to other events, or
considerations."
So, now that we have made a ruling as to what amounts, in this
42
case, to specific information and now that we have defined the test of
materiality, our next task is to determine as a question of fact whether the
information he had at the material time passes the test of being relevant.
Knowledge.
Before moving on to consider the facts the final matter of law, in
this chapter (we deal with the law relating to the s. 10(3) defence as a
separate issue in Chapter 7), concerns the question of knowledge.
If we decide that relevant information as defined by s. 8 existed
at the time of the alleged insider dealing we must return to the definition
of insider dealing in s. 9(1 )(a) and remind ourselves that the evidence
must show that the dealer "knew" that the information in his possession
was relevant information. Did C.S. Hwang or Peter Sin know on Friday
13th August that the fact that an offer was going to be made and had
reason to believe would be accepted was a fact which, if generally known,
would have a real likelihood of materially affecting the price? The
question is not did he know the price would go up, the question is, in
short, did he know he was privy to specific price sensitive information?
The test of "knowledge" is a subjective test. It is usually
determined by inference. If it is part of a man's case that he did not
know something there is unlikely to be any direct evidence of what he
did actually know. One has to examine the surrounding circumstances
and consider what events occurred before and after the material time to
see if they throw any light on what he truly knew. Our attention has
been drawn to authorities in criminal law on the meaning of "knowledge".
We accept that as the Ordinance uses the word "knows" on its own and
does not, as it could have done, add words such as "or believed", then
only actual knowledge will suffice. Thus the evidence must satisfy us
that it was highly probable that he knew the information in his
possession was relevant.
43
CHAPTER 6
RELEVANT INFORMATION - THE FACTS
The events of the morning of August 13th 1993 are undoubtedly
the most crucial part of our inquiry. What happened and where and in
whose presence are key factors from which inferences may be drawn
concerning Mr. CS. Hwang's knowledge at the time he instructed his
broker to buy one million HKPVG shares.
It is an agreed fact that the order was placed in the morning on
August 13th. It is agreed that a total of 974,000 shares were bought by
a number of lots purchased throughout that morning and afternoon. It is
agreed that Mr. C.S. Hwang and his daughter Sally Chen left Hong Kong
on his way to Beijing at 12:09 p.m.
In this chapter we make our findings in relation to a number of
other matters which are not agreed and about which we have heard
conflicting evidence.
It is suggested that Mr. C.S. Hwang attended a meeting during
the morning of August 13th at his office in Worldwide House. It is
suggested that, at least Mr. K.P. Fung was present at the meeting and that
the purpose of the meeting was to discuss the forthcoming placement
which, at the time, C.S. Hwang knew was to be with UNIPEC. Mr. C.S.
Hwang's evidence is that there was no such meeting because the question
of a possible placement did not arise until it was mentioned by chance at
the dinner in Beijing with Mr. Jiang on the evening of August 13th.
The first question to be answered therefore is:A. Was there a meeting in the morning of August 13th 1993?
The Tribunal is satisfied that the evidence proves to a high
degree of probability that a meeting did take place on this morning
at which, at least, Mr. C.S. Hwang and Mr. K.P. Fung of Goodwill
were present. The witnesses whose evidence, in part, touched on
this question included C.S. Hwang, Peter Sin, K.P. Fung, Sammy
44
Leung, Charlmane Wong, Alice Lee, Sally Chen and George Wong.
There were differences in everybody's recollections. Simply
because the totality of the evidence results in a confusing picture
does not mean that we cannot make a firm finding of fact. This is
particularly so when we conclude, as we do, that one of the reasons
for the confusion is a desire on the part of some of the witnesses to
conceal the fact that there was such a meeting and not solely
because of poor recollection on the part of all the witnesses.
We highlight those parts of the evidence which have made
the most significant contributions to our coming to this conclusion.
(i) Mr. K.P. Fung's evidence
Mr. K.P. Fung and Mr. C.S. Hwang had known each other
for many years. They were friends. There is no doubt that
K.P. Fung met C.S. Hwang in connection with the placement.
He was Mr. Hwang's financial advisor and had been, either
formally or informally, on many occasions in the past. Mr. K.P.
Fung told us that prior to mid August 1993 he and Mr. C.S.
Hwang had often met for business purposes. As to the date on
which they first met to discuss the placement Mr. Fung's
evidence to the Tribunal differed somewhat from what he had
said to the SFC when he made his first statement to them.
His first interview was on November 18th 1993, 3 months
after the events about which he was being questioned. His
evidence to the Tribunal included his confirmation that the
November 18th statement contained the truth as best he could
remember it at that time. The statement contains the following
passage:"In mid-August, the Director of Corporate Finance, Sammy
Leung and I went to Parkview to have a meeting about the
technical matters about the placement and the procedure for
the notice to be put up as required by the SEHK rules.
The meeting was in a great hurry. As I remember, on the
day, the people present might include George Wong, the
45
son of Mr. Hwang and Peter Sin. After the meeting was
over Mr. Hwang said he had to leave Hong Kong. He was
in a hurry to catch a plane. Mr. Hwang didn't say he
wanted to place shares. He only asked me about the
procedures. Therefore I didn't know who the placee was.
It should be 2-3 days later. It was only when Mr. Hwang
came back from Beijing did I know the placee is UNIPEC."
When giving evidence before the Tribunal his recollection
about the date of the first meeting and the number of meetings
he attended was more vague and uncertain. He said his actual
memory on the first meeting was quite confused. He said that
since making his first statement and as a result of discussing the
events with Sammy Leung he was relying on Sammy Leung's
recollection (Sammy Leung on the other hand, in evidence, said
that he was relying of K.P. Fung's recollection). In answer to
Mr. Marash he confirmed that there must have been 3 meetings
on the matter but in answer to Mr. Tong he said he had only
attended 2 meetings. In re-examination by the Tribunal he
agreed there could have been a meeting on the 13th but finally to
Mr. Tong again, said he "I don't think so".
We will refer as this chapter progresses to the evidence and
statements of other witnesses on this issue.
We have
considered it all. In concluding that there was a meeting in the
morning on Friday 13th we have taken into account on K.P.
Fung's first statement to the SFC. We accept that it does not
accord with his evidence in court but it does assist us decide
where the truth lies.
Even in an inquiry such as this where the rules of evidence
are not applied with the same strictness as in conventional
litigation, placing reliance on a previous inconsistent statement
should only be done with caution. Such a statement is clearly
relevant to the issue of the witnesses' credibility. Here, we
take it one stage further because we find that particular parts of
the content accurately reflect what happened. The statement
was made nearer the material time and was "the truth as best he
46
could remember it at that time".
The "particular parts95 to which we refer are that:
- "the meeting was in a great hurry"
- "he had to leave Hong Kong. He was in a hurry to
catch a plane53
- "he only asked me about the procedures'5
Mr. Fung could not have been confusing Mr. Hwang's
desire to catch a plane in a hurry with any other occasion other
than his departure to Beijing on Friday 13th. Mr. Hwang made
no other trips at that time about which any confusion could have
arisen.
Furthermore he recalls the first meeting as one where
technical procedural matters only were discussed. This is only
consistent with a meeting which took place before the offer was
made to and accepted by UNIPEC. It is clear to us that a
preliminary meeting at which no details about volume, price, the
identity of the placee or the placement method took place.
Such a meeting would not and did not occur after Mr. Hwang's
return from Beijing. Mr. Fung confirmed also, in evidence,
that after his first meeting he did not take any steps, such as
issuing instructions to prepare documentation, because it was a
preliminary meeting.
Details, such as price and placee, and instructions to prepare
documentation would naturally occur once Mr. Hwang had come
back. There is no doubt that Sammy Leung gave Charlmane
Wong instructions to start drafting the documentation at about
lunch time or early afternoon on Saturday 14th. Sammy Leung
told us these instructions followed his first meeting on the matter.
If this was his first meeting it means that he had not been at the
meeting on the previous day. If he was at the meeting the
previous day he has either forgotten about it or chosen not to tell
us about it. In evidence he said he had no recollection about
any conversations or references to being in a hurry to catch a
47
plane. As we have said, such a conversation could only have
been on the Friday. If he had not been there he would not have
heard it. However his explanation for not remembering was
that sometimes Mr. Hwang speaks in Mandarin and if so he
would not have understood it. There was no suggestion that
K.P. Fung and C.S. Hwang ever talked to each other in
Mandarin. We regarded his reference to the possibility of their
conversing in Mandarin as an unnecessary addition by Mr.
Sammy Leung consistent with his desire to distance himself
from both the fact of and his attendance at the Friday meeting.
It is not necessary for us to make definitive findings of fact
about who was In attendance at the Friday meeting once we are
satisfied that, at least K.P. Fung and C.S. Hwang met. A
"meeting" in this context does not mean a formal "round the
table" gathering. It means no more than at least two people
discussing a matter together. It is interesting to note that on
more than one occasion later correspondence on the matter refers
to George Wong being present at an early meeting. Where the
correspondence refers to that meeting as being on the 14th it is
agreed by all that George Wong could not have been there
because he had gone to China on that day. However he was in
Hong Kong on Friday 13th and if the correspondence was
referring to the first meeting George Wong could have been in
attendance. As Chairman of HKPVG it would have been
logical for him to be there.
(ii) Mr. C.S. Hwang's account:
Having found as a fact that there was a Friday meeting we
must now consider Mr. C.S. Hwang's evidence as to what he
said he did that morning. It is fundamental to his evidence that
there was no meeting. In the same context we consider his
evidence as to why he went to Beijing that day.
The tickets had been booked a day or so earlier by Mr.
Hwang's secretary, Daisy Lo. The tickets must have been
booked on an earlier day because both C.S. Hwang and Sally
48
Chen described their original plan to catch a flight at about 8,00
a.m. on Friday 13th. When they awoke on the Friday morning
they both knew they were going to Beijing that day. Their
early departure was only delayed because Sally had to renew her
visa in the morning. This version, which we accept, is
inconsistent with the account given in the Richards Butler letter
of October 7th 1993 in which it is stated "Jiang contacted Hwang on Friday 13th August 1993 by
telephone to set up a meeting to discuss a potential oil
contract in Indonesia. It was agreed that a meeting be held
in the afternoon of the same day subject to flight
availability.55
We are satisfied that the tickets were booked in advance because
Mr. C.S. Hwang's trip to Beijing was planned in advance of the
13th.
He told us that the purpose of the visit was twofold: firstly
to see Mr. Jiang and explain to him that the Beihei oil refinery
project had fallen through and secondly to visit the grasslands of
Mongolia with his daughter, Sally Chen. He had served as a
soldier in Mongolia some 40 or 50 years earlier and wanted to
revisit the area. The Tribunal rejects his evidence on both these
matters.
Our reasons for rejecting the explanation concerning the
Beihei refinery are firstly because he never mentioned it to the
SFC when they interviewed him. It is surprising that when he
was interviewed by the SFC he gave no explanation relating to
business at all for his trip to China. He knew that he was being
interviewed in connection with an investigation in which the
reason for his trip to China would play a very important part and
yet his only explanation was that it was part of a sentimental
journey. It is only later, after realizing the implausibility of this
explanation as the sole reason for the trip that the Beihei
explanation is given in evidence. Secondly, there is no logical
explanation for C.S. Hwang to travel to Beijing to have dinner
49
with a representative of UNIPEC so as to tell him why a project
had fallen through. Such matters could easily have been dealt
with by correspondence, fax or telephone or a combination of all
three not in the manner suggested by Mr. Hwang.
Our reasons for rejecting the Mongolia explanation are
these:
(a) Mr. Hwang says that the reason he and Sally did not
actually go to Mongolia that week-end was because the
placement matter came up during conversation with Mr.
Jiang during or soon after dinner in Beijing and
therefore he decided to change his plans and return to
Hong Kong urgently the next day. Therefore up till
about 8:00 p.m. on the Friday evening the trip was still
on. However no plans or inquiries had been made.
They had no tickets to go there from Beijing, they had
not made any inquiries with travel agents either in Hong
Kong or Beijing about travel times, hotels, visas etc.
With all Mr. C.S. Hwang's connections in the travel
business one would have expected some preliminary
arrangements to have been made in Hong Kong before
they left. Having arrived in Beijing at about 4:00 p.m.
for a trip which was only intended to be a 2-3 day tour
at most it would then have been natural to make
arrangements for the Saturday and Sunday in the
afternoon of Friday 13th, in Beijing, at the latest. Sally
Chen was there for that very reason plus as a companion
in case there were any problems concerning Mr.
Hwang's health.
(b) Mr. Hwang said he changed his mind about going to
Mongolia at about midnight. He therefore did not
wake up Sally to tell her but waited till he awoke the
next morning. In order to catch an early plane at about
8:00 a.m, he woke up at about 5:00 a.m. or even earlier
and then woke Sally to tell her about the change of
plans. Strangely though he did not tell her why the
50
plan had been so abruptly changed. According to
Sally's evidence she was never told why her trip to
Mongolia was aborted - even when they sat next to each
other on the return air flight.
Furthermore, the
sentimental journey to Mongolia has never been revived
or ever mentioned as a possibility since.
%x
If, as Mr. Hwang told us the placement was first
mentioned after dinner in Beijing and if, as Mr. Hwang
told us, he considered it a matter which necessitated a
complete reversal of plans we fail to understand why he
did not tell Sally of the new arrangement that night.
We believe the reason was that there was no "new
arrangement". It was always intended to be a one
night visit.
(c) There was also a stark conflict of evidence between Mr.
C.S. Hwang's version and Sally's version of what they
did on the Friday morning before going to the airport.
It was common ground that Sally had to get a new visa.
Her evidence was that she could not recall which
building she went to in order to apply for and get a new
visa but she did recall that her mother and father waited
with her in the waiting room whilst it was being
processed.
The chauffeur waited outside.
Mr.
Hwang however did remember which building it was - it
was the China Resources Building in Wanchai but he
recalls that he waited in the car together with his wife
and the chauffeur for at least an hour. We have been
told that it is possible to get a visa for China in about
one hour. Even if Sally was fortunate to get one so
quickly we do not think that Mr. C.S. Hwang is the sort
of person who would wait in the waiting room or in his
car not knowing how long it would take. The two
different versions have one thing in common. They
keep Mr. Hwang away from his office in Worldwide
House. However quickly Sally got her visa we are
"*<&.
sure that at that time Mr. Hwang was in discussion with
;
*\
Mr. K.P. Fung at least.
(d) If the first mention of the placement was made on the
Friday evening and, as Mr. Hwang suggested, it was
only in general terms we find this inconsistent with his
desire to return to Hong Kong as a matter of urgency
and cancel the main reason for the visit. The little and
general information he had gathered over dinner could
easily have been passed on to Peter Sin or other
executives of HKPVG for them to deal with in Hong
Kong.
To conclude this issue we have formed the certain view that
the Mongolia trip was first raised to conceal the true reason for
the journey. As a piece of untruthful evidence we infer from it
simply that the real reason, bearing in mind that there was a
Friday morning meeting, was to discuss the forthcoming
placement which had a reason to believe would be accepted. It
is not a piece of untruthful evidence from which we make an
inference of insider dealing but we do draw the inference of fact
that the true reason for the journey was as we have stated.
(iii) Contemporary documents:
Once again it is helpful to examine documents created at the
time, in this context, to see if they throw light on the issue of
whether a meeting took place on Friday morning, August 13th.
On August 20th 1993 Goodwill Capital received an inquiry
from the SEHK (Annexure H) in which their first question
was:"l)When did the negotiation on the placement and the
subscription start and what parties were involved?"
The first draft of Goodwill's response was prepared by
Charlmane Wong. It is dated August 20th but it was never
sent because its contents were amended. This first draft is at
52
Annexure I. As can be seen it contains crossings out and
handwritten notes. The second amended version, which
ultimately went out on August 31st is at Annexure J.
The opening remarks in Annexure I are:'The discussion on the placement and subscription
commenced on Friday 13th August. A meeting was held
in the morning between the company (Mr. HWANG
Chou-shiuan and Mr. Peter Sin) and Goodwill Capital
Limited (Mr. K.P. Fung and Mr. Sammy Leung).
The amended version reads:"Formal discussion on the placement and subscription
commenced on Friday 13th August 1993."
It is submitted on behalf of Mr. C.S. Hwang that no weight
should be attached to the first draft because it was never sent
out because it contained mistakes which were amended. It is
further submitted that the opening sentences of the amended
version refers to the meeting in Beijing in the evening. If the
purpose of the amendment was to tell the reader that the first
discussion on the placement took place in Beijing - on Friday
evening - between Mr. Hwang and Mr. Jiang, it is surprising
that the document did not say so. It is also surprising that the
"mistakes55 in the first draft were not specifically corrected.
The first draft says it was "in the morning". The second draft
does not say it was in the evening. The first draft could only
mean that the meeting was in Hong Kong. The second draft
does not say it was in Beijing. The first draft states who was
present (in answer to the question •- "what parties were
involved?55). The second draft is silent on the subject of who
took part in the discussion.
In the course of the evidence much was said about who
made the alterations, who saw them, on whose instructions
they were, what they meant and so on.
53
Charlmane Wong prepared both documents. She said she
consulted Sammy Leung before the first draft. We do not
accept the suggestion that some of the information contained in
the first draft may have been as a result of her own guesswork
or assumption.
We note here, that when drafting the
announcement of the placement on the 14th and 16th August
she put, for example "X" Co. or "Y" Co, when she did not
know the identity or it had to be excluded for security reasons.
We believe that she would not have included any information
unless she had been given the information or it was within her
own knowledge. This of course begs the question as to
whether the information was correct or not. However a
phrase such as "in the morning" would not have been included
without a reason.
The first draft was sent to Peter Sin for his perusal and
comment before it was sent to the SEHK. Sammy Leung
signed the fax cover on which is typed:"We enclose a letter from the Stock Exchange containing
some inquiries into the placement and our draft reply to
the letter. Please peruse our draft reply (especially
point(l)) and give us you comments on it, if any, before
we submit it to the Stock Exchange."
We do not accept Sammy Leung's evidence that he did not
read the draft when he signed the fax cover sheet. We are
satisfied that the only reasonable explanation for the fact that
the typed request specifically refers to "point (I)53 is that he
knew what answer had been written to point (1). It logically
follows that he had made no attempt to alter it himself albeit
knowing what it said.
Our final analysis is that, although we are careful not to
place undue weight on the first draft on its own as evidence of
what happened on the Friday morning, we do find that the
combined effect of both documents and the witnesses5
54
comments thereon, does add weight to our conclusion that
there was a Friday morning meeting.
What information did he have at the time of the morning meeting on
Friday 13th?
Having established that a meeting took place and having
established that the only reasonable inference to be drawn from the
fact of the meeting is that its purpose was in connection with the
forthcoming placement, we must now consider the extent of C.S.
Hwang's knowledge at that time.
If the extent of his knowledge was that he had decided to go to
Beijing, arrange a meeting with Mr. Jiang when he got there and then
offer him a 20% placement in HKPVG without any previous
discussions and having no idea whether Mr. Jiang would find the
offer attractive or not then such knowledge would fall short of the
test we have laid down as to what, in this case, qualifies as relevant
information.
We are satisfied that the information he had was greater than this.
Our conclusion is based on a common sense evaluation of the
evidence of what was happening generally before the 13th and the
pace at which things developed after the 13th. These two things
must be considered together and not in isolation of each other.
(i) Before the 13th:
We have already made findings in Chapter 4 about Mr. C.S.
Hwang's involvement, directly or indirectly, with HKPVG
business. He knew Mr. Jiang, he had met him before. We
refer again to HKPVG's letter of September 21st 1993 to the
SFC:"George Wong ... and C.S. Hwang ... and Mr. Jiang ...
commenced discussions on 27th April 1993 about various
possibilities of mutual co-operation between the Company
and UNIPEC in pursuing business developments."
55
(The letter goes on to say that it was Mr. Jiang who contacted
Mr. Hwang by phone on the 13th as a result of which Mr.
Hwang immediately flew up to Beijing.
But see our
comments on this at page 49 supra.)
and to Richards Butler's letter of 7th October 1993, also to the
SFC:~
"Between 28th April 1993 and 12th August 1993 there
were various discussions between HKPVG and ...
UNIPEC .... All of the discussions during the period
were with Mr. Jiang ... and HKPVG was represented by
either Mr. George Wong or Mr. HWANG Chou-shiuan."
(The letter emphasizes that these "various discussions" never
concerned a possible placement)
We remind ourselves also that an almost identical proposed
placement had fallen through in early 1993. The idea of a
possible placement of approximately 20% of the Company by
placing HKPVG shares through Kompass had been in existence
since October 1992 (See Annexure S). We think it probable
that the failure of one placement did not result in the
abandonment .of the strategy generally.
In these circumstances we cannot accept that the first seeds
of the placement were sown on Friday 13th. We cannot accept
either that Mr. C.S. Hwang flew to Beijing on a secret frolic of
his own to offer the placement to Mr. Jiang. We do accept that
it may have been embryonic but not conceived on August 13th.
We find support for this finding by considering also the
events :(ii) After the 13th:
The most significant feature of the post 13th events is the
56
pace at which they happened. Mr. C.S. Hwang arrived back in
Hong Kong in late morning on Saturday, August 14th 1993.
The announcement of the finalized deal was made by the SEHK
at 10:02 a.m. on Tuesday, August 17th. On the one hand we
accept that placements can be done quickly. Mr. Andrew
Biggs of Richards Butler who gave evidence on Mr. Hwang's
behalf used expressions such as "within 24 hours'5 and "on the
back of an envelope" when asked to give his experience (which
was considerable) about how and how quickly placements
could be done. On the other hand however we have a piece of
evidence from Sammy Leung which paints a different picture
when dealing with PRC companies. He was referred to
Annexure C, the first draft of the public announcement of the
placement, on which a number of handwritten queries appear
which were written by someone at the SEHK. Query No. 8
states "Please send us a confirmation letter either from the
relevant PRC authorities or from the financial advisor that no
approval is required to make this investment" (i.e. UNIPEC's
purchase of 89 million shares). Mr. Leung told us that if such
approval was necessary it could take between several days and
several weeks to obtain it. We appreciate that, because we do
not know for a fact whether or not approval was required, we
cannot conclude that it was impossible to open and close a
placement deal between a Hong Kong listed company and a
state owned PRC company in a reasonably quick time.
However we do not overlook his answer when deciding whether
this particular deal could have been conceived on Friday
evening August 13th and healthily produced to the public on
Tuesday morning, August 17th - one and a half working days.
It was said by a number of witnesses that between Saturday
lunch time and Monday morning no work was done on the
matter in Hong Kong.
