SFC publicly censures Liang Guosheng and imposes a cold-shoulder order for breach of the Takeovers Code

30 Jul 2018

The Securities and Futures Commission (SFC) has publicly censured and imposed a 24-month cold-shoulder order (Note 1) against Liang Guosheng for breaching the mandatory general offer obligation of the Takeovers Code (Note 2).

At the time of the breach Liang held senior positions in three principal subsidiaries and four partnerships of Silver Base Group Holdings Limited (Silver Base) (Note 3). As at 23 July 2017, Liang did not hold any interest in Silver Base whilst his brother and his brother’s family trust, being Liang’s concert parties, held in aggregate 43.83%. Liang acquired shares in Silver Base on-market and by 31 July 2017 his own and his concert parties’ shareholding in Silver Base increased from 43.83% to 45.87%, triggering a mandatory offer obligation under Rule 26.1(d) of the Takeovers Code. No such offer was made. 

Liang told the Executive (Note 4) that the acquisitions were inadvertent mistakes due to his ignorance of the Takeovers Code. He accepted that he has breached the Takeovers Code and deprived Silver Base’s shareholders of the right to receive a general offer for their shares. Liang agreed to the current disciplinary action against him.

Parties who wish to take advantage of the securities markets in Hong Kong should conduct themselves in matters relating to takeovers, mergers and share buy-backs in accordance with the Takeovers Code. Liang’s conduct fell short of the expected standards and disregarded one of the most fundamental provisions of the Takeovers Code. This merits strong disciplinary action.

The Executive Statement can be found under the “Listings & takeovers – Takeovers and mergers – Decisions & statements – Executive decisions and statements” of the SFC website.



  1. Liang will be denied direct or indirect access to the Hong Kong securities market for a period of 24 months commencing on 30 July 2018 to 29 July 2020.
  2. The Code on Takeovers and Mergers.
  3. Silver Base has been listed on the Main Board of The Stock Exchange of Hong Kong Limited since 8 April 2009.
  4. The Executive Director of the SFC’s Corporate Finance Division or his delegate.

Page last updated : 30 Jul 2018