The SFC has secured a landmark court decision ordering former executives of Combest Holdings to pay $192 million in compensation to public shareholders. Mr Ng, Mr Liu, and Mr Lee were also disqualified from serving as directors.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On June 02, 2025, the Securities and Futures Commission ("SFC") obtained orders in the Court of First Instance for a record compensation in the form of special dividends to public shareholders of Combest Holdings Limited (Combest) and to disqualify three individuals, namely Mr Ng Kwok Fai, Mr Liu Tin Lap, and Mr Lee Man To, for their misconducts.
The court order, secured through a pioneering settlement, required the trio to pay approximately $192 million to an administrator jointly appointed by the SFC and Combest. The funds will be redistributed as special dividends to Combest’s independent public shareholders.
Additionally, Ng was disqualified from directing or managing any corporation for 12 years, while Liu and Lee faced an eight-year ban. The individuals were also ordered to cover the SFC's costs in the proceedings.
Ms Julia Leung, the Chief Executive Officer of the SFC, emphasized the court's decision as a demonstration of the SFC’s ability to hold de facto controllers of listed companies accountable for their misconduct, ensuring appropriate consequences for their wrongdoings.
The investigation conducted by the SFC revealed that Liu and Lee, under Ng’s directives, operated and managed Combest’s affairs. Together, they facilitated the overvaluation of two subsidiary groups by $229 million in 2016 and 2017 and arranged fictitious loan interests and fees totaling $64 million to entities related to Ng.
The court found the misconducts perpetrated by Ng to be among the most serious, warranting a disqualification period falling within the upper range of the middle bracket. Liu and Lee’s involvement in these actions also led to their disqualification for an extended period.
Bruno Arboit of Kroll ("HK") Limited will implement the compensation scheme and oversee the distribution of special dividends to Combest’s independent public shareholders from the funds deposited in the administrator’s bank account.
Two shareholders, holding 24.4% of Combest, have agreed to relinquish their share of the special dividends, resulting in a 32.3% increase for independent public shareholders. These shareholders are entitled to receive $0.066 per share, which is 2.75 times higher than the last closing price of Combest’s shares before their suspension on 29 May 2019.
The judgment is accessible on the Judiciary's website under Case No.: HCCW 118/2020.
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