not vested
Tribunal rules against Chaoda Tony Liaw and agencies
Thursday, September 29, 2011
Chaoda International Agriculture Holdings (0682) chairman Kwok Ho, chief financial officer Andy Chan Chi-po and
George Stairs, a Fidelity portfolio manager, are suspected to have engaged in insider dealing, a local tribunal has ruled.
The Market Misconduct Tribunal yesterday said Kwok and Chan discussed a share placement with six institutional investors -
Fidelity, AllianceBernstein, BlackRock, Wellington Management, Janus Capital and Boston Company Asset Management -
on June 15 and 16, 2009.
Merrill Lynch (Asia Pacific) was the sole bookrunner in the placing exercise.
The two senior executives allegedly sold 374,000 shares at HK$5.30 per share on June 16.
Stairs, who was aware of the details of the placement in advance, arranged to sell the shares, which resulted in a gain of HK$1.98 million.
Chaoda aimed to raise HK$1.78 billion by placing 380 million shares at HK$4.60 each, representing
a 12.9 percent discount to the stock's closing price of HK$5.28 on June 16.
The placement was announced on June 18, 2009, before the market opened. But the tribunal found that Stairs submitted a sell order at 11am on June 16, two days before the announcement was made.
It was handled by Fidelity's Hong Kong staff and was executed the same day at 4.09 pm.
The next day, at 5pm, Stairs placed a buy order for 630,000 shares at HK$4.60 per share. This order was executed on June 18.
The tribunal determined that the chairman and chief financial officer "knew or had reasonable cause to believe that Stairs would make use of the relevant information" to deal in Chaoda shares.
Further action by the tribunal will be announced later.
Kwok, 55, is a member of the Chinese People's Political Consultative Conference. He has a 19.3 percent stake in the fruit and vegetable producer.
Shares in Chaoda slumped 27 percent on Monday before trading was suspended.
Since May, Chaoda has also been fending off suspicions aired by a local magazine that it had exaggerated the extent of the farmland it holds.
In the meantime, a group of hackers,
Anonymous Analytics, claimed in a 38-page report that Chaoda management has
moved more than US$400 million out of the company "under the cover of
inflated capex [capital expenditure] spending and related party transactions."
The company has raised more than US$1.1 billion from investors via share placements since its initial public offering in 2000.
Anonymous, however, has acknowledged it has an "indirect interest" in the company, where its related parties, including associates, partners, affiliates, consultants and clients, have shorted Chaoda shares.
http://www.thestandard.com.hk/news_deta ... 10929&fc=7
It's all about "how much you made when you were right" & "how little you lost when you were wrong"