SFC commences legal proceedings against former executives of China Automotive for alleged misappropriation of $14.6 million in 2019-2020.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On April 29, 2026, the Securities and Futures Commission ("SFC") has commenced legal proceedings in the Court of First Instance against Mr Wong Ho Yin, a former director of China Automotive Interior Decoration Holdings Limited (China Automotive) and its subsidiary Giant Faith Holdings Limited (Giant Faith), and Ms So Lung Ying, the former general manager of Giant Faith, for alleged breaches of fiduciary duties involving purported fictitious transactions and wrongful payments.
# Alleged Misappropriation of Corporate Funds
The SFC alleges that, between December 2019 and January 2020, Wong signed cheques for three payments totaling $14.6 million that were recorded as payments to a Mainland company for purchasing food products. However, these payments amount to misappropriation of corporate funds as the monies were not used to settle genuine purchases and trade payables.
# Relief Sought and Statutory Authority
The SFC is seeking disqualification orders against Wong and So, and a compensation order against Wong for $14.6 million, being the loss and damage that China Automotive allegedly incurred from the purported wrongful payments made by Giant Faith. The legal proceedings were commenced under section 214 of the Securities and Futures Ordinance, under which the court may, among other things, make orders to disqualify a person from being a director or being involved, directly or indirectly, in the management of any corporation for up to 15 years. The court may also order a person to pay compensation.
# Corporate Background
China Automotive is listed on the Main Board of The Stock Exchange of Hong Kong Limited (stock code: 00048). At the material times, it was an investment holding company which together with its subsidiaries (Group) principally engaged in the manufacture and sale of nonwoven fabric related products used in automotive interior decoration parts and other parts, and the trading of rubber and food products. At the material times, Giant Faith was an indirectly wholly owned subsidiary of China Automotive and one of the Group’s two operating arms for trading food products.
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