The Securities and Futures Commission (SFC) of Hong Kong has obtained a disqualification order in the Court of First Instance against Ms Ho Siu Man, a former executive director of First Credit Finance Group Limited.

Ho 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 seven years. The duration of her disqualification reflects the gravity of her misconduct. She was also ordered to pay the SFC’s costs in the proceedings.

The SFC’s legal action against Ho follows an investigation which found that Mr Cho Kwai Chee acted as a de facto director of First Credit, participating in the management of the company’s business or affairs and making decisions of a directorial nature from December 2015 to June 2017. Whilst being a de facto director of First Credit, Cho participated as a placee in a share placement organised by First Credit and, together with his brother, subscribed for untaken rights shares in the rights shares issued by First Credit.

However, the announcements issued by First Credit regarding the completion of the Placing and the Rights Issue incorrectly stated that all placees and subscribers were independent third parties.

Ho admitted that she had breached her fiduciary duties and/or failed to exercise the degree of care, skill and diligence required of her as a director of the company as she:

• ought to have been aware of Cho’s de facto directorship in the company but failed to ensure the company to publish an announcement to disclose his role;
• negligently caused the company to make a false and/or misleading statement regarding the independence of the placees in the Placing announcement;
• recklessly caused the company to make a false and/or misleading statement regarding the independence of the subscribers of the untaken rights shares in the Rights Issue announcement; and
• failed to consider the dilution impact of the Placing on shareholders before approving it.

The SFC’s proceedings against the other four former directors and a former de facto director of First Credit are ongoing.