Mr Chow Chiu Chi, CoSec of China Automation (0569, privatised), convicted of insider dealing
Company secretary convicted of insider dealing
Issue date: 2020-12-17 18:57:28
The Eastern Magistrates’ Court today convicted Mr Chow Chiu Chi, company secretary of China Automation Group Limited (China Automation), of insider dealing in the shares of China Automation following a prosecution by the Securities and Futures Commission (SFC) (Note 1).
Chow, who pleaded guilty to one count of insider dealing, was granted cash bail of $10,000 and is not allowed to leave Hong Kong during the adjournment. The court adjourned the case to 11 January 2021 for sentencing.
The court heard that on 11 April 2016, Chow became aware that a letter in relation to a possible general offer would be issued to the directors of China Automation and he was instructed to liaise with the legal representatives of China Automation and The Stock Exchange of Hong Kong Limited to arrange suspension of trading. He received the letter at about 2:21 pm on the same day.
Before the trading suspension which took place at around 3:12 pm on 11 April 2016, Chow, who knew that the possible general offer was a piece of inside information, purchased a total of 534,000 China Automation shares through his wife’s securities account between 1:57 pm and 3:03 pm (Note 2).
On 12 April 2016, China Automation published an announcement in relation to the possible general offer. Upon resumption of trading in China Automation shares on 13 April 2016, the company’s share price rose up to $1.20, which represented 18.81% increase from the previous closing price of $1.01.
Between 14 and 21 April 2016, Chow sold some of the China Automation shares and made a profit of $7,417. The notional profit of the shares remained unsold was $36,865.
- China Automation was listed on the Main Board of the SEHK in 2007. The shares were delisted following a proposal of privatisation of the company which became effective from 29 October 2019.
- The shares of China Automation were beneficially owned by Chow but held in his wife’s securities account.