SFC seeks court orders against founder and former chairman of First Natural Foods

24 Apr 2013



The Securities and Futures Commission (SFC) has commenced legal proceedings in the Court of First Instance against Mr Yeung Chung Lung, founder and former chairman of First Natural Foods Holdings Limited (First Natural Foods) over alleged embezzlement of $84 million of corporate assets and false accounting (Notes 1 & 2).

The SFC is seeking disqualification orders against Yeung as well as the company’s former chief executive officer and executive director, Mr Yang Le, and another former executive director, Mr Ni Chao Peng. Yang is the son of Yeung and Ni is the son-in-law of Yeung (Note 3).

The SFC alleges that Yeung, Yang and Ni had conducted the business or affairs of First Natural Foods in a manner oppressive to its members, involving defalcation, misfeasance or misconduct towards them, resulting in their not having been given all the information they might reasonably expect and/or in a manner unfairly prejudicial to its members and in breach of their duties owed to the company. Specifically, the SFC alleges that:

The SFC is also seeking orders that Yeung repay $84 million to the company.

End

Notes:

  1. First Natural Foods was listed on the Main Board of the Stock Exchange of Hong Kong Limited on 11 February 2002. The group principally engaged in the manufacturing, processing, selling and trading of food products including frozen and functional food products. Trading of the shares of First Natural Foods was suspended from 15 December 2008 to 5 September 2012. Provisional liquidators were appointed on 7 January 2009 and their duties were discharged on 4 September 2012 upon completion of the restructuring.
  2. Under section 214 of the Securities and Futures Ordinance, the court may, inter alia, 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, if the person is found to be wholly or partly responsible for the company’s affairs having been conducted in a manner involving defalcation, fraud, misfeasance or other misconduct towards it or its members.
  3. The first hearing of the petition was heard in the Court of First Instance today.
  4. In view of the loss of control of Longyu, it had been deconsolidated from the company since 1 July 2008.
  5. A summary of the material events and the allegations is available on the SFC website.


Page last updated : 24 Apr 2013