Timothy Loh LLP Represents AcrossAsia in Landmark Case which Highlights Difficulties Faced by Directors of Hong Kong Listed Companies Disclosing Price Sensitive Information
For Immediate Release. November 29, 2016.
November 29, 2016. HONG KONG – TIMOTHY LOH LLP announces that it has, on behalf of its client, Mr. Albert Saychuan Cheok ("Mr. Cheok”), settled the first proceedings initiated by the Securities and Futures Commission (“SFC”) before the Market Misconduct Tribunal (“MMT”) under the new statutory obligation for listed companies to disclose price sensitive information. Under this statutory obligation, directors of a listed company bear personal liability if the company fails to disclose such information “as soon as reasonably practicable” after it comes to its knowledge and such failure arises from the failure of the directors to take all reasonable measures to prevent such a failure.
In the proceedings, the SFC alleged that AcrossAsia Limited ("AcrossAsia”) and Mr. Cheok, the non-executive Chairman of AcrossAsia, and Mr. Vicente Binalhay Ang ("Mr. Ang”), the chief executive officer of AcrossAsia, ought to have made immediate disclosure of proceedings brought against AcrossAsia in Indonesia. As part of the settlement, Mr. Cheok admitted liability and paid a fine of HK$800,000.
The case has broad ramifications for listed companies and their directors because the MMT determined that the requirement to disclose price sensitive information “as soon as reasonably practicable” does not require immediate disclosure. Listed companies and their directors may, for example, take legal advice to understand the nature of the information potentially subject to disclosure.
The case highlighted the difficulties faced by directors of a listed company and the SFC itself in defending and bringing proceedings where directors are unable to rely upon legal advice taken by the company as to its disclosure obligations if the company asserts privilege over such advice.
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1. The statutory obligation for listed companies to disclose price sensitive information is set out in the Securities and Futures Ordinance (“SFO”), s. 307B and the obligation of the directors to take all reasonable measures to ensure that a company discharges this obligation is set out in the SFO, s. 307G.
2. AcrossAsia was a company listed on the Growth Enterprise Market of Hong Kong under stock code: 8061.