Takeovers Panel finds Chow Yei Ching, Joseph Leung Wing Kong and Oscar Chow Vee Tsung in breach of Takeovers Code

13 Mar 2015



The Takeovers and Mergers Panel (Takeovers Panel) today found that Mr Chow Yei Ching (Chow), Mr Joseph Leung Wing Kong and Mr Oscar Chow Vee Tsung breached the mandatory offer requirement under the Code on Takeovers and Mergers and Share Repurchases (Takeovers Code), in that they acted in concert with the late Ms Nina Kung to obtain and consolidate control over ENM Holdings Ltd (ENM), through the acquisition of voting rights, and there was a failure to make a general offer as required by the Takeovers Code (Notes 1,2 ,3 and 4).

The Takeovers Executive alleged in the disciplinary proceedings before the Takeovers Panel that Chow, the chairman of Chevalier Group, together with his son, Oscar Chow, a director of Chevalier International Holdings Limited, and Leung, the chairman of ENM, actively co-operated to assist Kung to obtain or consolidate control of ENM and avoid the triggering of a mandatory general offer under the Takeovers Code (Notes 5, 6, 7 and 8).

“The Takeovers Executive welcomes the Takeovers Panel’s decision. The mandatory offer requirement in the Takeovers Code is a fundamental provision and underpins the requirement for fair and equal treatment of shareholders of publicly-listed companies. Failure to make an offer that is required to be made constitutes a serious breach of the Takeovers Code,” the SFC’s Executive Director of Corporate Finance, Mr Brian Ho said.

The Takeovers Panel will issue its written reasons in due course.

End

Notes:

  1. On 20 November 2013, the Takeovers Executive commenced disciplinary proceedings before the Takeovers Panel against Mr Chow Yei Ching, Mr Oscar Chow Vee Tsung and Mr Joseph Leung Wing Kong over a serious breach of the Takeovers Code. Please see the SFC’s press release dated 20 November 2013.
  2. The Takeovers Code is issued by the SFC as one of its functions under the Securities and Futures Ordinance. The Takeovers Code is designed principally to afford fair treatment for shareholders by requiring equality of treatment of shareholders of the same class.
  3. Takeover Executive means the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director.
  4. ENM (formerly known as e-New Media Company Limited) is principally engaged in wholesale and retail fashion wear and accessories, resort and recreational club operations, investment holding and securities trading. The shares of ENM are listed on the Main Board of the Stock Exchange of Hong Kong Limited (Stock Exchange).
  5. The Takeovers Code regards two or more persons as acting in concert in respect of a company if pursuant to an agreement or understanding they actively co-operate, through the acquisition of shares by any of them, to obtain or consolidate control of that company.
  6. Rule 26.1 (in force in December 2000) required a mandatory general offer to be made for all the shares in the company if a person or group of persons acting in concert acquired shares resulting in either:

     

    (i)  the person or concert group collectively holding 35% or more of the voting rights (known as the “trigger”). The trigger threshold was reduced to 30% on 19 October 2001; or

    (ii) the person or concert group collectively holding between 35% and 50% of the shares and then going on to acquire, either individually or as a group, more than 5% in any 12 month period (known as the “creeper”). The creeper threshold was reduced to 2% on 19 October 2001.

  7. At the relevant time, Kung, also known as Nina T H Wang, held a 34.64% interest in ENM. She passed away on 7 April 2007.
  8. Chow is the founder and chairman of Chevalier Group. He is also the controlling shareholder, chairman, and director of Chevalier International Holdings Limited, a company listed on the Main Board of the Stock Exchange.

Oscar Chow is an executive director of Chevalier International Holdings Limited.

Leung is the chairman, executive director and acting chief executive officer of ENM. He became a director of ENM in December 2000.



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