SFC publicly criticises Southwest Securities International Investment Limited, Li Zhi Tao and Dong Jiang Wen for breach of the Takeovers Code

14 Dec 2016

The Securities and Futures Commission (SFC) today publicly criticised Southwest Securities International Investment Limited (SSI Investment), Li Zhi Tao and Dong Jiang Wen (Note 1) for acquiring shares in Southwest Securities International Securities Limited (SSI Securities) within six months after the close of an offer at above the offer price in breach of Rule 31.3 of the Takeovers Code (Note 2).

On 6 January 2015, SSI Investment made an unconditional mandatory general offer in cash for the shares of SSI Securities at a price of $0.58 per share (Note 3), and the offer closed on 27 January 2015. On 9 and 10 July 2015, SSI Investment made a series of on-market acquisitions of a total of 10,466,000 shares of SSI Securities at prices ranging from $0.59 to $1.01.

SSI Investment, Li and Dong submitted that the breaches were not intentional but they accepted that they breached Rule 31.3 and agreed to the current disciplinary action taken against them. 

A copy of the Executive Statement and the relevant Takeovers Code provisions can be found in the "Listings and takeovers – Takeovers and Mergers - Executive decisions and statements" section of the SFC website.



  1. SSI Investment is wholly-owned by Southwest Securities Company Limited, a Shanghai-listed company which is ultimately controlled by the Chongqing State-owned Assets Supervision and Administration Commission. Li and Dong were both employed by Southwest Securities Company Limited at the relevant time.
  2. Rule 31.3 of the Takeovers Code prohibits an offeror and its concert parties from buying shares at prices higher than the offer price within six months after the end of the offer period except with the consent of the Takeovers Executive (ie, the Executive Director of the SFC’s Corporate Finance Division or his delegate).
  3. SSI Securities, formerly known as Tanrich Financial Holdings Limited, is currently listed on the Main Board of The Stock Exchange of Hong Kong Limited.

Page last updated : 14 Dec 2016