On the premise that HKPVG knew in advance of Friday
13th that they would be making an offer to UNIPEC the speed
at which they made the necessary arrangements, documentation
and held a Board meeting is not surprising. We must consider
also the actions of the other party on the other side of the deal 57
a very large state run PRC oil and petrochemical company.
There is no direct evidence of what happened in Beijing
after dinner on Friday the 13th. According to Mr. Hwang the
next contact was a phone call from Mr. Jiang to himself which
he received between 9:00 a.m. and 9:30 a.m. on the Monday
morning at his office in Worldwide House. The phone call
was about the placement. Mr. Hwang told him over the phone
to send him a letter of confirmation by fax. The fax duly
arrived at HKPVG offices in Worldwide House at 11:09 a.m.
less than 2 hours after the phone call. We include this fax and
its cover sheet at Annexure D. We note the following matters
arising from its content and timing:(a) It is addressed to "The Hong Kong Parkview Group Ltd."
at "11/F Worldwide House55 and starts "Dear Mr. Hwang55.
(b) The cover sheet says
"To: Parkview Group H.K.
"Attn. Hwang Chou Shiuan55
(c) The cover sheet says "Please pass to Mr. Hwang Chou
Shiuan as quickly as possible55
The overwhelming
inference from (a) (b) and (c) is that the author of the fax,
Mr. Jiang, understood that the "deal55 they had discussed
on the Friday evening was between UNIPEC and HKPVG
with Mr. C.S. Hwang as the spokesman for HKPVG.
(d) The fax reads "Re: Application for shares. Reference is
made to the agreement between you and the undersigned
dated August 13th 1993, we hereby agree to take up 89
million shares in the capital of your company through our
nominee Bank of China, Hong Kong particulars of which
are set out below at the price of HK$2.85 per share ...55.
Although the fax reads "the agreement55 on August 13th
we accept that there could not have been a formal
agreement on that date. The fax's heading "Application
for shares55 is more accurate.
58
(e) When the fax was received, 11:09 a.m. Monday morning,
Mr. C.S. Hwang was in his office at Worldwide House.
All the circumstances drive us to the conclusion that it is
highly probable that he was there in anticipation of the
phone call and fax arriving that morning. A mid-day
meeting of significant personnel was immediately called
and thereafter all that remained to be done by HKPVG was
to await to return to Hong Kong of the Company Chairman,
Mr. George Wong, to add the formality of his final
approval as HKPVG Chairman.
If, as we are asked to accept, the placement was first
proposed on Friday evening and accepted by UNIPEC at 11:09
on Monday morning it follows that between those two times:UNIPEC came into possession or was already in possession
of sufficient reliable information about HKPVG's finances
to satisfy themselves that the proposed purchase at the
proposed price and volume was advantageous to their
company.
Mr. Jiang was able to see and discuss the proposals with
the relevant people in Beijing over a week-end so as to
seek and obtain their approval for the purchase.
All the necessary arrangements for the payment of HK$253
million by UNIPEC through the Hong Kong branch of the
Bank of China had been made.
Furthermore, the request for the fax, according to Mr. C.S.
Hwang had only been made 1-2 hours earlier. Therefore,
the fax with all its details had been drafted in English,
approved and sent within that time frame. The fact that it
was in English contrasts with the one sent the next day
which was in Chinese. It is highly probable that UNIPEC
had the details required for the first fax, in English, prior to
Mr. Hwang's request at about 9:00-9:30 a.m.
59
All these factors cause us to conclude that a PRC entity suet
as UNIPEC could not have responded to a Friday evening
discussion with such expedition.
These are therefore
additional factors which contribute to our finding that it is
highly probable that the placement was conceived before the
13th.
(lii) Goodwill's letters of August 20th and 31st:
We refer to these letters once more. We commented on
them earlier in the context of "was there a Friday 13th
meeting?55 In one additional respect they also throw light on
the issue "what was known at that time?"
In the opening statement of the first draft the person who
was asked to "peruse" it, Mr. Peter Sin, instructed the addition
of the word "officially55 in manuscript when describing when
the placement discussion started on the morning of the 13th.
In the amended version which went out on August 31st the
word "formal" has been used instead so that it reads "Formal
discussions ... commenced on Friday 13th August 1993". In
neither draft is any attempt made to suggest that this was the
first time there were any such discussions. The specific
inclusion of words such as "officially" or "formal" does
suggest that there had been informal or unofficial discussions
at an earlier date. Mr. Sin was asked what he meant by his
addition of the word "officially" in the first draft and "formal"
in the final draft. He said the use of such words depended on
"the degree of sincerity". This is an indication that there had
been discussions about the placement prior to the evening of
August 13th but these discussions may have had a lesser
degree of sincerity that must have been apparent in the after
dinner discussions.
C. "Not generally known":
The ingredient that, in order to be "relevant" the information
60
must be "not generally known to those persons who are accustomed
or would be likely to deal ..." has not been the subject of any
contention as far as the facts are concerned. We have made our
ruling in so far as the law is concerned in the previous chapter.
We state, for the sake of completeness that there is ample evidence
in support of this ingredient that the information Mr. C.S. Hwang
had when he purchased his 974,000 shares on Friday 13th August
was only known to himself, his broker and possibly some other
senior HKPVG personnel.
The information remained "not
generally known" until the announcement on the SEHK teletext at
10:02 a.m. Tuesday August 17th when it first became available to
those accustomed or likely to deal.
Purchases after that
announcement could not be insider dealing, purchases beforehand
could be.
D. Price sensitive
We now turn to the final ingredient in the definition of "relevant
information". The question is - does the evidence satisfy us to a
high degree of probability that the information, if it had been
generally known, would be likely materially to affect the price.
The witness called by counsel to the Tribunal to deal with this
issue was Mr. Alex Pang. Mr. Pang was the Senior Manager in
charge of the Surveillance Unit of the SFC. His professional
background is that of an accountant and has 13 years experience with
the SFC or its predecessor the office of the Commissioner for
Securities and Commodities Trading. He candidly conceded that he
was not a share analyst but described himself as a stock watcher.
His evidence-in-chief consisted firstly of producing and
explaining the statistics relating to the price and movement of the
HKPVG share during the relevant periods in 1993. Those facts and
figures are contained in the tables and graphs attached to this report
at Annexures N, O, P and Q.
The particular price movements which concern us are those
which we have already set out on page 4. In percentage terms the
61
daily increases after the weekend were 12% on the 16th, 12% on the
17th, 7% on the 18th and 13% on the 19th.
His conclusion, which he invites us to accept, is that
(a) the increase in price on Friday 13th from $2.65 to $2.85 was
caused primarily by Mr. C.S. Hwang's purchase of 974,000
shares which represented 58% of the day's turnover and
(b) the increases in the few days after the announcement of the
placement were due to the announcement.
Mr. Pang bases his conclusion that the price went up because of
the placement primarily on the facts that the placee was a PRC
company and the absence of any other news which might have
affected the price.
Mr. Tong makes a number of criticisms of Mr. Pang's evidence.
We shall attempt to summarize them.
Firstly he submits that as Mr. Pang is not a share analyst his
opinion should not be regarded as an expert opinion and the Tribunal
should be cautious before placing any reliance on it. He goes on to
say that as he is not an analyst he cannot say what is likely to happen
in the future, he can only observe what has happened in the past.
We do not consider this to be a fair criticism so as to devalue his
evidence. It is true that he observes what has happened to a share
but goes on to say, in effect, - I would have predicted that increase if
I had known about the announcement before it was made. We are
satisfied that his experience is sufficient for us to accept such a
conclusion as reliable.
Secondly, in an attempt to illustrate the sentiment in the market
at the time known as "China enterprises", in which connection
between Hong Kong companies and PRC companies was regarded as
good news and was likely to increase the share price, Mr. Pang
quoted a number of examples of such connections around that time.
Mr. Tong criticizes the evidential value of these illustrations because
62
every one related to a take-over situation and none of them related to
placements. We consider this criticism to be perfectly valid.
There are indeed a number of differences between the take-overs
which Mr. Pang quoted as examples and the HKPVG/TJNIPEC
placement. It is not necessary to elaborate in this report on those
differences.
Generally speaking the examples were of PRC
companies taking over "shell" companies which were referred to at
the time as "backdoor listing". Our situation was nothing of the
kind. However we do not agree that because the examples are
different it follows that the opinion is wrong. The question remains
- was an imminent placement of 20% of HKPVG to UNIPEC at a
cost to UNIPEC of HK$253 million good news which would cause
the investing public to buy if they knew?
Mr. Tong submits that it was only because the placement did go
through on the evening of the 16th that the price went up not
because Mr. C.S. Hwang may have known he 'was going to make an
offer on the 13th. The strength of this submission is diminished by
our finding, already made, that Mr. C.S. Hwang had reason to
believe that it would go through. The public's reaction on the 17th
onwards was clearly to buy. It is highly probable that they would
have bought on the 13th as well because a man of Mr. C.S. Hwang's
influence and prestige was about to make the offer which he believed
would be accepted.
Mr. Tong further points out that the finalized details of the
placement were materially different from the outline discussions on
the Friday or the deal as contemplated by Mr. Hwang before he left
for China. He submits that if the information disclosed on the 17th,
which caused or contributed to a rise in the share price, is different
from the information allegedly available at the time of the alleged
insider dealing on the 13th how can it be said that the earlier
information would have caused the same reaction as the later
information did? We must look at the similarities as well as the
differences.
The differences were largely technical.
They
concerned the method of carrying out the placement. Would such a
difference cause a different reaction? We say not when one
considers the similarities i.e. the things that did not change between
63
the 13th and the 17th. The placee was the same, the volume was
the same, the price was the same, the PRC connection was the same,
the amount of money involved was the same and the benefits to
HKPVG were the same.
Thirdly Mr. Tong notes that on the day of the announcement,
August 17th, the share price only went up by 37.5 cents. He points
out that when a press article was published on the 19th giving further
news of co-operation between HKPVG and UNIPEC the price went
up 50 cents in the day. He suggests that the price rise was due to
the confirmation of ties between the two companies. We do not
think it is realistic to separate each daily movement and look for a
different cause each day. The simple fact is that the price went up a
similar amount each day for 3 days after the announcement. Those
closest to the shop floor would have been the early buyers and as
more information about the placement reached a wider audience
more buyers would have contributed to the upward surge. We are
confident that the upward surge would have begun on the Friday
morning had the investing public been privy to the same information
that Mr. C.S. Hwang had.
Finally Mr. Tong argues that because the SEHK did not suspend
the share on August 17th it could be inferred that they did not regard
it as price sensitive. We however are satisfied that the only reason
they did not suspend the share is because the SEHK considered that
sufficient information had been disclosed by the teletext
announcement at 10:02 a.m. on that morning.
The criticism of Mr. Pang's evidence came not only from the
submissions made by Mr. Tong but also from the evidence given by
Mr. Andrew Biggs. Mr. Biggs was and is a partner in the firm of
Richards Butler, HKPVG's solicitors and he has considerable
experience in corporate finance matters in Hong Kong. His firm
was involved in many of the take-overs quoted by Mr. Pang in which
he sought to illustrate the China Enterprises phenomena in 1993. In
particular Mr. Biggs challenged Mr. Pang's statement that "It was
viewed by the market that any involvement with China Enterprises
would greatly increase the company's attractiveness and hence its
64
rating to the investing public.59 Mr. Biggs disagrees that any
involvement would have such an effect. He provided the Tribunal
with helpful and interesting evidence by which he distinguished Mr.
Pang's "take-over" examples and our "placement".
Of course, we do not need to be satisfied that any involvement
with a PRC enterprise would be regarded as price sensitive
information, we have to be satisfied that this involvement would
have been. Mr. Biggs agrees that there was a general bullish
sentiment in relation to China in 1992/3 prior to and as a result of the
"H share" listings. When examining one particular involvement we
cannot overlook, as Mr. Tong submits we should, the "proof of the
pudding being in the eating" argument. The public enjoyed the
pudding when they ate it on the 17th and thereafter. The pudding
had been baked on the 13th and we are sure that the ingredients
which appealed to the public were those referred to above (page 64,
line 1). We are satisfied that the suggestion that the rise between
the 12th and 20th August could have been due to other factors is too
remote to be worthy of serious consideration. The rise in the
HKPVG share over that period was 64%, the rise in the Hang Seng
Index was 2.8%. The size of the rise does not help us determine its
cause, nonetheless, the Tribunal has concluded that it can safely
eliminate causes other than the substantial buying on the 13th
(buying which the public would have seen and responded to on the
16th) and the announcement on the 17th as being the reasons for the
increase over that period.
E. Knowledge
Our report thus far has found that the information C.S. Hwang
had when he placed his purchase order was relevant information as
defined by section 8 of CAP 395. Before insider dealing is proved
the Tribunal must be satisfied that he knew it was relevant
information. Not that he hoped or expected or believed it might be
relevant information but that he knew.
65
In other words he must have known that it was specific
information, he must have known it was private information and he
must have known it was information which was likely to affect the
price had it been generally known.
The first two ingredients of his knowledge, namely that he knew
the information was specific and private cause no difficulty. In the
circumstance of this case and in the light of our determination as to
what constitutes "specific55 information, the very fact that he had the
information on the 13th answers those questions. It is impossible
to imagine that he did not know it was specific or did not know it
was private. He knew he was going to make the offer, he knew he
had reason to believe it would be accepted and he knew the
information was not public.
As to the third ingredient of knowledge - it is not necessary to
prove that he knew the price would go up it is only necessary to
prove that he knew it was likely to go up. Once this distinction is
made, again proof of this ingredient causes us no difficulty. As
will be seen from the next chapter we find that his specific strategy
behind his purchase on the 13th was to cause an increase - an
increase he knew would occur because of the size of the purchase
and an increase he knew was likely to continue after the
announcement of the placement.
66
CHAPTER 7
CAP 395 s. 10<3) Defence
Thus far we have found that Mr. C.S. Hwang's dealing on
August 13th 1993 was insider dealing as defined by s. 9(l)(a), CAP 395.
By virtue of s. 10(3) we must not identify him as an insider
dealer if
"he establishes that he entered into the transaction otherwise
than with a view to the making of a profit... by the use of the
relevant information".
As already mentioned at page 18 of our report the burden of
proof is on the person who seeks to rely on it and the standard of proof
required is on the balance of probabilities.
In this chapter we will firstly decide, as a matter of fact on the
evidence, what was the motive behind Mr. Hwang's purchase order.
Secondly, we will consider the arguments advanced as to how s. 10(3)
should be interpreted, as a matter of law.
A. Why did he buy?
His defence to both the SFC in his statements and in evidence to
the Tribunal was that the purchase order had nothing to do with
either the placement or his trip to Beijing. He said he was buying
on behalf of a third party, a Taiwanese lady named Madam KAO
Su-mei. In his statement to the SFC he said he had been asked by
her to buy 10 million HKPVG shares for her and other friends of
hers a few days before August 13th 1993. It was while he was
going to the airport on his way to Beijing that he remembered this
request and so, using the car phone, he called Mr. Peter Sin and
asked him to buy just one million shares in response to Miss Kao's
request.
67
In a number of material respects the evidence given in court
differed from the above account which had been given to the SFC.
Firstly, Mr. C.S. Hwang explained to us that the purchase for Miss
Kao was not a purchase for her personally but for a pension fund
connected with his Taiwanese company for which Miss Kao worked.
Buying for a friend and buying for a pension fund are very different
explanations. It is probable that the latter was introduced into
evidence because of the inherent implausibility of the former.
Secondly, evidence of Miss Irene So, Mr. Hwang's broker at
Mansion House, gave rise to another discrepancy. She informed
the Tribunal that the order to buy came from C.S. Hwang himself
and not from Peter Sin. Mr. Hwang's evidence to the Tribunal was
more consistent with Irene So's evidence than his own statement to
the SFC. We find that he was more interested in the purchases, as
the day went on, than the original impression he gave to the SFC.
His daughter Sally remembered that he made phone calls both from
his car and at Kai Tak. The whole picture is consistent with Mr.
C.S. Hwang monitoring the day's purchases, either directly or
indirectly, pushing the price up to $2.85. Thirdly Mr. Hwang said
in evidence that he had been buying for Miss Kao for the pension
fund for some time prior to the 13th but had not registered them in
her name whereas his SFC statement suggests that the first purchase
he made for her was when he suddenly remembered about it on the
way to the airport.
It is unnecessary to examine the differences between the two
accounts in any detail because the Tribunal rejects both of them.
The weaknesses in the "pension fund" version are that it had never
been mentioned before he gave evidence, the purchases were not
registered in the name of any pension fund and there was no other
records or documentation to support the explanation.
What inference, if any, do we draw from our finding that there is
no truth in the explanations for the purchases given either to the
SFC or the Tribunal?
68
In the same way that we were cautious about what inferences
should be drawn from our rejection of the evidence relating to the
trip to Mongolia, so here also we approach the question of what
inference or inferences can be drawn with care.
We bear in mind that Mr. C.S. Hwang is a very wealthy man.
He is a man who almost invariably bought HKPVG shares when he
could. Certainly for months prior to August 13th 1993 he almost
exclusively bought. When he did buy he often bought in fairly
large lots - several hundred thousand at a time was not unusual.
He made more large purchases after the announcement when the
price had gone up. Facts and figures in relation to these matters
are to be found at Annexure O.
For these reasons we do not draw the inferences that Mr. C.S.
Hwang's sole motive for buying on August 13th 1993 was to make
a personal profit for himself.
On the contrary we find that Mr. Hwang was passionately
interested in the Company's affairs and that his purchase was
directly related to the Company's strategy in advance of the
forthcoming placement. In short, we find that his primary motive
was to cause the share price to go up on Friday 13th from its
opening price of $2.65 to a price, hopefully which would be $2.85,
at which he wanted to agree the price for the placement - the same
price that had been proposed for the placement earlier in 1993
which never went through. He knew that a substantial purchase
would have that effect. He knew the placement was good for
HKPVG.
It was good for HKPVG because primarily, it established a good
connection with a large PRC company. A new directorship for the
UNIPEC representative would be created on the HKPVG Board.
UNIPEC's connections would provide HKPVG with new business
opportunities, particularly in the oil business. A second benefit
was the quick injection of a large sum of cash.
All these things were well within C.S. Hwang's knowledge and
69
he knew therefore that the increase of the share price caused by his
purchase on the Friday was likely to continue after the
announcement.
In the light of this finding we now considers the submission as
to whether Mr. C.S. Hwang can avail himself of s. 10(3) in such
circumstances.
B. Submissions on s. 10(3)
(1) By Mr. Ronny long. O.C. on behalf of Mr. C.S. Hwang
Mr. Tong submitted that there was no judicial decision on
the precise meaning of the wording of the defence. He
Invited us to consider judicial statements about the meaning of
the phrase "with a view to" from nineteenth century English
cases concerning bankruptcy. For example in New. Prance &
Garrard's Trustee v Hunting [1897] 1 QB 607, Vaughan
Williams J. said about s. 48 of the Bankruptcy Act 1883 which
contained the expression "with a view to prefer":"Now, it is very easy to confuse "motive" and "view".
In fact it is so easy to confuse motive and view that there
are numberless words in the English language which have
a double or equivocal meaning, and are sometimes used to
express motive and sometimes used to express view. ... I
do not assent to the suggestion that "view" means the
primary result aimed at. ... The word "view", as used in
the section, is used to express the object aimed at by the
bankrupt in bringing about the primary result. Now,
although motive is not the thing that we are to look for,
but view, it is plain, as was pointed out by Lord Esher in
Ex parte Taylor 18 QBD 295, that ascertaining the motive
will very often assist you in determining what is the
view."
In Ex parte Hill (1883) 23 Ch.D p.704 Lord Justice Bowen
said of the phrase "with a view of giving such creditor a
70
preference over the other creditors55 :"There are only three conceivable meanings which these
words can have. (1) They may conceivably mean the
case where the debtor has present to his mind as one view,
among others, the giving a preference to the particular
creditor. I do not think that this is the true interpretation
of the words; (2) Another possible construction of the
words is to read them as equivalent to "with the view" the real, effectual, substantial view - of giving a
preference to the creditor, the word a being equivalent to
the. I think that this is the correct interpretation; (3) The
other conceivable construction is to treat them as
equivalent to "with the sole view or sole motive." I
should prefer keeping to the word "view" instead of
"motive", though in nine cases out of ten the two words
may come to the same thing."
Mr. Tong's submission, in a nutshell is that the correct
interpretation of s. 10(3) is that the defence is established if it
is shown that "it is not the substantial or effectual view,
purpose or object of the implicated person to make a profit by
the use of the relevant information." Put in other words he
submits that the defence must succeed if it is shown on the
balance of probabilities that making a profit for himself was
not the primary purpose of the dealing.
In support of his contention that Mr. Hwang either had no
motive to make a profit or that his primary motive was
otherwise with a view to gain, Mr. Tong highlights some
factual matters:(i)
Mr. Hwang never sold the shares so as to realize a profit.
In fact he still has them.
(ii) Mr. Hwang was a steady buyer both before and after the
placement.
71
(iil) He was an accumulator of HKPVG shares rather than a
trader in them. His pattern of trading was of long term
investment rather than quick profits.
(2) Submissions made by Mr. Marash:
Mr. Marash concedes first of all, and we agree, that the
effect of the words "if he establishes" does not mean that the
burden can only be discharged if the defence relied on is
supported by the evidence of the implicated person. Even if
an implicated person seeks to advance a totally different
answer to the allegation of insider trading the Tribunal must
still consider the whole of the evidence and decide if the
evidence (not just his evidence) discharges the burden on a
balance of probabilities. Mr. Justice Stock in the "Success
Holdings'5 inquiry put it this way:"We do not construe the phrase "if he establishes5' so
narrowly as to preclude us from making a finding that
section 10(3) avails (the implicated party), even though
the facts upon which it might avail them are the facts we
find rather than those they would have us find."
In short, Mr. Marash invites the Tribunal to make the
following rulings:(i)
The Ordinance does not say and does not suggest that
only quick cash profits are to be considered unlawful.
Insider dealing which results in long term paper profits
can still be insider dealing. Whether a man sells his
shares soon afterwards will clearly be relevant evidence
but the absence of such encashment will not preclude a
finding of insider dealing.
(ii) For a person to avail himself of s. 10(3) he must satisfy
the Tribunal that no part of his intention or motive was
profit related. He submits that if the Tribunal concludes
72
that any part of his motive was profit related the section
cannot apply.
(C) The Tribunal's ruling on s. 10(3):
We agree that there is a paucity of authority on the meaning of s.
10(3). Its proper construction is not only of importance in this case
but is likely to be raised in future inquiries.
