The Court of First Instance (CFI) announced that it has granted orders sought by the Hong Kong Securities and Futures Commission (SFC) in its proceedings against Qunxing Paper Holdings Company Limited (Qunxing), its former chairman and vice-chairman – Mr Zhu Yu Guo and his son, Mr Zhu Mo Qun – as well as its subsidiary Best Known Group Limited, (collectively the defendants) to compensate investors who subscribed for Qunxing shares in its initial public offering or purchased them in the secondary market between 2007 and 2011.
The court also ordered that payments be made to Victory Asset Management Limited, which subscribed for 206,560,000 unlisted warrants of Qunxing in January 2011 (the total sum of payments to be made under the orders is $1.42 billion. The SFC has to date located about $112 million held by the defendants in Hong Kong).
The court found that the defendants had disclosed false or misleading information in Qunxing’s IPO Prospectus in 2007 as well as its results announcements for the financial years ended on 31 December 2007 to 31 December 2011 by materially overstating its turnover and understating its bank borrowings.
The SFC commenced its proceedings at the end of 2013. The case was heard between May and August 2017.
The complete announcement can be seen here.