The Hong Kong Securities and Futures Commission (SFC) reported on a coordinated enforcement action with The Stock Exchange of Hong Kong Limited (the Exchange) involving Main Board-listed FingerTango Inc., where the Exchange has taken disciplinary action against the company and eight former directors and the SFC is seeking disqualification and compensation orders from the Court of First Instance for the same alleged misconduct. The case concerns problematic investments and loans to external parties, with a substantial portion of the lending in default and losses to FingerTango and its subsidiaries exceeding HKD660 million. The SFC’s investigation focuses on directors’ conduct around investment and lending decisions, including a policy adopted at listing that allowed certain investment decisions to bypass board approval. After its July 2018 listing, FingerTango invested HKD450 million of initial public offering proceeds in a fund without the board’s knowledge, later redeeming part of the fund and investing a further HKD250 million in loan notes, with an alleged loss of HKD258.75 million (including accrued interest) following default. The SFC also identified 20 loan agreements entered into between May 2020 and March 2021 with 15 borrowers totalling over HKD500 million, with an impairment loss of about HKD424 million and over 80% of the loans in default; in November 2024, the SFC expanded its court action to cover these loans, including alleged failures to conduct proper procedures and due diligence, and added two subsidiaries as respondents. Proceedings were commenced in October 2023 under section 214 of the Securities and Futures Ordinance, under which the court may disqualify individuals for up to 15 years and make other orders it considers appropriate.

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