Not only is there a paucity of authority but also there appears to
be remarkably little commentary on the subject. We consider it
useful to preface our ruling by quoting some extracts from texts on
the question.
When commenting on an almost identical provision in the U.K.
statute Emmanuel Gaillard in "Insider Trading" at page 181 states:"A person will not be debarred from embarking upon an
otherwise prohibited activity where he does so otherwise than
with a view to the making of a profit or the avoidance of a loss,
whether for himself or another person. It is not clear how the
Courts will interpret this particular provision. For example,
does the making of a profit or the avoidance of a loss have to be
the primary purpose or simply one of the purposes for
embarking upon the prohibited activity."
The footnote provides just one authority:"Howard Smith v Ampol (1974) AC 821. This case concerned
the fending off of a takeover bid. It can be argued that dealing
or communicating information for the purposes of fending off a
hostile takeover bid would be within the ambit of this particular
exclusion."
A further commentary on the background to the U.K. Legislation
is found in "The Regulation of Insider Dealing in Britain" by J. Suter
at page 113:73
"This controversial defence provides that an individual is not
liable by reason of having any information from:
'doing any particular thing otherwise than with a view to the
making of a profit or the avoidance of a loss (whether for
himself or another person) by the use of that information.5
This provision was introduced to counter any deterrent effect of
insider dealing legislation on directors and employees holding
shares in their companies.
But defences based on an insider's personal needs have been
objected to in principle on the ground that the mere fact of
circumstances necessitating a profitable dealing does not mean
an insider should retain the profits. In relation to civil liability,
this defence is not available to a fiduciary called to account.
In terms of formulation, the difficulty with the defence
contained in the IDA (Companies Securities (Insider Dealing)
Act) 1985 is that the making of a profit or avoidance of a loss is
a motive in most dealings. When a similar defence was
introduced in the 1978 Bill, the CSI (Council for the Securities
Industry) recommended that the defence be redrafted on the
lines of the one contained in the 1973 Bill so that it applied
when making a profit or avoiding a loss was not a primary
motive. But the 1973 Bill's distinction between primary and
subsidiary motives attracted the criticism that it would facilitate
avoidance of liability on a scale that undermined the operation
of the proposed legislation. In this context, a preferable
approach was proposed by the Law Society in its comments on
the 1978 Bill. As the legislative objective was to prohibit an
insider exploiting inside information irrespective of whether this
occurred with a view to making a profit or loss for himself or
another, it supported a provision in terms that:
c
it shall be a defence to show that the accused did not deal
for the purpose of exploiting the inside information in his
74
possession.
Judicial interpretation of this statutory defence remains
unclear. But the failure to distinguish primary from subsidiary
motives points to a narrow interpretation in which case an
insider will be unable to rely on the defence when he has
alternative assets.55
It should be noted that these commentaries on a like provision in
the U.K. Legislation pre-date the provision which now applies in the
U.K. namely s. 53(1) of the 1993 Criminal Justice Act which
provides a defence to act defendant in criminal proceedings if he
shows:'(a) that he did not at the time expect the dealing to result in a profit
attributable to the fact that the information in question was
price-sensitive information in relation to the securities; or
(c) that he would have done what he did even if he had not the
information."
Mr. Justice Stock at page 8 1 of the "Success Holdings" report
states :"The aim of a like provision in the U.K.'s (now repealed)
Companies Securities (Insider Dealing) Act 1985 has been the
subject of discussion by commentators, and the examples they
suggest provide a helpful guide. It is, says one, "... apparently
intended to permit trustees or legal personal representatives to
sell securities pursuant to their legal duties without incurring
criminal penalties for doing so ...." (see L.H. Leigh "The Control
of Commercial Fraud", page 115). Most writers agree that the
provision would protect the person who sells to raise funds "to
meet a sudden and pressing need" (Losse, Yelland, and Impey,
"The Company Director" 7th Edition, page 284); as well as the
insider who "[takes up]" qualification shares required under the
75
terms of a company's articles of association" ("Insider Trading"
by Rider, page 34). (The last example is separately provided
for by the Ordinance: See section 10(l)(a)).
He later quotes from "Take-overs and Mergers" by Weinberg
and Blank:"It is not clear whether there must be absolutely no profit motive
at all or whether the existence of a profit motive will not be fatal
so long as there is an overriding non-profit motive."
The conclusion of the "Success Holdings" report is that the
practical interpretation of s. 10(3) is that it will legitimately protect
directors and other insiders detected in insider dealing if they can
show that circumstances compelled them to realize their holdings
and that they would have done so at the time whether or not they had
the price sensitive information.
This test is directed particularly at those who sell their shares.
Indeed, being unconcerned about the consequential profit when
selling shares on inside information is easier to comprehend than
when the case concerns a profit from buying shares. This point is
made by Brenda Hannigan at page 83 of "Insider Dealing""As with other provisions in this legislation, there is
considerable doubt as to the scope of this provision which fails
to define with any precision when it would be permissible to
deal What type of situation will bring an insider within the
protection of s. 3(l)(&)?[the same as our s. 10.3] Certainly
compelling circumstances will be required to justify dealing
although it is unclear to what extent the circumstances must be
beyond the control of the insider. Suggested situation have
included: to satisfy an outstanding bill; to pay for repairs for a
damaged car; to provide for early retirement or school fees; to
pay the fee of a specialist surgeon; to meet a tax demand; or
some other pressing financial burden. The difficulty with most
of these suggestions is that with the possible exception of title
medical expenses they do not suggest circumstances which
76
would demand the immediate sale of securities while the insider
is in possession of unpublished price sensitive information as
opposed to their sale when the information has been
disseminated. School fees, retirement, tax demands, for
example, are situations which in the very great majority of cases
represent known and anticipated demands upon resources.
Why they should justify, if indeed they do, insider dealing is
unclear. After all, if faced with an unexpected financial
demand, it may be all the more pressing for an individual to
insider deal, in order to ensure the maximum financial gain from
his forced realization of securities. This raises another problem
which is that while some justification may exist for allowing
sales of securities in circumstances when some financial
exigency requires it, it is not at all clear when there would be a
pressing requirement to purchase shares. One very limited
possibility is a purchase to obtain qualification shares by a
person appointed as a director."
Conclusion
On consideration of these commentaries this Tribunal is
convinced that s. 10(3) is not intended to provide an implicated person
with a defence which would succeed on proof on the balance of
probabilities that a genuine non-profit motive at least contributed to his
reason or reasons for dealing.
This Tribunal makes its decision on the basis that s. 10(3)
applies only if the evidence shows that the true reason or reasons for
dealing were wholly unconnected with any desire or intention to make a
profit or avoid a loss. Profit means simply a resulting increase in the
value of the shares which have been purchased. The proof of profit
does not depend on the shares being subsequently sold although evidence
of when and/or whether they were sold may be relevant evidence, but not
proof, of motive.
In other words the section is to be construed narrowly. In most
cases it will arise in the situation where a person has non-profit motives
for selling shares. It will be even more difficult to establish the defence
77
in a situation where, as in our inquiry, the shares were purchased. As
Brenda Hannigan said "it is not at all clear when there would be a
pressing requirement to purchase shares". Furthermore that "pressing
requirement" must be shown to be the only reason for the purchase.
Have Mr. C.S. Hwang's purchases on 13th August 1993 been
proved to come within this section as so construed? Clearly they have
not. We conclude that although personally, he may not have been
particularly interested in the increase in the value of the shares he bought
he cannot escape the consequence of his certain knowledge that the price
would go up on the Friday and that it was likely to continue going up
after the weekend and the value of the shares he had purchased would
increase.
The Friday purchase and the placement were inextricably
connected. The former was a preliminary strategic move to ensure or at
least contribute to the success of the latter. His first reason for buying
was to see a rise in the price which would in turn see the placement go
through which would in turn result in further increase in the share value.
A successful and profitable placement was obviously desired and
intended. The profit which resulted from the purchase of 974,000
HKPVG shares by Mr. C.S. Hwang cannot be viewed as separate
unrelated non-profit motivated purchase.
In short, the situation which we have found to be the case here is
not a situation to which s. 10(3) applies. Given the facts as we have
found them to be we are satisfied that the provisions of CAP 395 are
such as prevent any purchases being made by people such as Mr. C.S.
Hwang in the circumstances which prevailed at the time on the morning
of Friday August 13th 1993. His purchases contravened s. 9(l)(a). He
should have refrained from buying. S. 10(3) does not apply.
78
CHAPTER 8
MR, PETER SIN KIT-LEUNG
The legal representatives of Mr. Peter Sin and indeed Mr. Peter
Sin himself will have noticed, whilst reading through our report thus far,
a significant lack of reference to his involvement in alleged insider
dealing. This has been deliberate. As will be seen in this short chapter
we have concluded that Mr. Peter Sin should not be identified as an
insider dealer arising out of his purchase of 100,000 HKPVG shares on
Friday August 13th 1993. With this in mind we concentrated on the
issues in relation to Mr. C.S. Hwang alone in Chapters 4-6.
The evidence in relation to the two men is different in many
respects. Ultimately we have concluded that the evidence concerning
Mr. Sin does not satisfy us to a high degree of probability that all the
ingredients of insider dealing have been proved. Mr. Sin was one of at
least four senior personnel at HKPVG who made significant purchases of
the Company's shares after Mr. Hwang's purchase and before the
announcement of the placement. His purchase inevitably attracts a
cloud of suspicion over it
In many respects the submissions made by Mr. Jonathan Harris
on Mr. Sin's behalf were the same as those made by Mr. Tong. Mr.
Sin's case was:(1) If, which is not admitted, there was a meeting on Friday morning
August 13th, he did not attend it.
(2) His first knowledge of the placement was on the 14th after he
had bought his shares.
(3) In any event there was no relevant information available at the
time of his purchase.
(4) He did not buy with a view to making a profit and so s. 10(3)
applies.
79
Our decision in relation to Mr. Sin turns on (1) above and it
becomes unnecessary therefore to deal with (2), (3) and (4).
We have found that there was a meeting on the morning of
Friday 13th but we cannot be satisfied on the evidence that it was highly
probably that Mr. Sin attended it. Proof of attendance at that meeting is
of the greatest significance in this inquiry. If a person was not or might
not have been at that meeting one can only speculate about the person's
actual knowledge at the time of the suspected trading.
The Tribunal recognizes that Mr. Sin must have been in close
liaison with both Mr. C.S. Hwang and other senior personnel at HKPVG
and therefore may have known something. However we cannot say
what he knew and if we cannot say what information he actually had we
cannot begin to analyse whether or not it was "relevant" for the purpose
of s. 8. If Mr. Peter Sin decided to buy shares in the afternoon of
August 13th simply because he knew and saw that Mr. C.S. Hwang was
buying heavily that would only be evidence of insider dealing by Mr. Sin
if he knew, not merely suspected, that Mr. Hwang was insider dealing.
We do agree that much of the evidence in relation to Mr. Sin's
activities suggests that he has done everything possible to distance
himself from involvement. The evidence does not permit us however to
draw the inference that the reason for so doing flows directly from his
own culpability.
We consider that it was correct to issue Mr. Sin with a Salmon
"A" letter and amend the terms of reference to include his name. He
has thus had the opportunity to be fully heard and had his case fully
ventilated. To say more would be superfluous.
This does not conclude our report. Our report must include our
decisions as to what orders pursuant to s. 23-27, CAP 395 should follow
our findings. Before making those orders those against whom findings
of insider dealing have been made must have an opportunity of being
heard.
80
We therefore will send Chapters 1 - 8 inclusive to the Financial
Secretary and to the legal representatives of Mr. C.S. Hwang and Mr.
Peter SIN Kit-leung.
We will arrange a date in the near future when the Tribunal will
reconvene for a hearing on the question of consequential orders and
penalties.
Following that hearing our orders will be set out in Chapter 9
and the completed report will be sent to the Financial Secretary and
published.
81
CHAPTER 9
PENALTIES AND CONSEQUENTIAL ORDERS
On January 31st 1997 the Tribunal sent Chapters 1-8 of its
report to the Financial Secretary. We reconvened on February 26th
1997 to give Mr. Hwang an opportunity to be heard, through his counsel,
Mr. Ronny Tong, Q.C., on the question of what order or orders should
follow our finding that the purchase of 974,000 HKPVG shares on
August 13th 1993 constituted insider dealing by him. We also heard
Mr. Jonathan Harris on behalf of Mr. Peter Sin on the question of costs
following our finding that Mr. Sin not be identified as an insider dealer.
In relation to Mr. Hwang we are concerned with two sections of
the Ordinance. Firstly, the relevant parts of s. 23 are :"(1) At the conclusion of an inquiry as soon as is reasonably practicable
thereafter, where a person has been identified in a determination under section
16(3) or in a written report prepared under section 22(1) as an insider dealer, the
Tribunal may in respect of such person make any or all of the following orders (a) an order that that person shall not, without the leave of the High
Court, be a director or a liquidator or a receiver or manager of the
property of a listed company or any other specified company or in
any way, whether directly or indirectly, be concerned or take part in
the management of a listed company or any other specified company
for such period (not exceeding 5 years) as may be specified in the
order;
(b) an order that that person pay to the Government an amount not
exceeding the amount of any profit gained or loss avoided by that
person as a result of the insider dealing;
(c) an order imposing on that person a penalty of an amount not
exceeding three times the amount of any profit gained or loss
avoided by any person as a result of the insider dealing."
82
Secondly s. 27 provides:"At the conclusion of an inquiry or as soon as is reasonably practicable
thereafter, the Tribunal may order any person who has been identified as an
insider dealer in a determination under section 16(3) or as an officer of a
corporation in a determination under section 16(4), as the case may be, to pay to
the Government such sums as it thinks fit in respect of the expenses of and
incidental to the inquiry and any investigation of his conduct or affairs made for
the purposes of the inquiry."
In relation to the application for costs on behalf of Mr. Peter Sin the
relevant parts of s. 26A are>
"(1) Subject to subsection (5), at the conclusion of an inquiry or as soon as
reasonably practicable thereafter, the Tribunal may award to(a) any witness;
(b) any person whose conduct is, in whole or in part, the subject of the
inquiry,
such sum as it thinks fit in respect of the costs reasonably incurred by him in
relation to the inquiry
(5) This section shall not apply to any person referred to in subsection (1) who
is-
(c) a person who and in respect of whom it appears to the Tribunal has by
his own acts or omissions caused or brought about (whether wholly or
in part) the Tribunal to inquire into his conduct subsequent to the
institution of the inquiry under section 16 or during the course of that
inquiry; or
(d) any other person who and in respect of whom it appears to the Tribunal
has by his own acts or omissions caused or brought about (whether
wholly or in part) the institution of the inquiry under section 16."
The general principles to be followed when considering
83
penalties and orders have been set out in previous Insider Dealing
Tribunal reports. For our purposes we do no more than repeat selected
observations from the Success Holdings Report which apply with equal
significance to the Parkview inquiry.
Firstly 'To say that the reputation of Hong Kong's securities market is
an issue of importance to this territory is not to make a policy
statement, but is a statement of the obvious. It is also stating the
obvious to remark that insider dealing and the degree to which it
may prevail are matters that materially affect that reputation. The
legislature has acknowledged these facts by enacting new laws
conferring on the Insider Dealing Tribunal significant powers in the
form of penalties, absent from the Ordinance's predecessor. Still,
the conduct is not a criminal offence, and the maximum
disqualification from commercial office is five years. Those are
the parameters within which we must address the question of
appropriate orders in this case."
Secondly "THE APPROACH TO SECTION 23
(1) The fact that [the insider dealer] presented to the SFC
investigators a false story does not go in aggravation of the
penalties which would otherwise be imposed. It is merely that
he who admits fault at the very outset will be credited for that
fact.
(4) Financial penalties are to accord with the gravity of the wrongdoing, and are not to be increased by reason of the substantial
wealth of the insider dealer,
(6) In determining whether to disqualify an insider (dealer) from
holding office as a director of a listed company, or of listed
companies, there come into play a number of considerations.
The determination will take into account the need to ensure the
84
integrity of the securities market; to protect the public from
further abuse by that person of the privileged position of trust
which that office carries; to deter others from breaching that
trust; and to mark the disapproval of the investment community
with the conduct of the insider dealer.
(7) In determining whether to disqualify an insider dealer from
holding office as a director of a private company, one should
have regard to the connection, if any, of the company with the
insider dealing, and any relationship between the insider dealer
and the private company; and the impact upon the individual of
such a disqualification.
(8) Where an incident in, or in connection with, the inquiry, gives
rise to a justified sense of grievance, the Tribunal should
recognize and take that fact into account in determining the
appropriate penalties.
(9) In making its order under section 23(l)(b) and (c) and section
27, the Tribunal should have regard to the totality of the
financial burden imposed by these orders.55
Mitigation:
Mr. Tong in his helpful submission to us raised a number of
matters in mitigation. We accept that much of the mitigation advanced
is relevant mitigation and has had a bearing on our decisions which are
recorded later in this Chapter. We therefore summarize the more
significant matters which we have taken into account in Mr. Hwang's
favour.
(1) We accept that although Mr. Hwang was a "person connected35
to HKPVG as defined by s. 4(1 )(c) of CAP 395, he did not abuse
a position of trust which he held in the company when making
his unlawful purchases of shares.
(2) As we have already stated his primary motive was not simply to
make a profit for himself. His primary motive was to improve
85
the HKPVG shares price on the day he went to Beijing to make
the offer of a large placement to UNIPEC. However he must
have realized that this strategy would inevitably result in an
Increase in the value of his own shareholding when the
placement went through. This is the profit for which we
impose penalties.
(3) The successful placement was beneficial to HKPVG and, in turn,
to its shareholders also.
(4) The fact that Mr. Hwang did not realize at the time of his
purchases that they would be in breach of s. 9(1 )(a) of CAP 395
does not excuse him but it does, in the circumstances of this case,
provide some mitigation. Although the reason he gave to the
Tribunal for buying the shares was one we rejected he always
said both to the SFC investigators and to the Tribunal that he
"accepted responsibility" for the purchases. The rules against
insider dealing in CAP 395 are strict. We fear that there are
still some members of the business community in Hong Kong
who do not fully appreciate or understand the stringency of the
provisions. We accept that in August 1993 Mr. Hwang was
such a person. Had he been advised, at the time, that because of
his privileged position and his knowledge of forthcoming events
any purchases by him at that time would be in breach of s.
9(1 )(a), he may well have accepted the advice and not purchased
the shares.
Penalties
First, we will deal with the question of financial penalties under
ss. 23(l)(b) and (c).
By this section the insider dealer may be ordered to repay his
profit to the Government. Mr. Tong submits that because the
section only says "profit" and does not say, for example, "Including
any assumed profit or notional profit'9 we should make no order
86
under this section because Mr. Hwang never sold his shares and in
fact, we are told he still has them. We reject this submission. We
find that the fact that he chose not to realize the profit does not
preclude the making of an order. We have calculated the profit
element in this case in the following way.
The profit is the value of the unlawfully purchased shares after
the relevant information became public less their purchase price.
The latter figure is easy to calculate. On August 13th 1997 MiHwang purchased 974,000 shares at different prices:884,000 at $2.725
62,000 at $2.75
8,000 at $2.825
20,000 at $2.9
Total
= $2,408,900
= $170,500
- $22,600
= $58.000
$2,660,000
The true value of the shares after the release of the information
to the public is not so straightforward. We have considered three
different figures. Firstly the closing price on Tuesday, August
17th ($3.575) - the day the information was available through the
SEHK teletext. Secondly the closing price on Wednesday, August
18th ($3.825) - the day the information appeared in the Chinese and
English newspapers. Thirdly an average of the closing prices for
five days after the first announcement ($4.075).
The Ordinance is silent on how profit should be defined or
measured. We have considered the learned commentary on the
subject at pages 274-284 of the P.LI.L. Report. That report cites
the American definition which includes the words "the value of that
security as measured by the trading price of the security a
reasonable period after public dissemination of the non-public
information". The application of this approach would favour the
taking of an average closing price over a number of days after the
announcement. However one must be careful also to ensure that
figure arrived at has not been influenced by any events other than
the release of the price sensitive information. Where there is some
evidence of other unrelated events which could have had an effect
87
on the price the averaging exercise becomes less reliable.
Therefore as an exercise in caution and to be fair to Mr. Hwang
we have selected the closing price on the day of the press
announcement (August 18th) as the relevant figure ($3.825) even
though the highest price during that day was $3.875. This is
because it is lower than an average over, say 5 days and could not
have been influenced by other events that week. This means the
profit is>
($3.825 x 974,000) - $2,660,000 = $1,065,550
We will therefore make an order that this sum be repaid to the
Government under s. 23(1 )(b).
(ii) s. 23(l)(c)
By this section we are empowered to impose a further financial
penalty up to three times of the amount of the profit. The
maximum would therefore be $3,196,650.
For the same reason as already stated, namely that Mr. Hwang
was not primarily motivated by personal greed we consider a
penalty at the lower end of the scale is appropriate under this section.
We are not concerned with his ability to pay as he has substantial
wealth and we are satisfied that any reasonable penalty can be met.
We do not make the penalty higher than would otherwise have been
appropriate because of his means,
In all the circumstances we consider a multiplier of one is fair
and reasonable and we therefore order the sum of $1,065,550 to be
paid.
We turn now to the difficult issue of disqualification under s.
(iii) s.23(l)(a)
This section empowers the Tribunal to disqualify an insider
dealer for a maximum of five years from being a director etc. of any
company or taking part in its management. The section can be
imposed in full or in part. The order could apply to directorships
etc. in any company or in specified companies. The order could be
confined to directorships only and exclude the element of
management. These are all possibilities.
We have considered the matter by answering three questions:(1) Should we make any order under s. 23(l)(a)?
(2) If so, in what form? and
(3) For how long?
Mr, Tong has urged us to answer the first question in the
negative. In support he invites us to take into account the following
mitigating factors:(i) The companies of which Mr. Hwang is presently a director,
namely Chyau Fwu and Kompass are both private
companies and are unconnected with the insider dealing.
(ii) The insider dealing which has been proved is not an
example of an abuse of trust for personal gain. Although
the Tribunal has found him to be "connected" to the
company, it is submitted that he was not involved with the
day to day management of the company.
(iii) The insider dealing was an isolated transaction caused partly
by ignorance. Such a transaction will not recur as Mr.
Hwang now has a greater understanding of the regulations.
(iv) A disqualification is not necessary either to protect the
investing public or to protect the integrity of the market.
89
On the other hand it would cause "difficulty and confusion*5
in Mr. Hwang's family companies and HKPVG.
These are compelling points and have weighed heavily in our
decision to make a lenient order under s. 23(1 )(a) but we feel we
cannot accede to the plea to make no order at all.
