JOINT PRESS RELEASE
Action against Hing Shing Investments Co ("Hing Shing")
The Securities and Futures Commission ("SFC") and The Stock Exchange of Hong Kong Limited ("the Exchange") jointly announce today that they have taken action against Ms Wong Yuen Fong ("Ms Wong") trading as Hing Shing, a Securities Dealer and a Member of the Exchange, and against Mr Ho Chung Shing, Tommy ("Mr Ho") and Ms Ho Kar Mei, Nancy ("Ms Ho"), dealer's representatives of Hing Shing and registered persons of the Exchange.
The action arose in August 1997 when Mr Kwan Chun Hung ("Mr Kwan"), manager of Hing Shing's Kwun Tong branch office, misappropriated funds and shares of clients of the Kwun Tong branch. The majority of these clients were cash clients. Mr Kwan's registration as a dealer's representative of Hing Shing was revoked by the SFC on 30 October 1997. The SFC also initiated an inquiry of Hing Shing's Kwun Tong branch operation from October 1995 to August 1997 which revealed that Hing Shing was deficient in developing and implementing adequate management, supervision and control over its Kwun Tong branch operation.
Ms Wong, being the sole proprietor and dealer of Hing Shing, had delegated her responsibilities for the securities business of Hing Shing to Mr Ho and Ms Ho.
Mr Ho was ultimately responsible for all cash clients and the securities business of Hing Shing and did not adequately supervise Hing Shing's securities business to the extent of preventing Hing Shing from possible theft or fraud by its employee, namely Mr Kwan.
Ms Ho was responsible for Hing Shing's settlement matters and had contributed, but to a lesser extent than Mr Ho, to the incident as mentioned above.
As a result of the above findings, the SFC has decided to publicly reprimand Ms Wong and Ms Ho and to suspend the registration of Mr Ho for six months. In addition, the Disciplinary Committee of the Exchange ("the Disciplinary Committee") has decided to publicly censure Ms Wong, Mr Ho and Ms Ho, and also fine Ms Wong HK$40,000 and each of Mr Ho and Ms Ho HK$25,000.
In deciding on this course of action, the SFC and the Disciplinary Committee took into account that:
- Ms Wong has undertaken to the SFC to voluntarily surrender her registration as a Securities Dealer.
- Hing Shing has incorporated as a limited company and has registered with the Exchange as a Corporate Member.
- Hing Shing has appointed an independent Dealing Director to be responsible for the day to day operation and management of its business.
- Hing Shing has engaged an independent firm of accountants to perform a review of its internal control procedures and to report the findings to the Exchange and has agreed to implement any recommendations made in the accountants' report to the satisfaction of the Exchange.
- All the employees of Hing Shing are co-operative in the SFC's and the Exchange's investigation.
Corporate Communications Department