The Hong Kong Securities and Futures Commission (SFC) has obtained Court of First Instance orders requiring former senior executives of the now delisted Combest Holdings Limited to fund a record compensation scheme for public shareholders and imposing lengthy disqualifications for misconduct. The orders follow a settlement under which a shadow director, Ng Kwok Fai, and two former executive directors, Liu Tin Lap and Lee Man To, will pay about HKD 192 million for redistribution as special dividends to independent public shareholders. Ng was disqualified for 12 years and Liu and Lee for eight years each from acting as a director or being involved in the management of any corporation, and all three were ordered to pay the SFC’s costs. The SFC’s investigation found that Liu and Lee acted on Ng’s instructions and that the trio orchestrated acquisitions of two subsidiary groups substantially overvalued by HKD 229 million in 2016 and 2017, arranged fictitious loan interest and fee payments totalling HKD 64 million to Ng-related entities, and grossly inflated Combest’s revenue through Ng-related entities across multiple accounting periods between 2016 and 2019. Two shareholders holding 24.4% of Combest agreed to forfeit their entitlement to the special dividends, increasing the amount payable to independent public shareholders by 32.3%, with an indicated distribution of HKD 0.066 per share. An administrator jointly appointed by the SFC and Combest, Bruno Arboit of Kroll (HK) Limited, will implement the compensation scheme and distribute the special dividends to Combest’s independent public shareholders as at the date the funds are deposited into the administrator’s bank account, with shareholders to be contacted in due course.

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