Whereas we accept that there will be cases where no order
would be appropriate, we find that this is not such a case. We
consider that in spite of the genuine mitigation a disqualification
order is necessary primarily to protect the integrity of the securities
market but also to emphasize the caution which must be exercised
when deciding whether or not to deal at sensitive times and so to
deter others from breaching the ordinance in the same or similar
way.
However giving foil weight to the mitigation advanced we have
decided, in answer to our questions (2) and (3) above, to order a
disqualification in a restricted form and for as short a period as is
reasonable whilst remaining faithful to our public duty.
Our order will be that Mr. Hwang shall not without leave of the
High Court, be a director or a liquidator or a receiver or manager of
the property of Hong Kong Parkview Group Limited and its
subsidiaries or in any way, whether directly or indirectly, be
concerned or take part in the management of Hong Kong Parkview
Group Limited and its subsidiaries for a period of six months.
In this context we recite also s. 23(5)"Every order made in respect of any person under subsection (1)
or under section 24(1) shall be notified by the Tribunal in
writing to that person and shall take effect from the date on
which it is notified to him, or such later date as is specified in
the notice, notwithstanding that an appeal against the decision
may be made under section 31 or that the time limited for the
making of such an appeal has not expired."
90
Expenses
Section 27 of CAP 395 empowers the Tribunal to make an order
for the expenses of and incidental to the inquiry to be paid by the insider
dealer to the Government. Like all similar statutory powers it is
discretionary. We start with the principle that in most cases a s. 27
order will follow the event.
On the issue of expenses Mr. Tong made a preliminary
submission that the "expenses" envisaged by s. 27 do not include the
Attorney General's Chambers' legal costs. He submitted that the
absence of the word "costs" in s. 27 should be interpreted as meaning
that there was no provision to order the insider dealer to pay any legal
costs. In support of this submission he drew our attention to s. 26A
which does use the words "costs" when providing for a costs order in
favour of people who have been involved in the inquiry and who have
not been identified as an insider dealer.
We regarded the submission as ingenious but without merit.
We are satisfied that "expenses" includes any expense which has been
necessarily incurred in order to properly carry out the inquiry.
Common sense dictates that this includes the costs or expenses incurred
by the Legal Department.
We have decided also to give effect to the provisional remarks
made by the Chairman when opening the mitigation hearing. We
simply repeat them "Finally on the question of costs we hope it will assist you if we
set out our provisional approach to the calculation of costs before
you make your submission. Firstly we propose that the potential
costs order in this inquiry be confined to the expenses incurred as a
result of holding the inquiry only. This means that the costs of SFC
investigation will not be included. We do not state that as a matter
of law that it cannot be included, however we have decided to
exclude those expenses (a) as a matter of fairness and (b) to keep in
line with the previous costs orders in previous inquiries. Secondly
the cost of this inquiry will be divided into two heads:91
(a) the costs of the Attorney General's Chambers
(b) the Tribunal's costs
As to (a) - the Tribunal will in due course receive a schedule of
the Attorney General's Chambers' costs.
As to (b) - the Tribunal's costs, we will include some or all of
the witness' expenses, the costs of the salaries and fees of the three
members of the Tribunal, the costs of the verbatim reporters, the
court interpreters and the costs of the Tribunal's staff. No amount
will be included in the Tribunal's costs for stationery, machinery or
accommodation. The Chairman's costs have been rounded down to
reflect the amount of time actually spent on this inquiry and in
approximate percentage terms since the commencement of the
Parkview inquiry as follows:October96
November 96
December 96
January 97
February 97
50%
100%
60%
100%
25%
Had both Mr. Hwang and Mr. Sin been identified as insider
dealers we would have apportioned costs between them so as to
reflect their respective involvement so far as reasonably practicable.
As Mr. Sin has not been so identified we would only condemn Mr.
Hwang in costs in that proportion which would have followed had
there been findings against both.
All these matters however are of course subject to the overriding
principle that any costs award is in the Tribunal's discretion."
Having decided that a s. 27 order should be made and what items
should come within the meaning of expenses we come finally to the
question of whether Mr. Hwang should pay all or only part of the
92
expenses incurred. Mr. Tong again makes valid points. He makes
them in support of his contention that there should be no order under s.
27. They do not support an argument for no costs but we agree that
they merit a reduction from a 100% costs order. There are three matters
we are invited to take into account.
(1) The amount of preparation required and the length of the inquiry
itself would have been less if Mr. Hwang has been the only
implicated person. The costs must have been increased by the
presence of Mr. Peter Sin in the inquiry. Mr. Hwang should
not be liable for such extra costs. We have considered however
that this factor only results in a relatively small reduction
because the same witnesses would have given evidence
(including Mr. Sin) if Mr. Hwang had been the only implicated
person. The length of their evidence may have been slightly
shorter.
(2) Part of the original allegation was that Mr. Peter Sin was acting
on behalf of Mr. Hwang when purchasing HKPVG shares.
This aspect of the inquiry was abandoned during the hearing but
not before time and money had been spent on investigating it
and inquiring into it.
(3) Mr. Hwang should not be condemned in costs for challenging
the allegations because the issues gave rise to difficult legal
points concerning the meaning of "relevant information" and the
application of s. 10(3) of CAP 395. Whilst we accept the
correctness of this observation we do not think it should have a
material effect on the quantum of costs.
Mr. Tong also reminded us that an order under s. 27 should be
compensatory and not punitive.
Bearing in mind all the above matters we will make an order that
Mr. Hwang be liable for 80% of the expenses incurred by holding this
inquiry. A schedule of expenses will be provided to Messrs. Richards
Butler as soon as it has been finalized and approved by the Tribunal.
93
Mr. Peter Sin's application for costs
Our final task is to consider Mr, Harris's application for his lay
client's costs to be paid by the general revenue pursuant to s. 26A of
CAP 395. Section 26A was added to the Ordinance in 1995. Its terms
are self explanatory. We have already set them out at page 83 of our
report. Mr. Marash has invited us to make no order for costs in Mr,
Sin's favour after consideration of ss. 26A(5)(c) and (d). Our choices
are to make no order or award him his costs in full or in part.
Again, the starting point when exercising our discretion is that
costs follow the event. Mr. Marash reminds us of aspects of Mr. Sin's
conduct at the time of the events which were at the heart of the inquiry
and at the time he was interviewed by the SFC which, he submits, would
qualify for our consideration under s. 26A(5)(d).
For the purpose of determining costs we do not propose to
examine in detail those parts of the evidence and the statements upon
which Mr. Marash and Mr. Harris have made their respective comments.
We have adopted a more general approach. We are satisfied that Mr.
Sin is not entitled to all his costs. We have concluded that a fair and
just award would be that he recover two thirds of his costs from the
general revenue. We have reduced his costs order because of the
provisions of s. 26A(5)(d).
The Ordinance is silent on the machinery for payment of such
costs [ss. (3) and (4) apart]. The machinery we proposed and with
which Mr. Sin's solicitors and counsel agreed was that they would
submit their bill of costs to the Attorney General's Chambers for
agreement. If they were not agreed the Tribunal would intervene to
endeavour to bring about an agreement. If there was still no agreement
then the bill would be submitted to a Master of the Supreme Court for
taxation.
94
ORDERS PURSUANT TO
SECTIONS 23(1\ 26A AND 27 OF CAP 395
The Insider Dealing Tribunal of Hong Kong makes the
following orders arising out of its inquiry into the trading of the listed
securities of Hong Kong Parkview Group Limited between August 13th
1993 and August 16th 1993 (inclusive):(1) Pursuant to section 23(l)(a) of the Securities (Insider Dealing)
Ordinance (hereafter referred to as "CAP 395") Mr. HWANG
Chou-shiuan shall not without leave of the High Court be a
director or a liquidator or a receiver or manager of the property
of Hong Kong Parkview Group Limited or any of its subsidiaries
or in anyway whether directly or indirectly, be concerned or take
part in the management of Hong Kong Parkview Group Limited
or any of its subsidiaries for a period of six months commencing
from the date of service of this notice on Mr. HWANG Choushiuan.
(2) Pursuant to section 23(l)(b) of CAP 395 Mr. HWANG Choushiuan shall pay to the Hong Kong Government the sum of
HK$1,065,550 forthwith.
(3) Pursuant to section 23(l)(c) of CAP 395 Mr. HWANG Choushiuan shall pay to the Hong Kong Government a penalty of
HK$1,065,550 forthwith.
(4) Pursuant to section 27 of CAP 395 Mr. HWANG Chou-shiuan is
ordered to pay 80% of the expenses of and incidental to the
inquiry.
(5) Pursuant to section 26A(1) and (2) it is ordered that two thirds of
the costs of Mr. Peter SIN Kit-leung be paid out of the general
revenue and that such costs be taxed if not agreed.
95
ACKNOWLEDGEMENTS
The Tribunal wishes to express its appreciation for the
considerable assistance and co-operation given by all concerned in this
inquiry. The research and presentation by Mr. Ronny Tong, Q.C.
assisted by Mr. Godfrey Lam instructed by Messrs. Richards Butler for
Mr. Hwang and by Mr. Jonathan Harris instructed by Hastings & Co. for
Mr. Peter Sin was of the highest order. We are similarly indebted to the
counsel to the inquiry, Mr. Daniel Marash assisted by Miss Serlina Lau
for their fair and thorough presentation of the evidence and the law.
The smooth running administration of the Tribunal was assured
by the unfailing reliability of its staff, namely the Tribunal Secretary, Mr.
Patrick Chung Chan-yau, the Chairman's Secretary, Miss Mary Au Laichun, and Ms Leung Yim-foon and Mr. Michael Wong Kam-chiu.
The Tribunal's Interpreter, Ms Susanna Chan, performed a
difficult task with considerable skill and Verbatim Reporters provided
their most valuable services with their usual speed, efficiency and
accuracy.
Finally, the Chairman would like to express his particular
appreciation for the contributions made by Mr. Kennedy Liu Tat-yin and
Mr. Simon Lam Siu-lun who have been the two other Tribunal members.
It has been a pleasure to work with them. , They have been of the
greatest assistance both to the Chairman and in the inquiry generally.
The business community of Hong Kong is fortunate that people such as
Mr. Liu and Mr. Lam are willing and able to offer their time, expertise,
experience and skill as Insider Dealing Tribunal members.
96
The Honourable Mr. Justice Burrell
Chairman
LT
Mr. Kennedy Liu Tat-yin, CPA, MBA, FHKSA,
Member
FCCA, FCIS, PCS
Mr. Simon Lam Siu-lun, BA, ACA, AHKSA,
Member
FTIHK, CPA
March
1997
97
Annexure A
Example of Salmon A and Salmon B letters
CHAMBERS
CIVIL
3
^F" HIGH BIOCIC
:
81710 HtCAGC HX
QUEENSWAY GOVERNMENT OFFICES
66 QUEENSWAY, HONG KONG'
Telex: 81710 HKAGC HX
: 852-2869 0670
*«
852-28681068
?S2
852-28681068
*»««OurRef.:
*S«KYourRef.:
«•«• Tel. No.:
5 September 1996
Hong Kong Parkview Group Ltd.
11/F World-Wide House
19 Des Voeux Road, Central
Hong Kong
(Attn: Mr. HWANG Chou-shiuan)
Dear Sir,
Insider Dealing Tribunal
Hong Kong Parkview Group Limited (<CHKPVG")
On the 9th July 1996, the Financial Secretary, by Notice pursuant to section 16(2)
of the Securities (Insider Dealing) Ordinance, Cap.395, Laws of Hong Kong f the
Ordinance"), required the Insider Dealing Tribunal to inquire into and determine :
(a)
whether there has been insider dealing in relation to the listed securities of HKPVG
arising out of the dealings in the listed shares of HKPVG by Mr. HWANG Choushiuan during the period from 13th August 1993 to 16th August 1993 (inclusive);
(b)
in the event of there having been insider dealing as described in paragraph (a), the
amount of any profit gained or loss avoided as a result of such insider dealing.
It appears to me that your conduct will be the subject of die Inquiry or that you are
implicated and concerned in the subject matter of the Inquiry.
The Inquiry has been convened as a result of an investigation by the Securities and
Futures Commission ("SFC") into die aJQEairs of HKPVG which brought to fight evidence
which suggests that you may have been an insider dealer.
I am enclosing with this letter a summary of evidence which wfll serve as a guide
to the allegations which may be made against you. In due course, you, (or your legal
advisers on your behalf), wfll receive copies of statements and other evidence previously
obtained by fhe SFC on
the
this evidence
by the SFC
The
members will be
by the Tribunal to act as
The Tribunal
require you to attend
represented by a
witnesses concerning
is
It Is
to adduce
the
is the
to act in the
for the
to
into
it and give
or
and
Mr.
and two^Iay
1
for
at
and will
to
Your are
to be
to the Tribunal to call any material
Unless you are
to the contrary, the
will commence on the 17th
September 1996 at 4;3Gp.m at
16
Court Building, Queensway. The
hearing that day will be a preliminary
and is
to last more than two hours.
If you wish to be
the Tribunal* application
be made at the
prelimkasy hearing. Your
or
be
at the hearing to make
such application. If you do not
to be
represented, you must appear in person
at the preliminary hearing.
It is anticipated that the Tribunal will commence its pubic
to hear evidence
on the 14th October 1996. Thereafter, it is intended that the Tribunal will sit to hear
evidence every weekday between 9:15 a.m. and 1 p.m.
If you intend to instruct a solicitor and/or counsel to represent you, I will be
grateful if you or your solicitor could notify me through Miss Seriina LAU at the
following address prior to the preliminary hearing.
Yours faithfully.
Daniel Marash
Nominated for appointment as
Counsel to the Insider Dealing
Tribunal
Address of Miss Serlina LAU:
Chambers
3/F.,BBgh Block
Queensway Government Offices
66 Queensway, Hong Kong
TeL No.:2867 2306
ATTORNEY
CHAMBERS
CIVIL DIVISION
mm
,
A4tffi •' 81710 HKAGC HX
«HlftX : 852-2869 0670
852-28681068
^^^^
3/F, HIGH BLOCK
QUEENSWAY GOVERNMENT OFFICES
03 QUEiNSWAY, HONG KONG
Telex: 81710 HKAGC HX
Fax: 862-2869 0670
852-28681068
Our Ret:
YourRef.:
Tel. No.:
5 September 1996
Goodwill (HK) Securities Ltd.
20/F Nine Queen's Road, Central
Hong Kong
(Attn: Ms Charlniane Wong Shu-man)
Dear Madam,
Insider Dealing Tribunal
Hong Kong Parkview Group Limited (C<HKPVG")
On the 9th My 1996, the Financial Secretary, by Notice pursuant to section 16(2)
of the Securities (Insider Dealing) Ordinance, Cap.395, Laws of Hong Kong ("die
Ordinance"), required the Insider Dealing Tribunal to inquire into and determine :
(a)
whether there has been insider dealing in relation to the listed securities of HKPVG
arising out of the dealings in the listed shares of HKPVG by Mr. HWANG Choushiuan during the period from 13th August 1993 to 16th August 1993 (inclusive);
and
(b)
in the event of there having been insider dealing as described in paragraph (a), the
amount of any profit gained or loss avoided as a result of such insider dealing.
You will know, having been interviewed by officers of the Securities and Futures
Commission ("SFC"), that an investigation has been conducted into the afiairs of
HKPVG. Further to that investigation, it appears that you are a person who may be
concerned in the subject maker of the inquiry and as such may be able to assist the
Tribunal.
It is likely that the Tribunal will require you to attend before it to give evidence, in
which event you wifl receive a Notice specifying a time, date and place.
As a person concerned in the subject under inquiry you are entitled to be present at
any sitting of the Tribunal and may be entitled to be represented by a banister or a
solicitor. I should tel yrn^
suspecting that you are
this in mind whea
'the
in my way m
or mot to be
has no
md you
for
to bear
If you wish to be
you
such an application through your
counsel or solcitor to the Tribunal at a
hearing. Unless you are notified to the
contrary, the preliminary hearing wil commeace on the 17th September 1996 at 4:30p.m
at court 16 of the Supreme Court
Queensway. The Chairman of the Tribunal
will be Mr. Justice BurreE
You or your lawyer, if you choose to appoint one, should not hesitate to contact
me through Miss Serlka Lau at the following address if you wish to discuss the
arrangements for the inquiry, although I should point out that, as nominated Counsel to
the Tribunal, it would not be proper for me to discuss your evidence with you.
Yours faithfully,
Daniel Marash
Nominated for appointment
as Counsel to the Insider
Dealing Tribunal
Address of Miss Serlka LAU:
Attorney General's Chambers
Civil Division
3/R, High Block
Queensway Government Qfijces
66 Queensway, Hong Kong
Tel No.:2867 2306
Annexure B
Statement of Agreed Facts
INSIDER DEALING INQUIRY
RE: HONG KONG PARKVIEW GROUP LIMITED
STATEMENT OF AGREED FACTS
1.
The statements of the following persons (containing references to documents
exhibited thereto) were made to officers of the Securities and Futures
Commission ("SFC") on the dates shown thereon:
(i)
Bundle 2, pp. 264-318
HWANG Chou-Shiuan
Bundle 2, pp. 319-342
(ii)
Bundle 2, pp. 132-158
Peter SIN Kit-leung
Bundle 2, pp. 159-184
(iii)
George WONG Kin-wah
Bundle 2, pp. 343-389
(iv)
HANG Yun-long
Bundle 2, pp. 390-417
(v)
Daisy LO Mee-lin
Bundle 2, pp. 185-224
Bundle 2, pp. 225-263
(vi)
Bundle 1, pp. 99-195
FUNG Ka-pun
Bundle 1, pp. 196-221
(vii)
LEUNG Chi-chiu
Bundle 1, pp. 222-332
(viii)
Charlmane WONG Shu-man
Bundle 1, pp. 1-65
(ix)
Alice LEE Kwan-fong
Bundle 1, pp. 66-98
(LIT«I34-012.081)
- 1-
(x)
2.
Irene SO Wai-yin
-
Bundle 2, pp. 1-107
The exhibits to the statements referred to in paragraph 1 above are those
contained in Bundles 1 and 2 immediately after the said statements and
marked with prefixes being first letters of each of the names of the statement
makers.
3.
Ming Ren Investment and Enterprises Limited ("Ming Ren Investment") is a
limited company incorporated in Hong Kong on 20th February 1973. Its
shares became listed in Hong Kong in March 1973.
4.
Ming Ren Holdings Company Limited ("Ming Ren Holdings") is a limited
company incorporated in Bermuda on 23 September 1992 as an exempted
company pursuant to a Certificate of Incorporation issued on the same date.
5.
On 2 October 1992, the following persons were elected to serve as directors
and alternate directors of Ming Ren Hoidings:-
6.
(1)
Wong Kin Wah George ("George Wong");
(2)
Hwang Yiou Hwa Victor ("Victor Hwang11);
(3)
Hwang Teh Hwa Tony ("Tony Hwang");
(4)
William Michael Catley;
(5)
Robert Simon Fraser;
(6)
Chan Choy Yin;
(7)
John A. Ellison (with Donald H. Malcolm as his alternate); and
(8)
John C.R. Collins (also with Donald H. Malcolm as his alternate).
Under a scheme of arrangement, on 24 November 1992, Ming Ren Holdings
became the holding company of Ming Ren Investment. All the issued shares
in Ming Ren Investment were cancelled and the former shareholders were
allotted the same number of shares in Ming Ren Holdings as they previously
(LI7\H 134-012.081)
- 2 -
held in Ming Ren Investment. Ming Ren Holdings shares could be traded on
the Hong Kong Stock Exchange ("SEHK") from 24 November 1992.
7.
By a Certificate of Incorporation on Change of Name dated 5 January 1993,
Ming Ren Holdings changed its name to Hong Kong Parkview Group
Limited ("HKPVG").
8.
On 8 January 1993 the authorised share capital of HKPVG was
HK$850,000,000,
divided into 850,000,000 shares of HK$1
each.
445,824,938 HKPVG shares were issued and fully paid on the said date.
9.
On 13 August 1993, there were 445,824,938 issued shares in HKPVG. The
shareholders in HKPVG on that date included:
10.
Hwang Chou Shiuan ("C.S. Hwang11)
30,000,000 (6.73%)
George Wong
10,000,000 (2.24%)
Kompass International Limited ("Kompass")
293,674,138 (65.87%)
C.S. Hwang is the father of>
(1)
George Wong;
(2)
Victor Hwang;
(3)
Tony Hwang; and
(4)
Hwang Yiu Hwa Richard ("Richard Hwang").
11.
C.S. Hwang was the Chairman of Chyau Fwu Group.
12.
C.S. Hwang was the Chairman and Director of the Board of Directors of
Ming Ren Investment until he resigned from the Board on 4 June 1992. C.S.
Hwang was never the Chairman or a Director of HKPVG (or Ming Ren
Holdings, as HKPVG was formerly called).
(LITM134-012.081)
13.
C.S. Hwang retained and still maintains an office in the same premises as
HKPVG at 11th Floor, Worldwide House, 19 Des Voeux Road Central, Hong
Kong.
14.
At all material times, C.S. Hwang was not a substantial shareholder, director,
officer or employee of HKPVG within the meaning of the Securities (Insider
Dealing) Ordinance, Cap.395 ("the Ordinance").
15.
Kompass is a limited company incorporated under the laws of the British
Virgin Islands on 6 October 1992.
16.
Between 7 October 1992 and 20 December 1993 (both dates inclusive) the
shareholders and directors of Kompass were as follows:-
(1)
George Wong;
(2)
Victor Hwang; and
(3)
Tony Hwang,
each held one share.
17.
C.S. Hwang and Richard Hwang each became directors and additional
shareholders of one share in Kompass on 21 December 1993.
18.
China International United Petroleum & Chemicals Co., Ltd. ("UNIPEC") is
a joint venture company in the People's Republic of China ("PRC") formed
between China Petrochemical Corporation ("SINOPEC") and China National
Chemicals Import and Export Corporation ("SINOCHEM") on 18 February
1993,
19.
Core Bundle, pp. 194-195 is a true copy of the minutes of the meeting of
directors of Super Power Resources Limited on 26 April 1993 wherein it was
resolved that (i) the transfer of one of the two shares held by Ming Ren
2.081)
- 4 -
Investment each to HKPVG and UNIPEC be approved; (ii) the resignations
of C.S. Hwang and George Wong as directors be accepted; and that (iii) Jiang
Yun-long be appointed as a director.
20.
On 26 June 1990 Mansion House Securities (F.E.) Limited ("Mansion
House") opened a share trading account in the name of C.S. Hwang.
21.
