First tribunal decision for breaches of disclosure obligations

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Hong Kong’s Market Misconduct Tribunal (MMT) found in November 2016 that AcrossAsia Limited (AAL), its former chairman and independent non-executive director Albert Saychuan Cheok, and its chief executive officer and executive director Vicente Binalhay Ang, breached the disclosure obligations under the Hong Kong Securities and Futures Ordinance (SFO) by failing to disclose inside information as soon as reasonably practicable.

This is the first concluded MMT case dealing with breaches of the disclosure obligations since it came into force on 1 January 2013. It highlights the importance of making timely disclosure of inside information and provides useful tips on what constitutes “as soon as reasonably practicable”.

First tribunal decision for breaches of disclosure obligations In this case, the relevant information involved foreign court documents concerning potential insolvency, possible loss of control over a major asset of the listed company and a material increase in financial risks. The MMT considered the time when the obligation to disclose was triggered (i.e., when it was reasonably practicable for AAL to disclose the inside information), and took into account the date when legal advice was sought. This is a good reminder for listed companies that prompt legal advice and careful attention to the handling of court documents continue to be of utmost importance.

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Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Danian Zhang (Shanghai) at: danian.zhang@bakermckenzie.com