28 Oct 2022
The Securities and Futures Commission (SFC) has publicly criticised Gold Dragon Worldwide Asset Management Limited for its failure to disclose dealings in the shares of Shanghai Dongzheng Automotive Finance Co., Limited in contravention of the Code on Takeovers and Mergers (Takeovers Code).
Between 12 March 2021 and 14 April 2022, Gold Dragon, acting as the investment manager of Seahawk China Dynamic Fund, executed 53 trades in Shanghai Dongzheng’s H shares during an offer period and failed to disclose these dealings as required by Rule 22 of the Takeovers Code. Gold Dragon owned or controlled more than 5% of Shanghai Dongzheng’s issued H shares at the relevant time and was therefore an associate of Shanghai Dongzheng.
The Takeovers Executive considers that Gold Dragon, as a fund manager, should put appropriate and adequate compliance systems in place to ensure compliance with all applicable regulatory requirements. As such, the breaches merit disciplinary action.
Gold Dragon accepted that it breached the Takeovers Code and agreed to the disciplinary action taken against it. It has implemented enhancements and remedial measures to ensure future compliance with the Takeovers Code.
The SFC reminds practitioners and parties who wish to take advantage of the securities markets in Hong Kong that they should conduct themselves in matters relating to takeovers and mergers in accordance with the Takeovers Code. In particular, associates must report their dealings in the relevant securities of the offeree company (and of the offeror company in the case of a securities exchange offer) during an offer period in accordance with Rule 22 of the Takeovers Code.
Read more about this update here: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=22PR86