On 7 July 1993, C.S. Hwang signed the Uniform Margin Client's Agreement
with Mansion House in relation to the aforesaid account.
22.
On 12 August 1993, C.S. Hwang bought 10,000 HKPVG shares at $2.675 per
share and sold 10,000 shares at $2.70 per share on the same day.
23.
A total of 974,000 HKPVG shares were bought by Mansion House for the
account of C.S. Hwang on 13 August 1993.
24.
On 13 August 1993, 100,000 HKPVG shares were purchased at prices
ranging from $2.825 to $2.90 through an account in the name of Peter Sin
with Mayfair Securities Limited.
25.
On 13 August 1993, C.S. Hwang passed the immigration counter at Kai Tak
Airport at 11:47 am and flew to Beijing with his daughter, Sally Chen by
flight CA102, which departed for Beijing at 12:56 pm.
26.
On 13 August 1993, flight CA102 touched the ground at Beijing at 3:30 pm
and parked at the bay at 3:38 pm.
27.
The document at Core Bundle p. 87 is a true copy of the invoice issued by
Poloair Travel Ltd. dated 13 August 1993 in the amount of HK$6,780.QO
concerning the purchase of two first class air tickets for a one-way journey
from Hong Kong to Beijing departing on 13 August 1993 for C.S. Hwang
and Sally Chen.
(LIT-H134-012.081)
- 5 -
28.
On 14 August 1993 George Wong went through Hong Kong immigration at
9:39 am on his way to the PRC.
29.
On 14 August 1993, C.S. Hwang returned to Hong Kong from Beijing by
flight CA101, which departed from Beijing at 7:50 am and arrived in Hong
Kong at around 11 :OQ am.
30.
On 16 August 1993, Jiang Yun-long, the General Manager acting on behalf
of UNIPEC, sent the fax at Core Bundle pp.21-22 (Exhibit File 1, pp.11 and
11 A) to HKPVG marked for the attention of C.S. Hwang with the covering
sheet at Core Bundle pp.20.
31.
On 16 August 1993 at 4:54 pm George Wong passed through Hong Kong
immigration returning from the PRC.
32.
On the morning of 17 August 1993 before the Stock Exchange of Hong Kong
Limited ("SEHK") opened, Sammy Leung informed the SEHK of the
intended placement of 89 million shares in HKPVG to UNIPEC by Kompass.
Although Sammy Leung suggested a suspension in the trading of HKPVG
shares to the SEHK, SEHK decided that a suspension of trading was not
necessary.
33.
The document at Core Bundle p. 23 (Exhibit File 1, p. 1) is a true copy of
the teletext announcement made at 10:02 am on 17 August 1993 concerning
the placement of 89 million HKPVG shares to UNIPEC.
34.
On 17 August 1993, at 10:22 am UNIPEC sent a fax to C.S. Hwang
enclosing a copy of some brief information about UNIPEC and its decision
to purchase shares in HKPVG (Core Bundle, pp. 128-130).
35.
On 17 August 1993 a Board meeting of HKPVG was held at which it was
resolved that HKPVG would issue 89 million new shares to Kompass at
(LfT.Hr34.OI2.081)
- 6 -
$2.85 each, to be allotted upon receipt of an application therefor.
The
minutes of the said meeting are at Bundle 2, p. 383.
36.
On 17 August 1993 UNIPEC opened a share trading account with Goodwill
Investment Services Limited and, on or about the said date in August, Jiang
signed an undated Client Information Statement (Bundle 1, pp. 125-126) and
a Uniform Cash Client's Agreement dated 17 August 1993 (Bundle 1, pp.
127-130).
37.
On 17 August 1993 Kompass sold 89,000,000 shares to UNIPEC at $2.85
each. The document at Bundle 2, p. 412 is a true copy of the contract note
in respect of the purchase of 89 million shares in HKPVG by UNIPEC (trade
date: 17 August 1993 and settlement date: 19 August 1993).
38.
On 18 August 1993 a press announcement of the placement was published in
the newspapers. The document at Core Bundle p. 25 (Exhibit File 1, p. 2)
is a true copy of an announcement made in the South China Morning Post on
18 August 1993 concerning the placement of 89 million HKPVG shares to
UNIPEC.
39.
On 19 August 1993, Mr. Keniel Wong of SEHK wrote the letter at Core
Bundle p. 27-28 (Exhibit File 1, pp. 4-5), to Goodwill, marked for the
attention of Sammy Leung, the Managing Director of Goodwill
40.
On 20 August 1993, Charlmane Wong of Goodwill prepared the draft letter
to the SEHK on behalf of Sammy Leung at Core Bundle p. 29-30 (Exhibit
File pp. 6-7). The said draft letter was amended by Charlmane Wong after
she spoke to Peter Sin on the phone. The fost-draft reply was found by SFC
officers in a file kept by Goodwill
(LIT\H 134-012.081)
-7-
41.
On 25 August 1993, Ifee-seeefid draft of Goodwill's letter to SEHK at Core
Bundle pp. 31-33 (Exhibit File 1, pp. 8-10) was faxed under a cover sheet
from Sammy Leung to Peter Sin .
42.
The reply dated 31st August 1993 at Core Bundle pp. 34-35 (Bundle 1, pp.
64-65) was sent by Goodwill to the SEHK on that date.
43.
On 21 September 1993, George WONG caused the letter at Core Bundle pp.
38-40 (Exhibit File 1, pp. 12-14), signed by him, to be sent to the SFC in
response to a letter from the SFC at Core Bundle pp. 36-37 (Exhibit File 1,
pp, 42-43) about the background to the announcement on 17 August 1993 of
the placement of 89 million HKPVG shares to UNIPEC.
44.
On 7 October 1993, Messrs. Richards Butler, Solicitors, acting on the
instructions of HKPVG, wrote the letter at Core Bundle pp. 45-48 (Exhibit
File 1, pp. 15-18) to the SFC in response to letters from the SFC dated 23
and 27 September 1993 at Core Bundle pp. 41-42 and pp. 43-44 (Exhibit File
1, pp. 44-45 and pp. 46-47) respectively concerning the placement of 89
million HKPVG shares to UNIPEC, which was announced on 17 August
1993.
45.
The Immigration Department records (with legend attached) at Core Bundle,
pp. 4-6 (Exhibit File 1, pp. 28-30) and Core Bundle, pp. 7-8 (Exhibit File 1,
pp. 40-41) properly record the travel movements in and out of Hong Kong
of C.S. Hwang and George WONG respectively between 10 and 20 August
1993.
46.
The information contained in the letter of Jardine Airport Services Limited
at Core Bundle, p.3 (Exhibit File 1, p. 21) is correct. The flight manifest at
Core Bundle, pp. 1-2 (Exhibit File 1, pp. 26-27) is a true copy of the flight
manifest referred to in the aforesaid letter relating to flight CA102 to Beijing
on 13 August 1993.
(L!T\H 134-012.081)
•
- 8 -
47.
The document at Core Bundle, pp. 57 (Exhibit File 1, p.22) is a print-out of
the records of the SFC showing the details of shareholders in HKPVG, based
upon information filed by such shareholders under the Securities (Disclosure
of Interests) Ordinance, Cap. 396, between 21 June 1993 and 2 December
1994.
48.
The document at Core Bundle, pp. 70-71 (Bundle 2, pp. 89-90) is an accurate
SEHK Stock Transaction Report showing the time, volume and price of
HKPVG shares purchased and sold on 13 August 1993 and the name of the
broker on the SEHK who executed such transactions.
49.
The document at Core Bundle, pp. 58-66 (Exhibit File 1, pp. 31-39) is a
correct statement of trading conducted on the SEHK in HKPVG shares from
4 January 1993 to 31 December 1993, showing the daily high, low, closing
price, percentage change, and number of HKPVG shares traded, as well as
the closing price of the Hang Seng Index on each day.
50.
The document at Bundle 2, pp. 310-314 correctly records the trading of C.S.
Hwang in HKPVG shares through MHSL between 7 July 1993 and 16
September 1993 and the total turnover on the SEHK in HKPVG shares on
each of the trading days shown therein.
51.
The document at Bundle 2, pp. 178-179 correctly records the trading of Peter
Sin Kit-leung in his own name in HKPVG shares through Mayfair Securities
Limited between 6 May 1993 and 22 October 1993.
52.
On 12 October 1993, Mr. FUNG Ka-Pun signed and caused the letter at Core
Bundle, pp. 52-53 (Exhibit File 1, pp. 48-49) to be sent to the SFC on behalf
of Goodwill in response to the letter written to Goodwill by the SFC on 8
October 1993 at Core Bundle pp. 49-51 (Exhibit File 1, pp. 50-52).
(LmHl34-012,081)
9-
53.
On 22 November 1993, Mr. FUNG Ka-Pun signed and caused the letter at
Core Bundle PP. 54-44 (Bundle 1, pp. 215-216) to be sent to the SFC on
behalf of Goodwill.
Dated the ^£.6
day of November 1996.
2.
JIEL MARASH——^
RICHARDS BUTLER
Counsel to the Tribunal
Solicitors for Hwang Chou Shiuan
ICQ.
Solicitors Peter Sin
(L!T\HI34^)12.08I)
- 10 *
Annexure C
Draft press announcement of placement with
Stock Exchange's comments
The Scocic Exchange of KocgKong Limited cakts no rwpcrulbility for the contents of this announcement,
maka* no representation as to its accuracy or completes* and expre^fy dbclainu wy liability
whatsoever for my losj howsoever arbfng from or fa rsllanc* upoa the whole or any part of the Cdstents
of this announcement.
THE KONG KONG PARKVIEW GROUP LIMITED
(Incorporated in Bennuda \vi»/\ limited litbilicy)
PLACING OF S^OOaOOO.SHARES AND SUBSCRIPTION
OF 89,000,000 NEW SHARES OF HKSi.OO EACH
The board of directors of The Hong Kong Parkviaw Group Limited (the "Company5') announces that
arrangements ware made on 1 7th August, 1993 for a private plawmcnc (the "Placing") of 89,000,000
Shares (the "Placed Shares") of HKS LOG each In the capital of the Company (the "Shares8) with Cfalna
International United Pettoleum and Chamicals Company, LImlced fUrupec*), a joint venture company
formed b^ween China Petrochemical Corporation (Chinese name) CSlnopec") and the Sinochem group
(Chinese name) ("Sinochem*) jvhojs independent of the Company, the directory chief execufiv® and
substantial shareholders of the Company or Its subsidiaries or their respective associates. Unlpec's
businesses include the import of crude -oil, import and export of petroleum products, petrochemical
products and overseas oil exploitation. Sinopc^ is a minbtry-levti enterprise under the direct supervision
and control of the Stats Council of the People8! Republic of China (the *PRC"). Fenced .in 1983.
Sinopec Is primarily responsible for the administration end development of the PRC's petrochemical
Industry. Sicopec controls 38 enterprises producing six nm'of groups of petrochemical products:
petroleum products, Intermediate petrochemicals, rtsins and plastics, synthetic fibrw, synthetic rubber
and fertilisers. The Sinochem group was established in 1990, Sinochem's operations include &s
/^processing and production of crude oil, petroleum products, fertilisers and ocher petrochemical products.
^ ^M A^KAYl. Z^<^jrtjsr^ <1 ^\^jjct^^/b^^
c<K ^/^^L/^
^
(?) CMu^A^. cdf ^6-tvd- 7f
Tne Placing was made at a pricsbf HK$2.85 par Shara, representing a premium of approximately [2,0]
per cent, over the average clbling price of HKS2.795 per Shara on The Stock Exchange of Hong Kong
Limited (the "Stock Exchange11) ovar the five trading days dndsd on 16th August, 1993, and a discount
of approximately 10,9 per cent, to the closing price of HJCS3.20 oti 16th August,. 1993, Tha Placed
Shares represent approximately 20.0 p6f Wrtt. of the Company's presenc issued share capital and are
existing Shares held by Kompass International Limited fKompass"), Korapass is a company owned by
.. Messrs. George Wong Ki^Vah, Victor Hwang Yiou Hwa, Tony Hwang Teh Hwa (who are directors
of the Company), Hwang Chou Shiuart (who is a substantial lhareholdex of the Company) and Richard
Hwang Yiu Hwa (collectively .the "Hwang Family Interests").
(J) v\j ^^ u<> a.
Pursuant to a subscriptioa agrwrnew dated 17th August, 1993 between Kompass ant/the Company, It
was agreed that Kompass will subscribe for 89,000,000 Shares ("New Shares") at aprlce of HKS2.85
per Share (the "Subscription"), All the New Shares will bo issued under the general/mandate granted to
the board of directors at the Special Genets! Meeting of the Company held
Following the Placing, the aggregate percentage held by the Hwang Family Imsresta will be reduced from {
approximately 74.8 per cdnt. to 54,8 per cent, of the existing issued share capital of the Company;
following the completion of the Placing and the Issue and aJlottnwt^pf the New Shares pursuant to the
Subscription, the Hwang Family Interests will hold spproxImatcly^O por cent, of the edarged issued
ahare capital of the Company. The New Shares will* upon issue, ranktoari pa*$u in all respects with the m
existing Issued Shares. The Company has agreed to reimlwtte KompaaWbr all out-of-pocket txpeaiea, .
itxcluding, Inter alia, brokarage. stock txchangt? tramscdon levy, ipecialllevy and stamp doty, Incurred ^
by it In respect of the Placing and the Subscription for the N*w Shares. V
**-** ;r
'^3
<i :> tf^rn CCJUCUiU. iwtCu^ 33^ 3-s~ ^ccs
<".
Q m a<u,^r^ -
-0019
wltfs
Tha Subscription wBI «abl« ?a* Coapany «j fesar a cloiec rdailombig_ Staoptc and Sinooitr
-M expand its opitaj b*s«. 1*« Ml proceed* of tie 5ufci«io<k«, in^wctu! j to ipprexl'aately HK$p^
million, will b« used to provide additional voticiflj wpigl »the Compaay.
>
/S/O^IM
pl^*^^?
.
The Subscription U conditional on CO 6* LWaf Coaduaaa art* Stock Exchanje granting Hiring of
and p«nusjtoa to deal in the Hew Shar«, and CD *« Bwnudi Motaary Authority approv!nZ tht issut
of the He-* Shtrsa.
Thi Placin? md the Subscription were amsgjd and »dvl*jd by Goodwiu'Capha! Limited.
! will be mad* to the Swck Esehinja for listing of aad {wnnUsion to deal in the 89,000,000
New Sharw,
3y Order of the Bosrd
Geor|c V/ong Zin Wah
Chairman & Managing Director
Date: 17th Augwt, 1993
<W
cnr
f LAt,r. * 1
-j-Q
Annexure D
UNIPEC fax dated August 16th 1993
f
UNITED FEZROLEUM & CSSMLCKLS ca,,LiD
TEIZFAX
C2F ?
18/01
;8,,,_JV
486019?
(
IJNIPFO
Wl *ir t.V
.
CHWA
[NT^J^ATJCNAL UNTTBD PfiTROLEW & CHEMICALS CO, ,LTff'
Date: August 16, 1993
The Hong Kong Parkview Group Ltd.
.13/R, -World Wide House _
• 19 DCS iVoeux Road Central
Hong Kong'
Dear Mr. Hwang:
<
RE: Application for Shares
Reference is made to the agreement "between .you 'and the
undersigned dated 13 August, 1993, we hereby agree to- "take"
up 89 •million shares in the 'capital of your Company
through our .nominee, Bank of China, Hong Kong, particulars
of which • are " set ' out below, at the price of ' HK$2.85 ^ per
share and agree to take the shares hereby applied for
subject to arid, to be bound by the provisions - of the
Memorandum & Articles of Association of your Company:
'Particulars of Allottee:
002^°°
ITNfTPSC
t,,0«
'
UNlrCp
CWNA
INTERNATIONAL UNITED PETROLEUM & CHEMICALS CO, ,LTD
Full Name of Applicant
China International United Petroleum & Chemicals CoJLTp
Registered Officer
No! 2508' Capital Mansion No. 6 Xinytian- South. Road.
Cnaoyang. District, Beijing'
Post Codec 100004 '
Business Occupation or Description:
A joint venture company of .-STKOPEC and SINOCHEM.
Business scope extends .from import of crude oil,- import and
export of "petroleum products, petrochemical produrts,
overseas oil- exploitation and. etc.
•"
Tours /faithful
.>'
Jiang .Tun
President
TJNIPEC
£18,100004
.PRC TW,
Annexure E
UNIPEC fax dated August 17th
plus translation
"38 '93
10:22
C01 4680197
TSNIPEC
0128
CHINA PETRO-CHEMICAL CORPORATION
•
«• -
$•',
0131
English Translation of fax from China Petro-Chemical Corporation to Mr.
Hwang Cfaou Shiuan dated 17.08.93
CHINA PETRO-CHEMICAL CORPORATION
To:
[Hong Kong] Parkview Group [Limited]
Attn: Mr. Hwang Chpu Shiuan
Enclosed please find a copy of brief information relating to our co-operation for
reference only.
UNIPEC
Signed: [Jiang Yun Long]
8.17
(Lfc\Hl34-01X098)
0132
China International United Petroleum & Chemicals Co., Ltd. ("UNIPEC") is a joint venture
between China Petrochemical Corporation ("SINOPEC") and China National Chemicals
Import and Export Corporation ("SINOCHEM") under the approval of the State Council. Its
scope of operation is as follows:-
import crude oil for petrochemical and oil refinery enterprises in China;
import and export [refined] oil;
deal with petrochemical products;
import and export machinery -equipments and technology;
contract in to engineering;
export labour services;
sell the above mentioned products in the domestic market;
make investments in connection with the production and trading of the petrochemicals
inside and outside China; and
carry out petroleum prospecting as entrusted by SINOPEC.
»
The establishment of UNIPEC is a new attempt of the refonn of China's foreign trading
system.
It gives full play to the advantages of SINOPEC and SINOCHEM
It can
accomplish the integration of the international and domestic markets and unify the operation
in respect of the refining, sale, export and import of oil
It can also make use of the
resources, funds, and technology inside and outside China in order to develop the
petrochemical industry in China.
(Ul\H134-0!2.09*}
- 2 -
0133
In the past six months since its establishment, UNIPEC insists that the economic efficiency
is paramount. Its business strategy is to develop the business in all aspects. It also adopts
a flexible operation and management approach. Its business of importing crude oil, importing
and exporting refined oil and petrochemicals, and acting as an impost and export agent is
going onto the right track. The annual turnover will reach US$1,500 million. The investment
and development, and trading in China are making progress. For making the most of the
integration of industry and trading, strengthening UNIPEC, and striving for opening up a path
for development, UNIPEC have established subsidiaries in Jilin, Shanghai and Shenzhen
successively. It also establishes [Dalian International Petrochemical Co., Ltd.] jointly with
[Dalian Petrochemical Co.] and [Shenyang Sales Co.] of SINOPEC. It cooperates with the
foreign investors and acquires [Wenhao Hotel] in Wangfujing, Beijing and restructures
"UNIPEC Building Company Limited". It invests in [Hainan Heping Industrial Co.] and
successfully acquires 50% of the ^interests in [Shangdong Zibo Plastics Factory] and
reorganizes the latter as [UNIPEC Zibo Plastic Products Co., Ltd.], Meanwhile, it is carrying
out discussion in respect of such profitable projects as gas stations and entrepot of oil.
UNIPEC is making encouraging progress in industrializing and diversifying its business. As
to the overseas business, UNIPEC has acquired 28% of interests in [Hong Kong Baishida
Co.]. It also assumes 50% of interests in SINOCHEM, Hong Kong.
Our acquisition of 20% share in [Hong Kong] Parkview Group [Limited] is part of our
development of business overseas.
After we had carried out a study on [Hong Kong]
Parkview Group [Limited] seriously, we believe that company has diversified business and
good results, but the share price is obviously under-valued in the market. Investing in that
company is a wise choice. At the same time, our company and that company are exploring
opportunities to cooperate in business. Co-operation between a company which mainly deals
with investment on properties and a company which mainly opferates oil business will achieve
good performance.
(Ut\Hi34-0l2.09S)
- 3 -
Annexure F
SEHK teletext announcement
dated August 17th 1993
0023
17/08/93 783
10:02
COMPANY NEWS
HK PARKVIEW - Announcement
The Stock Exchange has received an announcement from The Hong Kong
Parkview Group Limited (the "Company"} as follows:
The Board of the Company was informed by the majority shareholder
of the Company that it has arranged a placing of 89,000,000 shares
in the Company, representing approximately 20% of the issued share
capital of the Company, to China International United Petroleum &
Chemicals Company Limited at $2.85 per share. The majority
shareholder will thereafter conditionally agreed to subscribe for
the same number of new shares in the Company at the same price.
A detailed announcement will be released later today.
By Order of the Board
George Wong Kin Wah
Chairman
17th August, 1993
Annexure G
Press announcement of placement
dated August 18th 1993
WEDNESDAY. AUGUST 18.
SOUTH CHINA MORNING PQ$
Tne St»<t £.:cte«ie o{Ho«t Xi«t UmlttJ .•«<; «a rctpOHiibilffy for if,f ca»tcn<: of Mi 3*«o**ccme*t. mace: „„ ,t?,,t<><r3,;on
actvrac? ar c,*plctt«ti: and u^tiilj fsctalms ex-f labitir, okattot-^i- for an, tan Aa~»< w arltinsft*-* ar ,« rtHa^c ».„, ,°' j
or anj fart »//A< coilvut of tliis anxaunctmt*!.
THE HONG KONG PARKVIEW GROUP LIMITED
(Incorporated in Bermuda with limited liability)
PLACING OF 89,000,000" SHARES AND SUBSCRIPTION
OF 89,000,000 NEW SHARES OF HKS LOO EACH
The board of directors of Tnc Hong Kong Parkview Group Limited (the "Company") announces clarrangemems were made on 17th August, 1993 for a private placement (the "Placing") of 89,000,000 shares (!;
"Placed Shares") of KKS1.00 each in the capita! of the Company (the "Shares") with China International Um;<
Petroleum and Chemicals Company. Limited ("UNIPEC").. a joint venture company formed between Chi:
Petrochemical Corporation' (^SSS-ftZS:^) f'SINOPEC") and The China National Chemicals Import" kr
Export Corporation {4>S&X!tfi Qfi£*l) fSIKOCHEM"). UNIPEC, SINOPEC and SINOCHEM are bdependc
of the Company, the directors* chief executive and substantial shareholders of the Company or Its subsidiaries or the
respective associates. UNIPEC's business includes the import and export of crude oil and petroleum produce
petrochemical production and overseas oil exploitation. The UNIPEC joint venture company, (50 per ccnl SINOPE
and 50 per cent. SINOCHEM) was sec up recently to promote international petroleum investments. SINOPEC is
ministry-level enterprise under the direct supervision and control of the State Council of the People's Republic c
China (the "?RC"). Formed in 1983, SINOPEC is primarily responsible for the administration and development c
PRC's petrochemical industry. SINOPEC currently controls 38 refinery, enterprises producing six major groups c
petrochemical products including petroleum products, intermediate petrochemicals, resins and plastics synthetic fibres
synthetic rubber and fertilisers. The SINOCHEM group, in existance for over 40 years, has successfully built up
diversified international petroleum business with operations Including the importing and exporting of petroleum a
well as the trading of petrochemical products worldwide. Together, SINOPEC and SINOCHEM control over half c
China's Petroleum industry including all refining, marketing and trading of petroleum and petrochemical produce.
wiihin the PRC. The Shares placed to UNIPEC will be held by UNIPEC as a long term 'investment. UNIPEC does nc
presently intend to increase its holding in the Company nor to nominate representatives to the Company's board.
