SFC publicly censures China Life Insurance (Overseas) Company Limited for breaches of Takeovers Code

3 Aug 2017

The Securities and Futures Commission (SFC) has publicly censured China Life Insurance (Overseas) Company Limited (China Life) as a result of its failure to disclose its dealings in the shares of Glorious Property Holdings Limited (Glorious Property) in contravention of the Code on Takeovers and Mergers (Takeovers Code).

Between 9 May and 5 August 2016, China Life executed 2,139 trades in Glorious Property’s shares during an offer period (Note 1) and failed to make public disclosures of these dealings as required by Rule 22 of the Takeovers Code (Note 2). During this time, China Life held more than 5% of Glorious Property’s issued shares and was therefore an associate of the company (Note 3).

China Life accepts that it failed to comply with the Takeovers Code and consented to the disciplinary action taken against it. It is implementing a number of remedial measures to ensure future compliance with the Takeovers Code.

The SFC wishes to take this opportunity to remind practitioners and parties who wish to take advantage of the securities markets in Hong Kong that they should conduct themselves in matters relating to takeovers and mergers in accordance with the Takeovers Code. In particular, associates must report their dealings in the offeree company (or offeror company in the case of a securities exchange offer) during an offer period in accordance with Rule 22 of the Takeovers Code.

A copy of the Executive Statement can be found in the “Takeovers and Mergers – Decisions & statements – Executive decisions and statements” section of the SFC website.



  1. An offer period commenced for Glorious Property on 4 March 2015 when it announced a possible privatisation by its controlling shareholder, Best Era International Limited.
  2. Rule 22.1(a) of the Takeovers Code provides that “[d]ealings in relevant securities by an offeror or the offeree company, and by any associates, for their own account during an offer period must be publicly disclosed in accordance with Notes 5, 6 and 7 to this Rule 22.”
  3. The Takeovers Code defines an “associate” to include “a person who owns or controls 5% or more of any class of relevant securities … issued by an offeror or the offeree company, including a person who as a result of any transaction owns or controls 5% or more.”

Page last updated : 3 Aug 2017