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Market Misconduct Tribunal sanctions Cheng Chak Ngok for insider dealing in China Gas shares

Issue date: 2021-06-11 17:31:57

The Market Misconduct Tribunal (MMT) has banned Mr Cheng Chak Ngok, former executive director, chief financial officer and company secretary of ENN Energy Holdings Limited, from dealing in securities in Hong Kong for 54 months after finding him culpable of engaging in insider dealing in the shares of China Gas Holdings Limited (China Gas) in 2011 following a retrial (Notes 1 to 4).

Cheng has also been disqualified for a period of 54 months from being a director, or be concerned or take part in the management of a listed corporation.  The MMT said in its determination on sanctions that he is “unfit to be a director of any corporation, whether listed or not” and that he “abused his expertise and breached the trust and confidence which he enjoyed” (Note 5).

Noting Cheng’s “misconduct brought Hong Kong into disrepute as a financial centre”, the MMT made the following additional orders:

• Cheng not to engage in insider dealing again in the future;
• the profit of $2,948,030.54 gained by Cheng from his insider dealing in China Gas shares be disgorged;
• Cheng to pay the costs and expenses of the Government and the Securities and Futures Commission (SFC) for the retrial; and
• the MMT reports be referred to the Hong Kong Institute of Certified Public Accountants with a recommendation to take disciplinary action against Cheng (Notes 6 to 9).

End

Notes:

1. The retrial was heard before the MMT Chairman, Mr Kenneth Kwok SC, and two lay members, Ms Lai Pik Chi Peggy and Ms Lai Tin Yin Fion.
2. Please see the SFC’s press releases dated 25 July 2016, 24 March 2017, 11 September 2018, 26 April 2019 and 10 December 2020.
3. The MMT’s report is available on its website.
4. Under section 257(1)(b) of SFO, an order has the effect of prohibiting a person who is the subject of the order from any dealings, directly or indirectly, in the Hong Kong financial market for the length of the order.
5. Under section 257(1)(a) of the Securities and Futures Ordinance (SFO), an order prohibiting a person to take part in the management of a listed company without the leave of the Court of First Instance.
6. Under section 257(1)(c) of the SFO, an order to prohibit a person who is the subject of the order not to engage in any form of market misconduct in the future.
7. Under section 257(1)(d) of the SFO, an order that the person shall pay to the Government an amount of any profit gained or loss avoided by the person as a result of the market misconduct in question.
8. Under sections 257(1)(e) and (f) of the SFO, orders that a person shall pay costs incurred by the Government and the SFC.
9. Under section 257(1)(g) of the SFO, an order that any body which may take disciplinary action against the person as one of its members be recommended to take disciplinary action against him.

Source: SFC