The Placing was made at a price of HXS2.85 per Share, representing a premium of approximately 2.0 per cent
over the average closing price of HKS2.795 per Share on The Stock Exchange of Hong Kong Limited (the "Stock
Exchange") over the five trading days ended on 16th August, 1993, and a discount of*approxtrnately 10.9 percent, tc
the closing price of HKS3.20 on 16th August. 1993. The Placed Shares represent approximately 20.0 per cent, of iha
Company's present issued share capital and are existing Shares held by Kompiss International Limited ("Kornpass")
Kompass is a company owned by Messrs^Georgc Wong Kin Wan, Victor Hwang Yiou HWI and Tony Hwang Teh Hwa
(who are directors of the Company). The Placing will be completed on 19th August, 1993.
Pursuant to a subscription agreement dated 17th August, 1993 between Kompass and the Company, it was agreed
that Kompiss will subscribe for 89,000,000 Shares (the "New Shares") at a price of HKS2.85 per Share (th«
"Subscription"). All the New Shares will be issued under the general mandate granted to the board of directors at (ru:
Special General Meeting of the Company held on 5th January, 19^3. Following the Placing, the "aggregate holding o;'
Kompass and Mr. George Wong Kin Wah will be reduced from approximately 68.1 per cenL to 48.2 per cent, of the
existing issued share capital of the Company; following the completion of the Placing and. the issue and allotment or
the New Shares pursuant to the Subscription, Kompass and Mr. George Wong Kin Wah will hold approximately 56.8
per cent- of the enlarged issued share capital of ihc Company. Accordingly, following the Placing and Subscription.
the percentage held by the public will conform with the public shareholding requirement under the Rules Governing:
the Listing of Securities on the Stock Exchange. The New Shares -will, upon issue, ran): pan passu in all respects with
the existing Issued Shares. The Company has agreed 10 reimburse Kompass for all out-of-pocket expenses, including
inter alia, brokerage, stock exchange transaction levy, special levy and stamp duly, incurred by il in respect of the
Placing and the Subscriptioa for the New Shares.
The Subscription will enable the Company to foster a closer relationship with SINOPEC and SINOCHEM with
a view of identifying opportunities for cooperation with them by the Company in the fields of making oil arid
petroleum related investments. The Subscription will also expand the Company/* capital base. The net proceeds of the
Subscription/ amounting to approximately HKS253 million, will be used to provide additional working capital to the
Company and co reduce bank borrowings.
The Subscription U conditional on (i) the Listing Committee of the Stock Exchange granting listing of and
permission to deal in the He* Shares, and (a) the Bermuda Monetary Authority approving the issue of ihc New SharesThe Placing tad the Subscription were arranged and advised by Goodwill Capital Limited.
Application-will be rrude to the Stock Exchange for luting of and permission to deal in the S9.000.000 New
Shares.
By Order of the Board
Annexure H
Inquiry by SEHK to Goodwill
dated August 19th 1993
.
THE STOCK EXCHANGE OF HONG* KONG LTD.
VF, CXS 4 TWO £X>W<i£ SQlM*e. ce^TTUL KXS
Our Ref:
LD29297/93/DY
19th August, 1993
Goodwill Capital Limited
20th Floor
Nine Queen's Road Central
•
3Y FAX
Kong Kong
Attn:
Mr. Sananv Leung
ar Sirs 7
ff
The Hong Kong Parkview Group Li-sited (the tf Company
)
1
Placing of 8 9 / 0 0 0 / 0 0 0 shares (the ''Placement ') and subscription
of 8 9 ^ 0 0 0 , 0 0 0 new shares (the ^Subscription".) of HKSl.OO each
We refer to the facsioiile message dated 17th August/ 1993 enclosing
the final proof of the announcement with your suggested aarked-up
"amendments regarding the captioned subject and vould like to
confirm our verbal- advice that we have no fiirther comments thereon.
In order to assist us to process the" listing application of the
Subscription shares, we vould be grateful if you .could advise us of
the following-additional information:1)
when did the negotiation on the Placement and the
Subscription start and what parties were involved;
2)
whether the Board of the Coapany convened any meeting to
discuss the Placenent and the Subscription. If so/ please
send us' the relevant board minutes for our records; '
3)
whether the Board of the Company considered or explored
other methods of funding instead of an equity issue;
<)
whether the Board of the Company sought independent
competent: advice on the Placement and the Subscription;
5) '
whether the Board of the Company considered that the price
of the Subscription shares, which was determined at HK$2.85
per share, was fair and reasonable;
Puca,
STOU> HX
U02S
THG
- 2 -
6}
whether the Board of the Coapany considered that the timing
of the Placement and the Subscription was in the interests
of the Company;
7)
if there are any foraal agreements or relevant documents in
relation to the Placement and the Subscription- If so,
please send us a certified copy of these agreements for our
records;
8)
the total expenses incurred under the Placement and the
Subscription; and
9)
if there will be miniiauia 25 per-cent, of the total issued
share capital of the Company.in public hands in accordance
with Rule 8.08 of the Listing Rules after the completion of
the Placement and the'Subscription,
Concurrent to the Placement and the Subscription, we received on
the same day a written notice of the Coapany!s board meeting to be
held on 27th August, 1993 to consider the^1933 final results of the
Company (the ifHoticelc). We are concerned"about the time proxikity
between the Placement and the Notice, Accordingly/ please also
address the following:~
i)
why the Placement was done at such timing;
ii)
whether the 1993 final results of the Company is one of the
factors in considering the Placement; aoid
iii) whether the placee and the vendor has any knowledge of the
1993 final results of the Company-Jhould there be *iny queriesy- please contact, either the undersigned
or our Hr. Derek- Chan.
Yours faithfully,
For The Stock Exchange of
Hong Xong limited
Keniel Wong
Assistant Director
Listing Division
KW/DC/0Y
Annexure I
Draft reply to SEHK inquiries
dated August 20th 1993
Goodwill Capital Ltd.-t :& Si * * PS. '£• €>
FACSIMILE TRANSACTION'
Date
2Qth August 1993
To
Mr Peter Sin
Hong Kong Parkview Group
Fax Ko.
8691337
From
Sammy C C Leung
No. of page(s)
(NOT INCLUDING THIS PAGE)
r.oclfv Alice'Lee *t 533986S If message received Incomplete.
We enclose a letter from the Stock Exchange containing some enquiries into the Placement and
our draft reply to the letter. Please peruse our draft reply (especially point (1)) and give us your
comments on it, if any, before we submit it to the Stock Exchange. Please also note that v/e
have to submit a certified copy of the subscription agreement to the Stock Exchange (point (7)).
Please arrange a copy to be sent to us.
Sammv C C Leuns
20/f .
i Rood Gsn*cJ, Hong
A Lr^^-/c -T t± : SXJ
: 533 ?S9S fox: 533 9SE8 T<^: 73 1 35 GWHL HX
: 533 3343 X^P : 78135 GWIHL HX
20th August 1993
The Stock Exchange of Hong Kong Limited
36/F Jardtne House
1 Connaught Place
Hong Kong
Attn: Mr Keniel Wong
Dear Sirs
Re:
The Hong Kong Parkview Group Limited (the "Company 1 ')
Placing of 89,000,000 shares (the "Placement") and subscription of 89S0003000
new shares (the "Subscription11) of HKS1.00 each in the Company
We refer to your letter dated 19th^ August 1993 and would like to provide you with the
following additional information:
(1) " The discussion on the Placement and the Subscription commenced on Friday, 13th
August 1993. A paeefcflg-was held in the morning between the Company (Mr
Hwang— €hou-Shiuan- and—Mr- Peter -Sin) -and- -Goodwill-Capital-- Limited
(MGoodwiU;!)-(Nfc^
the ^
Company had further discussions .with China International -United -Petroleum and r.Chemicals Company, Limited (the "Placee"), who finaUyjagrecdJSL taJce up the *• *
C-y-~t PIac*ng °n Monday, 16th August 1993. The Stock Exchange was promptly
* notified of the transaction before the market opened in the morning of Tuesday, »^
17th A u u s t 1993.
"*
(2) • The minutes for the board meeting of the Company held on 17th August 1993 is
enclosed for your reference.
(3)
The board of the Company considered that given the existing gearing level of the
Company and the time involved in other fund raising exercises, e.g. rights issue,
the Placement and the Subscription represented the most appropriate method of
funding.
(4)
The Placement and the Subscription were arranged and advised by Goodwill.
f
The price of HKS2.85 per share represents a premium of approximately 2.0 per '
cent, over the average closing price of HKS2.795 per share on The Stock ,
Exchange of Hong Kong Limited over the five trading days ended on 16th August
1993, and a discount of approximately 10.9 per cent, to the closing price of
HKS3.20 on 16th August 1993. The board of the Company considered that the
price of $2.85 per share was fair and reasonable and the terms are in line with
common market practice.
;
(5)
L
0030
(6j
Given the current market situation, the board of the Company considered that the
timing of the Placement and the Subscription was in the interests of the Company.
(7)
A certified copy of the subscription agreement is enclosed for your records. Nfo
formal agreement was entered into in relation to the Placement.
(8)
Expenses of approximately H K S l . l million were incurred under the Placement
and .the Subscription.
(9)
In accordance with Rule 8.08 of the Listing Rules, over 25 per cent, of the total
issued share capital will be in public hands after the completion of the Placement
and the Subscription.
In relation to the notice of the Company's board meeting to be held on 27th August J993
£0 consider the 1993 fiftal results of the Company, we address your enquiries as follows:
(i)
The Placement was finalised and announced as soon as final agreement to the
terms of the Placement were reached between Kompass International Limited (the
"Vendor") and the Place?,
(ii)
The 1993 final results of the Company has no bearing on the consideration of the
.Placement.
(iii)
The Placee did not have any knowledge of the 1993 final results of the Company.
Since the Vendor is owned by three of the directors of the Company, the Vendor
could be taken to have knowledge of the 1993 final results of the Company, but
it should be noted that the Vendor has agreed, pursuant to the Subscription, to
subscribe for the same number of shares at the same price as thac under the
Placement. Accordingly, the Placement and the Subscription did not constitute
any dealing in actual reality as far as the Vendor is concerned. % In addition, as
• already mentioned in point (ii) above, the 1993 results was not a factor in
considering the Placement.
We hope that the above information can answer all your questions regarding the
Placement and the Subscription,
Yours faithfully
For and on behalf of
GOODWILL CAPITAL LIMITED
Sammy C C Leung
Managing Director
-2-
Annexure J
Final reply in answer to SEHK inquiries
dated August 31st 1993
Goodwill Capital Ltd.
FACSTMfLE TRANSACTION
Date
25th August 1993
To
Mr Peter Sin
Hong Kong Parkview
Fax No.
8691337
From
Sanuny Leung/Charlmane Wong
No. of following pages
Please notify Alice Lee at 5339868 if message received incomplete.
For' your comments
20/F.N,viOuW»RfloJGwtaJ. Hong Kong.
T«Uj*«*«: 533 9B9S
Fc=c 533 9S88 TJ«: 73135 GWIHL HX
: 533 «US3 "^«J : 78133 CWIHL HX
003,1
GoodwHf Capital Ltd,
3isc August 1993
The Scock Exchange of Hong Kong Limited.
36/F Jardine House
. i Connaughc Place
Hong Kong
Aim: Mr Keniel Wong
Dear Sirs
The Hong Kong Parkview Group Limited (the "Company11)
Placing of 89,000,000 shares (the "Placement11) and subscription ot89,OQQ,Q00
new shares (the "Subscription") of HKS1.00 each in the Comonny
_J
We refer to your letter dated 19th August 1993 and would like to provide you with the
following additional information:
Re:
(1)
Formal discussion on the Placement and the Subscription commenced ca Friday,
13th August 1993. During the discussion, it was preliminarily agreed that the
placing price would be equivalent to the closing price on that day. Final
agreement was reached with China International United Petroleum and Chemicals
Company, Limited (the "Placee") in the evening of Monday, 16th August 1993.
The Stock Exchange was promptly notified of the transaction before the market
opened in the morning of Tuesday, 17ch August 1993.
(2)
The minutes for the board meeting of the Company held on 17th August 1993 is
enclosed for your reference.
(3)
The board of the Company considered that given the existing gearing level of the
Company and the time involved in other fund raising exercises, e.g. rights issue,
the Placement and" the Subscription represented the most appropriate method of
funding.
*»*
(4)
The Placement and the Subscription were arranged and advised by Goodwill
Capita! Limited.
(5)
. The price of HKS2.85 per share is equivalent to the closing price per share on
Friday, 13th August, 1993. It also represents a premium of approximately 2.0
per cent, over the average closing price of HKS2.795 per share on The Stack
Exchange of Hong Kong Limited over the five trading days ended on 16th August
1993, and a discount of approximately 10.9 per cent. 10 the closing price of
HK53.20 on 16th August 1993. The board of the Company considered that the
price of HKS2.85 per share was fair and reasonable and the terms are in line with
common market practice.
20/F. Nl«<. Qvctw* * Rocd Ccnlrol, Hong Kong.
— -M*
:
T-fcpKon<: 533 9S93
^ * • 533 9393
few: 533 9888
Tdcx: 73 1 35 GW1HI HX
V>& :.533 9S£J _??.&.: 70135 .
0035
(63
Given the current market situation, the board of the Company considered that the
timing of the Placement and the Subscription was in the interests of the Company.
(7)
A certified copy of the subscription agreement is enclosed for your records. No
formal agreement was entered into in relation to the Placement.
(8)
Expenses of approximately HKSi.l million were incurred under the Placement
and the Subscription.
(9)
In accordance with Rule 8.08 of the Listing Rules, over 25 per cent, of the total
issued share capital will be in public hands after the completion of the Placement
aad the Subscription.
In relation to the nodce of the Company's board meeting to be held on 27th August 1993
to consider the 1993 final results of the Company, we address your enquiries as follows:
(t)
The Placement was" finalised and announced as soon as final agreement to the
terms of the Placement were reached between Kpmpass International Limited (the
"Vendor") and the Placee.
(ii)
The 1993 final results of the Company has no bearing on the consideration of the
Placement.
(iii)
The Placee did not have any knowledge of the 1993 final results of the Company
until the results were publicly announced. Since the Vendor is owned by three
of the directors of the Company, the Vendor could be taken to have knowledge
of the 1993 final results of the Company, but it should be nosed that the Vendor
has agreed, pursuant to the Subscription, to subscribe for the same number of
shares at the same price as that under the Placement, Accordingly, the Placement
and the Subscription did not constitute any dealing in actual reality* as far as the
Vendor is concerned. In addition, as already mentioned in point (ii) above, the
1993 results was not a factor in considering the Placement.
Yours faithfully
For and on behalf of
GOODWILL CAPITAL LIMITED
l\
.Sammy C C Leung
Managing Director
A.r
Annexure K
SFC letter (13th Sept) to HKPVG and
their reply (21st Sept)
URGbNI
SECURITIES £ FUTURES COMMISSION
"""" """
"''"
'
' """
"
Our Reference: 508/EN/192
,„„-
., K
i iiii ^•vO*. CiiftQu'fjh
'" ' '
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.
;O^
I 5 Qu';*<t K Ko^d CcAJ'jC
r«l: (352) 8409222
Fa :
< i**u 5217329
13 September 1993
Hong Kong Parkview Group Limited
11/F World Wide House
19 Des Voeux Road Central
Hong Kong
BY HAND
Ann: Mr George Wong Kin Wah
Dear Sir
Announcement dated 17 August 1993
I am conducting an enquiry into dealings in the shares of Hong Kong Parkview Group
Limited ("'Parkview") prior to the announcement on 17 August 1993 that Parkview had
entered into a private placement of 89,000,000 shares at S2.85 per share to China
International United Petroleum and Chemical Company Limited, ("UNIPEC'), «
HK£3r§5 a joint venture company formed between China Petrochemical Corporation
("SINO PEC1) and the China National Chemicals Import and Export Corporation ("SINO
CHEM").
In such cases, it is the practice of the Securities and Futures Commission to
obtain information regarding the sequence of events which took place before the
announcement. Accordingly, I should be grateful if you could provide me with the
followin information:(a)
(b)
(c)
the date when your company or any of your directors, executives or other
employees first became aware of the interest of UNIPEC, SINO PEC or SINO
CHEM to acquire shares in Parkview;
*
the date when the UNIPEC first approached Parkview or vice versa in respect
of the above-mentioned placements;
the names (including full names in Chinese, if applicable), residential
addresses and telephone numbers of all the directors, executives, or other
employees (including secretaries and translators) of your company who were
involved in the discussion or in possession of information concerning
ne a otiation on the above-mentioned placement;
0037
- 2 -
(d)
the names (including full names in Chinese, if known), addresses (both Hong
Kong and PRC), and telephone numbers of all executives, employees,
representatives and advisors of UNIPEC, SINOPEC and SINO CHEM whom your
staff had met or known to have been a party to the negotiation on the
above-mentioned placement;
(e)
the names (including full names in Chinese, if known), addresses and
telephone numbers of all other persons including advisers, solicitors,
accountants, surveyors and printers employed by Parkview who were involved
in or in possession of information concerning the above-mentioned placement;
(I)
a detailed time table of events setting out the dates, time and names of
persons involved at each stage of occurrence from the moment when your
company or any of your employees first became aware of the interest of
UNIPECs interest to acquire shares in Parkview,
I thank you in anticipation for your kind assistance in this matter and would
appreciate it if I could have your reply by 17 September 1993.
If you have any queries concerning this letter, please contact Mrs. Christine
Muirhead at telephone number 842 7710.
Yonrs faithfully
For and on behalf of
the Securities and Futures Commission
Ridterd Chow
r Manager - Enforcement
ON\CMVT\31534)
TOTPL ?.19
THE HONG KONG PARKVIEW GROUP LTD.
riNi:
21 September 1993
* * * n * a *<
Securities & Futures Commission
12/F Edinburgh Tower
* .1, ii 0 * » MI
P «* * a
15 Queen's Road Central
,p^e Landmark
Hong Kong
r; ib fl: r. A £ a « ft
00;
Attn,: Mr«...Richard Chow ~ senior Manager, Enforcement
Dear Sirs,
Re
Announcement dated 17th August, 1993 relating to the
placement ("the Placement") of 89 million shares in
Hong Kong Parkview Group Limited (the"Company")
We refer to your letter dated 13th September, 1993 and we
are pleased to provide you with the information you
requested as follows:-
H«*i office
n/FWoHw*tfr«e
)!>DcfV<xuxRo3<j
CVl(nlH . nK
on.
Td;S!o>su
<*£S3:
:S105SI1
OMAtvtl«« •
VTTM uxrnao iiAMi
(a), (b) & (f) Mr- George Wong Kin Wah (Chairman and
managing director of the Company), Mr.
Hwang Chou Shiuan {father of Mr. George
Wong) and Mr* Jiang Yunlong (President of
China International United Petroleum and
Chemical
Company
Limited
"UNIPEC")
commenced discussions on 2?th April, 1993
about various possibilities of mutual
cooperation between the Company and
UNIPEC in pursuing business developments.
On Friday, 13th August, 1993, Mr. Jiang
Yunlong contacted Mr. Hwang Chou Shiuan
to indicate UNIPEC's interest in pursuing
the aforesaid matters further. A meeting
was called the same afternoon at Beijing
in which Mr* Hwang and Mr. Jiang were
present*
During the
meeting, the
possibility of having UNIPEC become a
substantial shareholder of the Company
On 14th August,
was also discussed.
1993, Mr. George Wong and Mr. Hwaag Chou
Shiuan met with Mr. K.B. Fung ati, _Wr.
CT«C
Sammy Leung of Goodwill Capital Limited
(financial advisor to the company)
("Goodwill") to discuss the mechanics of
the proposal if it were to proceed.
ftgreements regarding the detailed terms
of the Placement were reached in the
evening *of the Monday, 16th August, 1993.
The Stock Exchange was promptly notified
transaction before the market opened in
Che morning of Tuesday, 17th August, 1993
when Goodwill suggested to the Stock
Exchange a suspension in the trading of
the shares of the Company pending a
detailed announcement
regarding the
Placement. The Stock Exchange decided
that a short announcement regarding the
Placement should be made in the teletext
system and a suspension in the trading of
the shares in the Company would not be
necessary*
The detailed announcement
regarding the Placement was cleared with
the Stock Exchange on 17th August, 1993
and was published in the press on 18th
August, 1993.
(c)
Details of those directors, executives or
employees of the Company who were
involved in The discussion or in
possession of information concerning the
Placement are as follows:
Name
:
Residential
Address
Telephone :
Number
(d)
Mr. George Wong Kin Wah
Apartment 2393,
Tower 17
Hong Kong Parkview
88 Tax Tarn Reservoir Rd
Hong Kong
810 5511
Details of those directors, executives or
employees of UNIPEC, China Petrochemical
Corporation and China National Chemicals
Import and Export Corporation whom we
know to have ' been a parry to the
negotiation of or in possession of
information concerning tuo Placement are
as follows:
Name
Residential
Address
Telephone
Number
Mr* Jiang Yunlong
2508 Capital Mansion
6 Xin Yuen South Road
Chao Yang District
Beijing 100004
P,R» C*
86 1 4660866
004C
~ 3 -
(e)
Details of all other professional advisers of
the Company whom we know to have been involved
in or in possession of information concerning
the Placement are as follows:
Name
Company
Residential Address
Telephone Number
Name
Company
Residential Address
Mr- K.B. Fung
Goodwill
12A Birchwood Place
96 MacDonnel Road
Hong Kong
533 9898
Telephone Number
Mr. Sammy Leung
Goodwill
Flat 5B
17 Breamar Hill Road
Hong Kong
533 9898
Name
Company
Residential Address
Miss Charlmane Wong
Goodwill
Flat D, 14/F
Horace Court
Telephone Number:
3 Shan Kwong Road
Hong Kong
533 9898
Save for those individuals referred to above,
no other individuals in the Company were to
the best of my knowledge and belief involved
in the above mentioned discussions or in
possessions of informations concerning the
above.
