Hong Kong Securities and Futures Commission secures up to four-year disqualification orders against five former Superb Summit directors

The Hong Kong Securities and Futures Commission (SFC) has obtained Court of First Instance disqualification orders against five former directors of Superb Summit International Group Limited, barring them from acting as directors or being involved in the management of any corporation in Hong Kong or elsewhere for between two and a half and four years. The orders followed admissions that the directors breached their duties and were negligent in approving acquisitions of a target company in 2007 and or 2009 that purportedly held forestry assets which did not exist. The disqualified individuals are former executive directors Law Wai Fai, Li Jun and Cheng Man For, and former independent non-executive directors Qiu Jizhi and Chan Chi Yuen. Chan was disqualified for four years, Law and Cheng for three and a half years each, Qiu for three years and Li for two and a half years, and they were ordered to pay the SFC’s costs. In relation to the 2007 acquisition, Law, Li, Qiu and Chan failed to review key documents or scrutinise due diligence methodologies and assumptions, while for the 2009 acquisition, Law, Cheng and Chan failed to properly consider ownership of the alleged forestry assets and approved an announcement containing false or misleading information. The case forms part of section 214 Securities and Futures Ordinance proceedings commenced in December 2020, which the Court approved to be disposed of using the Carecraft procedure based on agreed facts and proposed orders. The SFC’s proceedings against other former directors and officers of Superb Summit remain ongoing.