According to Hong Kong regulator the Securities and Futures Commission (SFC), both company founder Kenneth Cheung Chi Shing and his wife, Yvonne Yeung Han Yi, directly or indirectly benefited from the deals, allowing them to gain HK$79m and HK$6.95m respectively.
The transactions were neither properly disclosed nor approved by Styland and its shareholders, the SFC said, and caused damage to the company.
The Court of First Instance, which handed down the compensation order, heard evidence that Styland appointed an independent committee to investigate the transactions which, after the SFC commenced its own proceedings in 2008, reported its findings to a general company meeting.
As a result, the independent shareholders approved the deals and ratified the directors’ conduct. However, the Court heard, the approvals and ratifications were “defective”, because the independent committee failed to report the nature of the benefits paid to Cheung and Yeung.
In addition, the SFC alleged that Styland had suffered several unquantified investment losses owing to misconduct. The Court declined to order an assessment of these losses, the regulator added, deciding that this was an issue to be determined by Styland, in light of its judgment.
This is the first time a compensation order has been made directly in proceedings brought by the SFC under section 214 of the Securities and Futures Ordinance, the regulator noted.
Both Cheung and Yeung were additionally disqualified for 12 years by the Court. A third former Styland director, Miranda Chan Chi Mei, was disqualified for seven years, while a fourth, Steven Li Wang Tai, was earlier banned for a period of six years.
According to the Styland website, the company, which engages in brokerage, financing, property investment and development and general trading, was founded by Cheung in 1976.
Its shares were listed on the Stock Exchange of Hong Kong in 1991, but were later suspended by the exchange for six years, until they resumed trading on 15 Dec, 2011.
Cheung, who announced his retirement from the business in 2002, is described in his profile as spending his time “fishing, reading and studying literature with friends, as well as vacationing throughout China”.
