The Securities and Futures Commission (SFC) of Hong Kong has obtained a disqualification order in the Court of First Instance against Zhang Yuqing, the former vice-chairman and executive director of Zhongda International Holdings Limited.

Zhang has been disqualified from being a director and being involved in the management, of any listed or unlisted corporation in Hong Kong, without the leave of the court, for a period of six years. The duration of his disqualification reflects the gravity of his misconduct. He was also ordered to pay the SFC’s costs in the legal proceedings.

The legal proceedings arose from an SFC investigation, which uncovered misconduct by Zhang during his tenure at Zhongda. Specifically, the SFC found that Zhang failed to fulfil his duties as a director with proper skill, care, and diligence by failing to block or disclose to the Board (i) unauthorised fund transfers totalling RMB150 million and (ii) the sale of Zhongda’s stake in “Zhongwei Bus” – both problematic transactions involved two former executive directors of Zhongda (Xu Brothers).

Although no allegation has been made that Zhang personally benefited from the unauthorised fund transfers or the disposal, the Court agreed with the SFC that a six-year disqualification was appropriate after taking into account the seriousness of his breaches and the substantial sums involved.