Yours faithfully,
For and on behalf of
THE HONG KONG PARKVIEW GROUP LIMITED
George Wong Kin Wah
Director
Annexure L
Richards Butler letter (7th Oct)
in reply to SFC inquiries
RICHARDS BUTLER
C G How*c
R C Nicholson
A P
D M
A S
Our
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Elizabeth HjrvJy
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G F A Nuvn
Jane R«yrunj
Aiitoo Scoa
H J A Shaw
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20th F1t>or
Alexandra Hous«»
16-20 Chafer Road
Hong Kong
Si S M Yc«n|
APB/CYL/ef70ffice/APB387
Telephone 810 8008
Telex 62554 RBlAW HX
Fax 810 0664
DX-9110-rC
Your reference
7th October, 1993
Securities and Futures Commission
12/F, Edinburgh Tower
15 Queen's Road Central
The Landmark, Hong Kong
Arm.: Mr. Richard Chow - Senior Manager. Enforcement
Dear Sirs,
Placement of 89 million shares in Hong Kong Parkview Group Limited f"HKPG")
We act for Hong Kong Parkview Group Limited ("HKPG") and refer to your letters of
the 23rd and 27th September 1993. Our clients have instructed us that, in so far as they
can now reasonably recall, the information requested in your letter of 23rd September,
1993, using ihe same paragraph numbering as in your letter, is as follows:(a)
During the period 28th April, 1993 to 12th August, 1993 there were various
discussions between HKPG and China International United Petroleum and
Chemical Company Limited (UNIPEC). However, none of these discussions
concerned the placement of HKPG shares to UNIPEC. The discussions during
this period were of a general commercial nature and generally related to various
possible oil exploration and sourcing contracts in Indonesia using UNIPECs
expertise in the oil industry. To date, no specific commercial transaction has
blen entered into between HKPG and UNPEG save for th\, incorporation of a
company registered in the British Virgin Islands, Superpower Resources Ltd
("SPR")» which was established as the vehicle wV""h would be used for any joint
venture projects and which has a nominal capital hcl<fin equal shares by HKPG
and UNIPEC. All of the discussions during this period were with Mr. Jiang Yun
Long Loong ("Jiang") of UNIPEC and HKPG was represented by either Mr.
George -Wong or Mr. Hwang Chou Shiuan ("Hwang").
l Duumcf
CCM ?££
Tckj»n«vr *J-nC4t 45iS
T«tt* »€*««4 HDHW C
-2 -
(b)
and
(c)
Jiang contacted Hwang on Friday 13th August 1993 by telephone to set up a
meeting to discuss a potential oil contract in Indonesia. It was agreed that a
meeting be held in the afternoon of the same day subject to flight availability.
(d)
The meeting on the 13th August 1993 was held at China World Hotel around
6:00 p.m. Hwang and Jiang were the only persons present at the meeting. At
this meeting various matters were discussed, relating mainly to the sourcing of oil
in Indonesia and the financing SPR would require if it were enter into any such
oil contract. During che course of this meeting however it was suggested by
Jiang, for che first time, that UNIPEC might be interested in acquiring an equity
interest in HKPG. This suggestion was effectively a development of the
discussions relating to general co-operation between the two companies. Hwang
said that it may be possible for UNIPEC to acquire 20% of HKPG pursuant to the
existing general mandate at the current market price. This possible acquisition
was discussed in general terms but, apart from an understanding that UNIPEC
may be prepared to invest in HKPG, no agreement was reached. Both Hwang
and Jiang agreed to consider the matter further in more detail
(e)
Hwang took the CAI02 flight tfiat departed Hong Kong at 12:20 p.m. and arrived
in Beijing at around 3:00 p.m. Hwang returned to Hong Kong on the 14th
August 1993, via CA102 which departed Beijing at 7:50 a.m. and arrived in Hong
Kong at 11 :OQ a.m.
(f)
and
(g)
The meeting on the 14th August 1993 between Hwang, Mr. K. B. Fung and Mr.
.S. Leung both of Goodwill Capital Limited was held at Hong Kong Parkview
Group's head office in Hong Kong at 12:30 p.m. No other persons attended the
meeting.
(h)
and
(i)
During the meeting on the 14th August, the mechanics of the possible share
placement to UNIPEC were discussed. At this meeting, a proposal was
formulated to be put to UNIPEC whereby UNIPEC would acquire existing shares
representing 20% of the issued share capital of HKPG from Kompass
International Limited which company would then subscribe for additional shares
pursuant to the general mandate in accordance with the top up provisions in the
Listing Rules. On 16th August, 1993 at approximately 11:00 a.m. Jiang sent a
fax addressed to Hwang at HKPG which confirmed UNIPEC's agreement in
principle to the proposal to acquire shares representing 20% of HKPG subject to
detailed terms being put forward and agreed. Immediately after receiving
confirmation of such agreement in principle from UNIPEC, a meeting was held
at about 11:00 a.m. on 16th August 1993 at Hong Kong Parkview Group's head
office between Hwang, Mr. George Wong, Mr. Peter Sin, the General Manager
of HKPG; Mr, Brian Chan, the Financial Controller of HKPG; Mr. K. B. Fung
and Mr. S. Leung both of Goodwill Capital Limited. The purpose of the meeting
was to finalise the detailed terms of the proposed acquisition of shares by
UNIPEC. During the meeting the detailed terms to be put to UNIPEC were
formulated and agreed.
004
004
(j)
The detailed terms of the share placement were discussed and agreed with
UNIPEC on the evening of Monday 16th August 1993 during a long distance
telephone between Jiang in Beijing and Hwang in Hong Kong.
(k)
Other than Goodwill Capital Limited who acts as financial advisor to HKPG,
there were no other advisers to HKPG involved in the negotiations leading to the
placement of HKPG shares to UNIPEC,
In response to the information requested in your letter of 27th September, 1993, we are
instructed by our client that the following employees are the only employees of HKPG
and its subsidiaries who were aware of the placement of shares to UNIPEC before the
public announcement was issued on the 17th August 1993.
GEORGE WONG KIN UNIWAH
Chairman of HKPG
Residential Address:
Apartment 2393, Tower 17
Hong Kong Parkview
88 Tai Tarn Reservoir Road
Hong Kdng
Office Telephone No.:
8105511
Residential Telephone No.: 803 1803
G472833(4)
ID. Card No.:
BRIAN CHAN CHI FAI
Financial Controller of HKPG
Blocks, 6/FFlat?
Residential Address:
Site 1 Juriper Mansion
Whampoa Garden
Hunghom
Kowloon
8105511
Office Telephone No.:
Residential Telephone No.: 334 4943
£810394(5)
ID. Card No.:
PETER SIN KIT LEUNG
General Manager of HKPG
1A Hamilton Mansion
Residential Address:
1 Cleveland Street
Causeway Bay
Hong Kong
8105511
Office Telephone No.:
Residential Telephone No.: 576 8153
D295194(l)
ID. Card No.:
004
FLORENCE LAM SUI ME!
Company Secretary of HKPG
Residential Address:
10B Cheong Wan Mansion
55-59 Hill Road
Hong Kong
Office Telephone No/.
810 5511
Residential Telephone No.: 858 7741
ID. Card No.:
C461952(6)
As disclosed above, Hwang was also involved in discussions. However his involvement
derives from the fact that he is beneficially interested in shares in HKPG as he is neither
a director nor an employee of HKPG or any of its subsidiaries.
If you require any further information, please do not hesitate to contact us.
Yours faithfully,
O
Richards Bntler
Annexure
C.S. Hwang name card
0054
0«7
C. S. HWAJsfG CHAIRMAN
iUh fToex, WxtcPndc KOUK.
19 Oo Nbcux bMd. CencnJ. Kon< Kaof.
Annexure N
Trading in HKPVG shares
from June 15th 1993 to Nov 12th 1993
TRADING STATISTIC
Oat* TUa^* : J*a 93
Mia Fric« :
Max ?ric« :
NO. OF SHARES
DATE
*
D*c 93
1.990
4.800
HIGH
Daily Av*r*g« :
Av^ragw ?ric« :
2.750-
16/6/93
1.084.000
:
17/6/93
^3:.l£0.3CG shar«a
1,971,970 »ltar«s
3.130
^^^^^^^^^^mmm^ i^l-ijii :
LOW
554.000
15/5/93
0062
CLOSE
% CHANGE
HSI
2.700
2.725
0.00
7 2 33" is
2.825
2.700
2.800"
2.75
7.304 82
1.522.000
2.925.
2.725'
2.750
-1.79
7.139 1C
18/6/93
2.034,000.
3.000
2.725
2.850
3.64
7,200 75-
21/5/93*
454,000
2.825*
2.750
2.750
•3.51
7.003.58'
22/6/93
422,000-
2.800 '
2.750
2.775
0.91
7.045. 73C
23/6/93.
7.762,000 =
3.150^
2.800*
3.100'
11,71
7.C62.54C
25/6/93!
7,142.000;
3.200!
3.000 i
3.125!
0.81
7.014.0SC
28/5/93?
10.689.200?
3.675:
3.175-
3.650 S
15.80
7.148. 10C
1
?
6,882,000!
3.750;
3.325-
3.350?
-8.22
7.107.470
30/6/93 •'
3,306,000!
3.400!
3.075-
3. 125 1
-6.72
7.099.23C
:
29/6/93
j
3,194.000"
3.300'
3.125
3.250 !
2/7/93 i
1,552.000:
3.325:
"3.150-
3.175-'
-2.31
7.217.920
5/7/93;
1.112.000-
3.250?
2.375.
2.900:
-3.55
7.2C5.410
2.800
2.900
!
0.00
7.153.340
2.875
?
2.59
7.141.110
2.900.'
-2.52
7.122.390
1/7/93
6/7/93'
7/7/93!
882.000'
1.292.000:
2.950;
3.000:'
2.975
:
4.00'
7.205.330
8/7/93:'
482.000'
2.975!
2.850
9/7/93 i
522.000-
2.950:
2.750
2.775-
-4.31
7.070.510
12/7/93;
1
2.300I
2.525"
2.750!
-0.90
5.952.590
1 3/7/93 !
1.120,000;
2.775;
2.700-
!
2.750
0.00
5.956.100
1 4/7/93 [
595.000!
2.80Qi
2.700:
2.775'-
0.91
5.955.5CO
15/7/93J
308.000 =
2.775 j
2.700-
2.725i
-1.80
5.973.540
16/7/93 j
378,000:
2.725 1
2.725-
2.725!
0.00
5.925.220
1 9/7/93 i
432,000|
2.700!
2.625:
2.700J
-0.92
5.813.720
20/7/93 j
564,000!
2.725 !
2.700l
2i725:
0.93
5.845.810
21/7/93{
722,000 i'
2.725
2.575J
2.700:
-0.92:
5.839.930 1
22/7/93}
734.000j
2.725!
2.600 i
2.600 1
-3.70
5.750.020
23/7/93 1
286.000;
2.525I
2.575i
%£75\
-O.So' 5.750.330
26/7/93 !
266,000'
2.650 1
2.600";
2.650 '
2.91
5.353.030
27/7/93!
2.650
2.550:
2.625i
-0.94
5.365.970
28/7/93!
442.000$
I
384.000!
2.525
2.550;
2.500^
-0.95
5.903.210
29/7/93i
90,000!
2.500
2.550!
2.600;
0.00
5.359.930
30/7/93;
466 000 i
2.625
2.575J
2.625!
O.S6:
5.938.950
2/8/93,'
66.000'
2.625!
2.550i
2.600 !
3/8/93!
588 000 !
2.800
2.575:
2.750 !
910.000
-0.95
7.029.030
5.77 7.211.330
OOB:
TRADING STATISTIC
1
^^^im:^^^~^^j&v^^^r-
jj£J!J$i&&$&
^^s^^^^^^^^
r
0*c 93
Hia ?ric«
MJLK ?ric«
:
:
Total,
-:n: ;
1.990
4. ©00
3.130'
•;&;j*>&3&*&^^
NO. OF SHARES
DATE
HIGH
LOW
CLOSE
*t i CHANGE
HS!
4/3/93
494.000
2.750
2.550
2.575
-2.73
7 15-i 2rr
5/8/93
134.000-
2.750
2.675
2.700
0.93
7.307.54C
5/8/93
325.000
2.725
2.550
2.700
0.00
7.3S5.77C
9/8/93
220.000
2.800"
2.725
2.725
0.93
7.382.220
10/3/93
552.000-
2.725
2.650*
2.650
-2.75
7.329.510
1 1/3/93
286.000*
2.550'
2.625
2.625.
-0.94
7.357.520
456.000!
2.700-
2.600
2.550:
0.95
7.339.55G
:
1 3/8/93 '
1.578.000!
2.900-:
2.725 ii
2.850i
7.55'
7.392.250,
1 6/8/93 i
5.158.QOO'1
3.225 -:
2.900 i
3.200!
12.28
74394SOi
11 1.137.200!
3.70C-
3.400-
3.575?
11.72.
:
12/3/93
17/3/93'
1
13/3/93-
18.104,000;
3.375!
3.500i
3.825-
6.99"
13/3/93'
20.996.000i
4.375:
3.925-
4.325^'
13.07-
7.523.7So!
I
/.Dc0.37C'j
j
7.505.250)
:
0.53-
7.545.35o!
20/3/93
15.353.OOOI
4.500'
4.300^
4.350
:
12.530.400;
4.575.
4.200;
4.300-'
-1.15
7.353/20
1
23/8/93
!
24/3/93.
4.945.000:
4.350i
3.800-
4.025-
-o/O
7.327.530
25/3/93;
6.523.000:
4.150 =
3.925 '
25/3/93 '
27/8/93 f
31/S/93
1
5.147,000;2.710,000;
2.936.000!
4.050'
0.52
7.255. £BO
!
4.000-
:
4.125'
1.35
7/43.C60!
1
3.9751
4.125?
4.200
4.200.
0.00
7/22.930
!
4.1001
3.950-"
4.075 '
-1.21
7.3^3.730
:
!
1/9/93:
1.983,000:
4.050;
4.000-
4.025
-1.23
7.542.190
2/9/93:
1.518,000!
4.000!
3.875;'
4.000:
-0.52
7/93/50
3/S/93;
3.540.000.'
3.950)
3.875i
3.950;
-1.25
7.5-2.130
6/9/93 i
3.068.000 !
4.175.1
3.900J
4.150;
5.06:
7.519.550
7/9/93!
3,375,000 1
4.350 j
4.150^
4.150;
0.00.
7.545.710
8/9/93 '
•4.150*
4.050:
4.D75f
9/9/93 j
572,000!
j
1. 356.000 1
1
4.175,
4.000;
4.1 00 '
0.51 J
7.586.750
1 0/9/93 i
578,000;
4.1501
4.00o!
4,025 :
•1.83*
7.593/50
4.025.1
3.800*:
3,350!
-4.35
7/75.5/0
13/9/931
1.353.000
-1.31
:
7.507.130
3.850;
4.000J
3.90
7/73.550
580,000
4.025 !
I
4.050!
3.925!
3.950!
-1.25
7/23.770
15/9/93:
1.850000
3.950!1 '
3.775;
3.925:
-0.53 : ' r/13.110
20/9/93 \
1.024,000!
3.925J
3.775i
3.825!
-2.55
7.390.5CO
21/9/93?
540 000
3.900!
3.600:
3.875 1
1.3V
7/55.310
s
14/9/93!
2.080,000
15/9/93;
22/9/93!
3.570,000
4.025
3.825!
4.000!
3.23
7/73. SCO
23/9/93;
3 536 000
4.225 i
4.075J
4.075:
1.33
7.531.000
Page 5
006-J
TRADING STATISTIC
>::?r^^^^
••^..•::.i- *
-
StocX Cod« : 0207 -
Hi a Pric«
KJLX ?ric«
:
:
•^^^^^^^^^^^F^^^S
NO. OF SHARES
DATE
D«K: 93
1.990
4.100
481. 1€C,©00 shares
TocU.
Daily
-;£ j
1,971,970 shjLr^s
ifefit
3.130
SS^i^^sii^i^
LOW
HIGH
% CHANGE
CLOSE
HSl
24/9/93
993.000
3.975
3.900
3.975
-2.45
7.525050
27/9/93
S40.000
4.000-
3.875
3.900'
-1.39
7.452.090
1.23
7.470.500
23/9/93
738.000
3.950
3.375
3.950
29/9/93
1.176.000
4.050
3.950
3.975
0.53
7.551. 1CO
30/9/93
1.114.000-
4.025'
3.875
4.025'
1.25
7.575220
:
4.000"
3.900
3.900:
4/10/93
478.000
•3.11
7.744.320
:
1.322.000:
4.000'
3.900'
4.000
2.56
7.369.43Q
6/10/93:
342.000;
3.925-1
3.8751
3.900!
-2.50
3.041.570
7/10/931
352.000:
4.000i
3.875J
3.900,'
0.00
3.066.7SO
8/1 0/93 "
638.000!
:
3.9/5'
3.850!
3.925J
0.64
3.005.550
11/1 0/93 !
400.000!
3.900!
3.850|
3.875!
-1.27
3. 192.1 SO
192.000^
:
3.825
:
3.850|
-0.65
3.253 450
:
3.775-
3.850!
6.00
3.292.950
5/10/93
12/1 0/93 i
3.900
13/10/93:
604.000;
3.875
14/10/93 =
346.000:
3.850;
3.775
3.825!
-0.65
3.412.400
15/10/93'"
796.000:'
3.850;
3.775
3.800-!
-0.55
3.753.9S3
1
-0.55
9.031.130
18/10/93"
512.000-'
3.800;
3.725-'
3.775
19/1 0/93:
1.228.000-
3.875-
3.700 =
3.850.
1.99
3.351.410
20/1 0/93!
668. 000 !
3.900«:
3.800!
3.85o!
0.00
3.902.3CO
21/10/93;
334.000:
3.900'
3.825"
3.350^
0.00
3.332.530
22/10/93;
540.000;
3.850 1
3.725:
3.800!
-1.30
3.719.320
25/10/93 =
542.000;
3.825?
3.775;
3.800 1
0.00
3.757.500
?
26/10/93:'
1,926.000;
4.175J
3.800 -
4.150!
9.21
3J90.SCO
27/10/93?
2.150.0001
4.275 !
4.125i
4.150!
0.00
3.903.200
28/1 0/93 i
1,108,0001
4.200 i
3.975J
4.100I
-1.20
3.010.270
29/10/93;
666.000:'
4.050!
3.925 '
3.'950i
-3.56
9.329.C90
1/11/93;
1.078.000:
4.125J
3.950;
3.950 !
0.00
9.529.190
1
2/11/93;
864.000:
4.025J
3.900 !
3.950 !
0.00
9.542.910
3/11/93-
l74.000-!
3.950 !
3.350:
3/950 !
0.00-
9.352.110
4/11/93;
2.136.000;
4.200J
3.925*
4.200.
6.33
9.204.330
5/11/93!
630. 000 !
4.200!
3.875!
3.950J
-5.95*
3.9S5.S3Q
8/11/93!
612.000?
4.100;
3.900''
4.050 !
2.53
9.177.950
9/1 1/93
550.000:
4.050?
3.900?
3.925J
-3.09
9.033.470
10/11/93!
372.000!
3.950 !
3.900!
3.925{
0.00
9.325.440
11/11/93*
376.000J
3.975J
3.9501
3.975 1
1.27
9.574.330
12/11/93'
504,000-
4.100!
3.950^
4.025J
1.25
9.701.250
:
Page 5
Annexure O
C.S. Hwang's trading in HKPVG shares
through Mansion House Securities
from July 7th 1993 to Sept 16th 1993
together with the same information
as prepared by Richards Butler
i: -• - i i IDENTirY
I
TI-JS
AS
***rr* *
i»i-.ri-.Kiy.s- i n iiv .
j
Tradings iri HKPV shares thrqu&hfft
HWANG Chou Shi^an,^
j - -'-
VvV-4>;T>«J !:• •• jJx^-" ••*'••-*' <f
\\Dzi&£$^mii$$?gg *^rnce-S^£4x&£
••"""" ••
7.7.93
""
.
i ;"
I,
f/u
—.
2.900
2.925
2.950
2.975
3.000
46,000
122,000
174,000
126,000
102,000
570,000
2.850
2.900
34,000
34,000
68,000
9.7.93
2.875
30,000
30,000
12.7.93
2.650
2.675
2.700
2.725
2.750
10,000
20,000
220,000
150,000
10,000
410,000
2.700
2.725
248,000
42,000
290,000
8.7.93
13.7.93
14.7.93
2.725
2.750
- 2.775- - - - - -
14,000
60,000
-20,000- —
-,
— -94,000
19.7.93
2.700
300,000
300,000
20.7.93
2.700
2.725
330,000
10,000
340,000
21.7.93
2.700
500,000
500,000
22.7.93
2.600
2.625
2.650
2.675
2.700
32,000
4,000
198,000
48,OtfO
38,000
320,000
23.7.93
2.550 2.625
160,000
18,000
178,000
28.7.93
2.600
2.625
10,000
10,000
20,000
20,000
20,000
29.7.93
2.600
•
!•••: ,
••**;•
SWY- 9
Tradings in HKPV shares through MHSL by
HWANG Chou Shiuan
IPa't&^&s&g^&fc- ^^^:Price*Sbi4»5£{s',-.» *&$&>•;& Quantity '•:•?:£•;'.?&.>•<,•; •4=i;H^j^fe*s:^T«To'ta 1 !
2.625
2.600
2.575
10,000
66,000
130,000
206,000
2.600
20,000
20,000
2.600
2.700
2.725
2.750" '
2.775
20,000
40,000
40,000
48,000
10,000
158,000
4.8.93
2.750
30,000
30,000
5.8.93
2.750
2.700
2.725
10,000
6,000
10,000
26,000
2.675
2.700
16,000
10,000
26,000
2.860
? 7<n
z..
/./u
4,000
2.675
2.650
10,000
24,000
2.675
2.700
10,000
(10,000)'
2.725
2.750
2.825
2.900
884,000
62,000
8,000
20,000
974,000
4.350
4.300
4.350 -
396,dbO
420,000
580,000
1,396,000
4.350
4.300
300,000
700,000
1,000,000
24.8.93
3.800
4,000
4,00-3
27.8.93
4.175
(20,000)
(20,000)
30.7.93
2.8.93
.
