On 12 May 2021, the Market Misconduct Tribunal (“MMT”) fined China Medical & HealthCare Group Limited, formerly known as COL Capital Limited (“COL”), and six of its former and current directors a total of $4.2 million for failing to disclose inside information as soon as reasonably practicable following proceedings brought by the Securities and Futures Commission (“SFC”).
COL and the six sanctioned directors admitted that the following financial information came to their knowledge in April 2014:
- profits made from COL’s position in ChinaVision Media Group Limited (“ChinaVision”) (now known as Alibaba Pictures Group Limited);
- overall profit figures for March 2014;
- profit for the nine months ended March 2014; and
- significant gains from COL’s investment trading in the shares of ChinaVision.
The above information was however not made public until 10 September 2014 when a positive profit alert was published in relation to the company’s financial performance for the year ended 30 June 2014.
The six former and current directors also admitted that their negligent conduct had resulted in COL’s breach of the requirements of the corporate disclosure regime.
The MMT further ordered that:
- COL and the six former and current directors pay the SFC’s investigation and legal costs, as well as the costs of the MMT proceedings; and
- they attend an SFC-approved training programme on the corporate disclosure regime, directors’ duties and corporate governance.
A key takeaway that the SFC reiterated in their regulatory announcement was that listed corporations are required by the law to disclose inside information that has come to their knowledge as soon as reasonably practicable. Timely disclosure of inside information is central to the orderly operation of the market and underpins the maintenance of a fair and informed market.
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