Another Landmark Case for Timothy Loh LLP as Firm Represents Activist Short Seller Andrew Left for Appeal

For Immediate Release. January 15, 2019.

January 15, 2019. HONG KONG – Timothy Loh LLP will continue to represent activist short seller Andrew Left following his exercising of his right to appeal against the determinations of the Market Misconduct Tribunal ("MMT") in 2016, on grounds of law. The appeal (CAV 228/2016) will be heard on January 30 and 31, 2019.

The case marks the first legal action of the Securities and Futures Commission ("SFC") against an activist short seller with ramifications of free speech and is yet another landmark case which the firm has handled on top of the Pacific Sun case and the AcrossAsia case.

Commenting on the appeal, Managing Partner Timothy Loh, stated, "This is the third landmark case we have represented clients against the SFC. Our take-away from these cases is that there would be merit in the SFC offering more guidance in the regulatory standards applicable issues in advance, rather than relying on enforcement action to guide the market."

Appendix: Andrew Left Case Summary


On June 21, 2012, Andrew Left posted an analytical report on Citron Research, an online stock commentary website led by him, expressing his opinion that Evergrande Real Estate Group Ltd (Stock Code: 3333), a PRC property sector company listed on the Hong Kong Stock Exchange, was insolvent and had consistently presented fraudulent information to the investing public.

Evergrande disagreed with the contents of the report, which detailed the evidence and analysis Mr. Left relied upon in researching his opinion. Evergrande then disagreed with Mr Left’s opinion and issued announcements to rebut the report, and a number of leading investment houses questioned Mr. Left’s analysis.

The Securities and Futures Commission v Andrew Left

In December 2014, the SFC commenced proceedings against Mr. Left before the MMT. The SFC alleged that Mr. Left, through his Report, had disseminated false or misleading information to the market contrary to s. 277 of the Securities and Futures Ordinance in that Evergrande was not insolvent and had not consistently presented fraudulent information.

In August 2016, the MMT found Mr. Left culpable of market misconduct in that (i) his allegations in respect of Evergrande were false or misleading, and (ii) he was reckless or negligent in making those allegations. However, there was no finding by the MMT that Evergrande was in fact solvent or that it had not in fact engaged in fraud. In reaching its determinations, the MMT simply took the view that Mr. Left’s analysis was unsound as it displayed an ignorance of the Hong Kong accountancy standards and prevailing accounting practices used by PRC property developers.

Arguments Put Forward During Market Misconduct Tribunal Proceedings

During the MMT proceedings, it was argued on behalf of Mr. Left that by reason of him being merely a market commentator, a role which any member of the public could take up without having to be licensed, Mr. Left should not be held to the standard of an expert familiar with Hong Kong accounting rules or accounting practices used by the PRC property industry when expressing his opinion. However, the MMT disagreed and took the view that as Mr. Left held himself out to be an established market commentator, he was not entitled to express his opinion unless he had expertise in applicable accountancy regulations and standards (or had taken steps to secure expert advice in this regard) and had approached Evergrande for confirmation of this opinion.


In November 2016, Mr. Left unsuccessfully applied to the Court of Appeal for leave to appeal the determinations of the MMT on certain questions of facts. The dismissal of this leave application did not affect his right to appeal the determinations on questions of law, which Mr. Left has chosen to pursue. His appeal (CACV 228/2016) will be heard on January 30 and 31, 2019.

Comments from Managing Partner

Because companies have a monopoly on the dissemination of information about themselves, any judicial decision which restricts market participants from expressing their opinions freely as to the quality and meaning of such information impairs the ability of the market to regulate company disclosures. Mr. Left’s appeal seeks to reverse the MMT’s decision on the basis that it imposes such a restriction and thus, impairs the market’s ability to function as it should.