HK SFC appeals against the High Court decision to discharge injunction against two BVI companies
In the beginning of this month, the Securities and Futures Commission (SFC) of Hong Kong appealed to the Court of Appeal against the High Court decision to discharge an interim injunction obtained to prevent dissipation of assets in the continuing investigation on insider dealing. The Commission also obtained orders from the High Court and the Court of Appeal for stay of execution of the order to discharge the interim injunction until the determination of the appeal or further court order. By the interim injunction, disposal of up to $43 million was frozen, based on evidence and suspicions that “C”, a person whose identity is the subject of a suppression order, was involved in insider trading of Asia Telemedia shares.
By the decision of the High Court, the interim injunction was discharged against “C” and two British Virgin Islands companies controlled by this person, on the principal ground that the High Court does not have jurisdiction to order injunctions under the Securities and Futures Ordinance in cases when the defendant and the assets to be frozen exist outside the HK Special Administrative Region. The person “C” is residing (or appears to) mainly in Beijing, and the assets are in other offshore jurisdictions (British Virgin Islands).
The SFC’s executive Director of Enforcement, Mr Mark Steward, said that they are eager to resolve this case in the Court of Appeal, as it “raises a serious and important issue about the enforcement of HK’s securities laws against persons who are outside the jurisdiction, and the prevention of misconduct by such persons.”