SFC seeks compensation and disqualification orders against former and current directors of Freeman FinTech Corporation Limited

7 Oct 2016

The Securities and Futures Commission (SFC) has commenced legal proceedings in the Court of First Instance to seek disqualification orders against 10 former and current directors of Freeman FinTech Corporation Limited (Freeman), including managing director, Mr Quincy Hui Kwong Hei, and former non-executive director, Mr Andrew Liu, for breaching their director duties in Freeman’s acquisition and disposal of a stake in Liu’s Holdings Limited (Liu’s Holdings) (Notes 1 to 5).

The SFC also alleges that, as a consequence, Hui and Liu caused Freeman to suffer loss and damage.  The SFC is seeking a court order that Hui and Liu pay $76,812,543.58 as compensation to Freeman.

The other eight former and current Freeman directors involved in the legal proceedings are: Mr Lo Kan Sun, Ms Sue Au Shuk Yee, Mr Philip Suen Yick Lun, Mr Scott Allen Phillips, Mr Agustin V Que, Mr Roger Thomas Best, Mr Gary Drew Douglas, and Mr Peter Temple Whitelam. 

The SFC’s action follows its investigation into the acquisition in January 2011 (Acquisition) and subsequent disposal in July 2011 (Disposal) of a 24.43% interest in Liu’s Holdings by Ambition Union Limited (Ambition), a subsidiary of Freeman, which caused a loss of $76,812,543.58 to Freeman/Ambition.

The SFC alleges that Liu and Hui caused Freeman to indirectly buy a stake in Liu’s Holdings in disregard of the ability of other Liu family members to object to the purchase.  The other Liu family members did object and Freeman could not complete the acquisition and sold the interest back at a loss.

Specifically, the SFC alleges that the 10 directors have:

  • failed to act in good faith and in the best interests of Freeman including a duty to disclose relevant material information to Freeman and its shareholders;
  • allowed or caused false or misleading statements in Freeman’s announcements and circulars relating to the Acquisition and Disposal;
  • failed to exercise reasonable care, skill and diligence in procuring or allowing Ambition to enter into the Acquisition and/or the Disposal; and
  • failed to take steps to pursue  Liu and/or others for the loss suffered by Ambition/Freeman.

Furthermore, Liu failed to disclose to Freeman and its shareholders that the Acquisition was opposed by some shareholders of Liu’s Holdings and the Disposal was motivated by self-interest and/or the interest of his parents, rather than the interest of Freeman.

Hui was responsible for discussing and liaising with Liu for the Acquisition and Disposal. He failed to make full and proper inquiries with Liu as to the stance of the other shareholders of Liu’s Holdings before procuring Freeman’s shareholders to approve the Acquisition.

The first hearing of the petition filed by the SFC under section 214 of the Securities and Future Ordinance (SFO) will be heard in the Court of First Instance on 24 February 2017.



  1. At the relevant time, Freeman was named Freeman Financial Corporation Limited.
  2. Freeman is listed on the Main Board of the Stock Exchange of Hong Kong Limited.  It engages in various financial related businesses, including securities and insurance brokerage and financial planning.
  3. The legal proceedings were commenced under section 214 of the SFO, 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.
  4. Liu was Freeman’s non-executive director from 30 November 2010 to 15 January 2015.  He is the eldest son of the sellers of the stake in Liu’s Holdings.
  5. During the relevant time, Liu’s Holdings held an interest in Liu Chong Hing Investment Limited and the latter held a stake in Chong Hing Bank Limited.

Page last updated : 7 Oct 2016