3.8.93
)
6.8.93
9. 8.93
10.8.93
5
•
12.8.93
•13.8.93
. 20.8.93
23.8.93
-
-''
•• »--
nnn
- in
JLUjUJ'J
34,000
0
0069
SWY- -9
Tradings in HKPV shares through MHSL by
HWANG Chou Shiuan
nDatelkiai^^
3.950
3.950
4.100
50,000
(20,000)
(30,000)
0
4.125
4.150
4.175
50,000
(20,000)
(30,000)
0
10.9.93
4.150
10,000
10,000
14.9.93
4.025
3.975
3.950
4.000
10,000
40,000
(20,000)
(30,000)
0
.5.9.93
4.050
(10,000)
(10,000)
6.9.93
3.950
10,000
10,000
6.9.93
9.9.93
(IM\ROY>3-K76)
Trading of Mr, Hwang
Imdinfljnihe pame of^r ^ ^ HyWJ
ifi^LMansion House Securities (F,F ) I imitfl
fmmJiily 1993 until NPYemfw 1Q«
Trade Date
07/7/93
07/7/93
07/7/93
07/7/93
07/7/93
08/7/93
08/7/93
09/7/93
12/7/93
12/7/93
12/7/93
12/7/93
12/7/93
13/7/93
13/7/93
14/7/93
14/7/93
14/7/93
19/7/93
20/7/93
20/7/93
21/7/93
22/7/93
22/7/93
22/7/93
22/7/93
22/7/93
22/7/93
Price
2.9
2.925
2.95
2.975
3
2.85
2.9
2.875
2.65
2.675
2.7
2.725
2.75
2,7
2.725
2.725
2.75
2.775
2.7
2.7
2.725
2.7
Withdrawal
2.6
2.625
2.65
2.675
2.7
Buy/Sell
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Shares per deal Shares per day Shares total
46,000
122,000
174,000
126,000
102,000
570,000
570,000
34,000
34,000
68,000
638,000
30,000
30,000 . . 668,000
.
10,000
20,000
220,000
150,000
10,000
248,000
42,000
14,000
60,000
20,000
300,000
330,000
10,000
500,000
1,368,000
32,000
4,000
198,000
48,000
38,000
410,000
1,078,000
290,000
1,368,000
94,000
300,000
1,462,000
1,762,000
340,000
500,000
2,102,000
2,602,000
320,000
2,922,000
Page 1
CD
CD
CO
Trading of Mr. Hwang
26/7/93
27/7/93
27/7/93
27/7/93
28/7/93
28/7/93
29/7/93
30/7/93
30/7/93
30/7/93
02/8/93
03/8/93
03/8/93
03/8/93
03/8/93
03/8/93
04/8/93
05/8/93
05/8/93
05/8/93
06/8/93
06/8/93
09/8/93
09/8/93
10/8/93
10/8/93
12/8/93
12/8/93
13/8/93
13/8/93
13/8/93
13/8/93
20/8/93
20/8/93
Withdrawal
Withdrawal
2.55
2.625
2.6
2.625
2.6
2.625
2.6
2.575
2.6
2.6
2.7
2.725
2.75
2.775
2.75
2.75
2.7
2.725
2.7
2.675
2.8
2.75
2.675
2.65
2.675
2.7
2.725
2.75
2.825
2.9
4.35
4.3
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Sell
Buy
Buy
Buy
Buy
Buy
Buy
1,234,000
320,000
160,000
18.000
10,000
10,000
20,000
10,000
66,000
130,000
20.000
20.000
40,000
40,000
48,000
10,000
30,000
10.000
6,000
10,000
10,000
16,000
4,000
6,000
10,000
24,000
10,000
-10,000
884,000
62,000
8,000
20.000
396,000
420,000
178.000
3,100.000
20,000
20.000
3,120,000
3.140.000
206.000
20,000
3.346.000
3.366,000
158,000
30,000
3,524,000
3.554,000
26,000
3,580,000
"26,000
3,606,000
10.000
3,616,000
34,000
3.650,000
0
3,650,000
974,000
4,624,000
CD
CD
CO
en
Page 2
Trading of Mr. Hwang
20/8/93
23/8/93
23/8/93
24/8/93
27/8/93
06/9/93
06/9/93
06/9/93
06/9/93
06/9/93
09/9/93
09/9/93
09/9/93
10/9/93
14/9/93
14/9/93
14/9/93
14/9/93
15/9/93
16/9/93
18/11/93
4.35
4.35
4.3
3.8
4.175
Withdrawal
Withdrawal
Buy
3.95
3.95
4.1
4.125
4.15
4.175
4.15
4.025
3.975
3.95
4.0
" 4.05
3.95
4.275
Buy
Buy
Buy
Buy
Sell
Sell
Sell "
Buy
Sell
Sell
Buy
Buy
Buy
Sell
Sell' " ""
Sell '
Buy
Sell
580,000
300,000
700.000
4,000
-20,000
2,380,000
1,702,000
50,000
-20,000
-30.000
50.000
-20.000
-30,000
10,000
10,000
40,000
-20,000
-30,000
-10,000
10,000
-10,000
1,396,000
6.020,000
i. ooo.ood "
7,020,000
4,000
7,024,000
-20,000 " ,7.004,000
o
7.004,000
0
10.000
7.004,000
7,014,000
o ""7,014,000
-10,000
10,000
-10,000
7,004,000
7,014,000
7,004.000
Page3
O
O
CO
CO
Annexure P
C.S. Hwang's purchases of HKPVG shares
on August 13th 1993
Tradings of HWANG Chou S h i u a n in H K P V shares
Date : 13 August 1993
Mansion House
Time
10:29:06
10:33:06
10:37:54
10:44:53
10:44:57
10:51:04
10:53:13
10:53:19
10:53:36
10:59:05
10:59:30
,11:09:54
'11:11:13
11:14:15
11:17:16
11:17:28
11:30:56
11:35:05
11:36:12
11:37:17
11:37:22
11:37:28
11:40:06
11:44:28
11:44:32
11:44:37
11:44:46 11:44:52
11:44:57
11:47:57
11:51:31
11:55:00
12:02:50
12:05:12
12:14:19
12:14:26
12:14:33
12:14:46
12:22:37
12:23:3012:27:06
12:27:10
15:30:32
15:39:19
15:41:53 .
(c:\123\PL\1308]
.Price
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.750
2.750
2.725
2.750
2.725
2.750
2.750
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.725
2.900
2.725
2.725
" antities
10.000
10.000
10,000
10,000
50,000
10,000
18,000
20..000
30,000
30.000
10,000
10,000
50,000
10,000
10,000
30.000
2,000
10,000
10,000
22,000
6,000
22,000
16,000
18.000
22.000
20,000
22,000
28.000
22,000
20,000
2,000
94,000
18.000
4.000
14.000
50.000
26,000,
10,000
10.000
10.000
4.000
26,000
20,000
50.000
40.000
-DQ.72
Seller
0390
2722
1680
6550
6160
3680
1391
1391
3860
1392
4121
7370
6160
7260
3350
3350
8072
6691
7042
2722
2122
2122
4420
2722
2722
2722
2722
2122
2122
1310
7041
2800
6990
8127
2800
2800
2800
0120
51SO
1682
2432
2432
3250
2920
4605
00??
°
15:42:54
2.725
30.000
4<>05
15:55:55
2.825
S.OOO
3411
Total
[c:\123\PL\1308]
S2.725
S2.750
S2.825
S2.900
884,000
62,000
8.000
20,000
974/OOp'
Annexure O
Two graphs illustrating HKPVG shares movements
Changes in Closing Price of Hong Kong Parkview
vs
Hang Seng Index, Commerce & Industrial Index and All Ordinary Index
Price of HKPV
Index (Thousands)
5 6 7 8 9 12 13 14 15 16 1920 21 22 23 26 27 28 2 9 3 0 2 3
Price
HSI
4 5
6 9 10 11 12 13 16 17 18 1 9 2 0 23 24 25 26 27 31
C&l
AO
3
Hong Kong Parkview
Price & Turnover from 1 Jul 93 - 31 Aug 93
Price of HKPV
AP-5
"urnover (Millions)
4.0
3.0
0
,«*
X,
J1
'f
A
$mw
5 6 7 8
9121314151619202122232627282930 2 3 4 6 6
o1
H
9 1 0 1 1 1 2 1 3 1 6 1 7 1 8 1 9 2 0 2 3 2 4 2 5 2o^
6 2o-?
73
Jul
Price •Turnover
'^
Annexure R
Poloair Travel Limited Invoice
J
GOS'
POLOAJR TRAVEL LTD.
Rm. 1107-8. K»i T«k Comm. Bdg.. 317-321 OB Vo«ux fetd. C.. H.K.
T«t 545-6313
F«c 543-396! Ue«nc« No.: 3S0392
TO :
r
C.HYAU FjfcT JNVSSTM&V7
LTD
INVOICE
ATTN. : DAISY
rrsM
TICKET
X/0 11014
DESCRIPTION
INV. NO.:
REF. NO.:
CCCOC05-19
OATS
:
PAGE NO.:
03/13/33
AMOUNT
f« HWANG CHOU SHIUAN.MRS CHEN SHIU PE
HONG KaNG/3£IJING CA108 13AUG
HKD3390.00X2PAX
(ECONCHY CLASS)
5.7SO.C
E&O. E.
Account Du« On Presentation
An Official Receipt will be
issued upon Receipt of Payment.
NETAMT.
PAYMENT TO BE MADE BY CROSSED CHEQUE
IN FAVOUR Or POLOAIR TRAVEL LTD.
5,7SO.G(
for and on b«hxf cf
POLOAIR TRAVEL
Please settle payment
6h or before
Annexure S
Extract from Ming Ren Holdings Limited "Very Substantial
Acquisition and Connected Transaction Document"
dated December 14th 1992
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt about this document, you should consult your stockbroker or other registered
dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.
If you have sold all your shares in Ming Ren Holdings Company Limited, you should at once hand
this document and the accompanying forms of proxy to the purchaser or to the bank or stockbroker
or other agent through whom the sale was effected for transmission to the purchaser.
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this document,
makes no representation as to its accuracy or completeness and expressly disclaims any liability
whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the
contents of this document.
MING REN HOLDINGS COMPANY LIMITED
(Incorporated In Bermuda with limited liability)
VERY SUBSTANTIAL ACQUISITION
AND CONNECTED TRANSACTIONS
INVOLVING THE*ACQUISITION OF THE ENTIRE
ISSUED SHARE CAPITAL OF PARKVIEW HOLDINGS LIMITED
AND
CHANGE OF COMPANY NAME
Sponsor and financial adviser to Ming Ren Holdings Company Limited
Worldsec
Corporate Finance Limited
Financial Adviser to
the Independent Board Committee and
the independent Shareholders
Morgan Grenfell Asia (Hong Kong) Limited
A notice convening a special general meeting of Ming Ren Holdings Company Limited to be held at
the Club House, Hong Kong Parkview, 88 Tai Tarn Reservoir Road, Hong Kong on Tuesday, 5th
January, 1993 at 10:00 a.m. is set out on pages 61 to 64 of this document.
A notice convening a special general meeting of Ming Ren Holdings Company Limited to be held at
11th Floor, World-Wide House, 19 Des Voeux Road, Central, Hong Kong on 23rd December, 1992
which was published-in the South China Morning Post and Hong Kong Economic Journal on 1st
December, 1992 is set out on page 65 of this document. This meeting will be adjourned to 5th
January, 1993 at 10:15 a.m. (or so soon thereafter as the special general meeting convened for
10:00 on that date shall have been concluded or adjourned) and will also be held at the Club House,
Hong Kong Parkview, 88 Tai Tarn Reservoir Road, Hong Kong.
Whether or not you are able to attend the meetings, you are requested to complete and return the
accompanying forms of proxy to the principal office of Ming Ren Holdings Company Limited in Hong
Kong at 11th Floor, World-Wide House, 19 Des Voeux Road, Central, Hong Kong as soon as
possible and in any event not less than 48 hours before the time appointed for the holding of the
relevant meeting.
14th December, 1992
LETTER FROM THE CHAIRMAN
MING REN HOLDINGS COMPANY LIMITED
(Incorporated in Bermuda with limited liability)
Directors:
Principal Office in Hong Kong:
George Wong Kin Wah (Chairman & Managing Director)
Victor Hwang Yiou Hwa
Tony Hwang Teh Hwa
William Michael Catley
Robert Simon Fraser
Chan Choy Yin
nth Floor
World-Wide House
19 Des Voeux Road
Central
Hong Kong
14th December, 1992
To the shareholders and, for information only,
the warranthofders
Dear Sir or Madam,
VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTIONS
INVOLVING THE ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL
OF PARKVIEW HOLDINGS LIMITED
AND
CHANGE OF COMPANY NAME
INTRODUCTION
It was announced on 27th October, 1992 that the Company had entered into the Acquisition
Agreement pursuant to which the Company had conditionally agreed to acquire from the Hwang
Family the entire issued share capital of Parkview Holdings and from Tri-View all sums due under
the Loan Stock. The aggregate consideration for Parkview Holdings and the Loan Stock is
$1,247,079,067, subject to adjustment by reference to the consolidated net asset value of Parkview
Holdings as at 30th September, 1992 (based on an agreed value for the Property and exclusive of
the liability under the Loan Stock). This consideration will be satisfied, on completion, as to $842,671,293
by the issue of the 295,674,138 new Consideration Shares to Kompass, a company owned by the
Hwang Family, credited as fully paid at a price of $2.85 per Consideration Share (being the average
of the closing prices of Ming Ren Shares on the Stock Exchange on each of the ten days on which
the Shares were traded prior to the announcement on 27th October, 1992), as to $4,407,774 by the
adoption by the Company of the Tri-View Indebtedness and as to 'the balance by the payment of
approximately $400,000,000 in cash, subject to adjustment in the event that the net asset value is
less than the agreed consideration.
._Qn 27th October; 1992 it was also announced that subject, inter alia, to completion of the
Acquisition:
—
the Hwang Family, through Kompass, would sell 90 million Shares at a price of $2.85 per
Share by way of a private placement to independent third parties arranged by Amida
Capital Limited;
- —
the Hwang Family, through Kompass, would offer to sell up to 138 million Offer Shares at
a price of $2.85 per Offer Share by way of open offer to the Independent Shareholders;
and
LETTER FROM THE CHAIRMAN
—
the Hwang Family, through Kompass, would subscribe for new Subscription Shares on
the basis of one Subscription Share for every Offer Share taken up under the Offer at the
same price, net of expenses, as the Hwang Family receives for Offer Shares pursuant to
the Offer.
The Acquisition was conditional on the Scheme becoming effective. On 24th November, 1992
following the approval of the Supreme Court of Hong Kong the Scheme became effective with the
result that Ming Ren is now a wholly-owned subsidiary of the Company which is now the listed
holding company of the Group.
As mentioned above, the vendors of the shares in Parkview Holdings are the Hwang Family. I
am the chairman and a shareholder of the Company and my father, Hwang Chou Shiuan is a
substantial shareholder of the Company. Accordingly, the Acquisition constitutes a connected transaction
under the Listing Rules. In addition, the Acquisition constitutes a very substantial acquisition for the
Company under the Listing Rules. In view of the interests of myself and my family in the Proposals,
an Independent Board Committee comprising Messrs. Chan Choy Yin, Robert Simon Fraser and
William Michael Catley, being the only directors of the Company who are not interested in the
Proposals, has been appointed to consider the terms of the Proposals. In addition, Morgan Grenfell
has been appointed as financial adviser to the Independent Board Committee and the Independent
Shareholders with regard to the Proposals.
Immediately following completion of the Proposals, the Hwang Family, through Kompass, and
Hwang Chou Shiuan will together be the largest shareholder of the Company, Details of these
shareholdings are set out in the paragraph headed The Hwang Family Shareholding" below.
The purpose of this document is to provide you with further details of the Proposals, to set out
the recommendation of the Independent Board Committee with regard to the Proposals and to give
you notice of the special general meeting convened for 5th January, 1993 at which the necessary
resolutions will be proposed for the purpose of considering and, rf thought fit, approving the Proposals,
and to give you information about the proposed change of name of the Company.
THE ACQUISITION
Pursuant to the Acquisition Agreement, the Company has agreed to acquire from the Hwang
Family the entire issued share capital of Parkview Holdings and from Tri View all sums due under
the Loan Stock, for an aggregate consideration of $1,247,079,067, subject to adjustment, of which:
—
$842,671,293 shall be satisfied on completion of the Acquisition by the issue of the
Consideration Shares which shall be issued and allotted to Kompass;
—
S4.407.774 shall be satisfied by the adoption by Ming* Ren of the Tri-View Indebtedness;
and
—
the balance of approximately $400.000,000 shall be paid in cash to Tri-View. The Company
has arranged a secured bank loan facility for this amount.
.„
The main assets of Parkview Holdings and the values attributed to such assets for the purposes
of calculating the consideration are as follows:
—
the Property, valued at an aggregate of $ 1,242.2 million based on an agreed price of
$3,800 per sq.ft., representing a discount of approximately 15.6 per cent, to the value of
$4.500 per sq.ft. as previously estimated by the Directors and a discount of approximately
18.3 per cent, to the market value as at 11th November, 1992 of $1,520 million based on
$4,650 per sq.ft. as appraised by A A Property Services Limited, an independent professional
valuer;
_2 —
LETTER FROM THE CHAIRMAN
—
Parkview international Management, valued at a nominal value of $2,00 (being the aggregate
par value of its issued share capital);
—
Parkview Estates Management, valued at a nominal value of $750 (being the aggregate
par value of its issued share capital); and
—
Gallaria, valued at its estimated net asset value of $4.8 million as at 30th September
1992.
Prior to completion of the Acquisition, the auditors of the Company will review the management
accounts of the Parkview Group as at 30th September, 1992 and, based on such review, certify the
consolidated net asset value of the Parkview Group as at such date. For the purposes of calculating
such net asset value the Property will be valued at the agreed value and no account shall be taken
of the amounts due in respect of the Loan Stock. In the event that such net asset value, as certified
by the auditors, is less than $1,247,079,067, the aggregate amount of the consideration payable
pursuant to the Acquisition Agreement shall be reduced by the amount of such shortfall and the
cash payment to be made on completion shall be reduced accordingly.
The Property and Hong Kong Parkview
The Property comprises three 20-storey residential towers with an aggregate gross floor area
of approximately 326,888 sq. ft. and provides 120 unfurnished residential apartments, 116 of which
are currently let to tenants at an aggregate gross monthly rental of approximately $5.8 million
exclusive of rates. The remaining 4 units are presently vacant. The Property forms part of the Hong
Kong Parkview development which was completed in 1989 and comprises 18 residential towers
providing 560 unfurnished residential apartments and 420 fully furnished apartments together with a
club house, supermarket and kindergarten built around a 430,000 sq. ft. landscaped podium.
Parkview International Management .
Parkview International Management presently provides letting and management services to
some owners of apartments at Hong Kong Parkview and is responsible for the management of the
furnished apartments which are currently operated as serviced apartments and will, on completion of
the Acquisition, be appointed as manager of the Property and of those parts of Hong Kong Parkview,
including the club house and its facilities, which have been retained by the Hwang Family;
Parkview Estates Management
Parkview Estates Management provides estate management services to Hong Kong Parkview
under the deed of mutual covenant relating to the whole development.
*
4
Gallaria
Gallaria is principally engaged in the trading of furniture and the provision of interior design
services and in September 1992 was appointed as the exclusive dealer in South East .Asia -for
furniture products made by Masco Corporation, one of the largest furniture manufacturing and trading
companies in the United States of America with a total turnover of approximately US$3.1 billion in
1991.
Gallaria will open a furniture showroom in Wong Chuk Hang in Aberdeen, Hong Kong in April
1993 and plans to open similar showrooms in Singapore in the second half of 1993.
LETTER
THE
The Loan Stock
The Loan Stock represents inter-group indebtedness arising out of the previous acquisition of
the Property by Hertford, Keiford and Poplin from Tri-view. The Loan Stock was issued by Hertford,
Kelford and Poplin in the amounts of $532,200,000, $500,500,000 and $536,400,000 respectively,
on the same terms and conditions in each case. Pursuant to the terms of the Loan Stock, the
principal amount due is payable on 31st December, 2010, subject to a right of prepayment on and at
any time after 31st December, 1994 on 30 days' prior notice in writing. Interest is payable every six
months at a rate equal to the rate quoted by The Hongkong and Shanghai Banking Corporation
Limited as being the rate at which Hong Kong dollar deposits are offered for six months. The first
payment of interest is due on 31st December, 1992.
Conditions
The Acquisition is conditional, inter alia, upon the following occurring on or before 31st January,
" 1993:
—
the passing by the Independent Shareholders at a special general meeting of the ordinary
resolution numbered (1) .described below under "Special General Meeting";
—
the Bermuda Monetary Authority granting permission for the issue of the Consideration
Shares; and
—
the Listing Committee of the Stock Exchange granting listing of and permission to deal in
the Consideration Shares.
tf such conditions are not fulfilled on or before 31st January, 1993, the Acquisition Agreement
will lapse.
Immediately after completion of the Acquisition but prior to the Offer and Subscription the
Hwang Family will hold 75.3 per cent of the issued share capital of the Company. On completion of
the Acquisition the Hwang Family will own 8 towers of Hong Kong Parkview together with the club
house, supermarket and kindergarten. In order to avoid any conflict of interest between their existing
private businesses and the business of the Group with respect to the Property, the Hwang Family
has undertaken to Ming Ren that all properties within the Hong Kong Parkview development will be
treated on a fair and equal basis In all respects and that they will not seek to give any preference to
privately-held properties.
THE PLACING
The Hwang Family had proposed to effect a vendor placing by Kompass of 90 million Shares
to independent third parties at $2.85 per Share pursuant to a placing agreement dated 27th October,
1992 between the Hwang Family, Kompass and Amida Capital Limited, However, in view of current
market conditions Amida Capital Limited and the Hwang Family have agreed that it would be
inappropriate to proceed with such vendor placing and, accordingly, on 7th December, 1992 such
placing agreement was terminated in accordance with the force majeure provisions contained therein.
THE OFFER
In order to enable the Independent Shareholders to participate in the proposed capital expansion
of the Company and to reduce the dilutionary effect of the issue of the Consideration Shares on • •
completion of the Acquisition, the Hwang Family has agreed to procure that Kompass shall make the
Offer.
— 4—
TO •J
HK 345.20268 H7 R93 h
Hong Kong. Insider Dealing
Tribunal *
Report of the Insider Dealing
Tribunal of Hong Kong on
whether insider dealing took
place in relation to the
Date Due