Select Page

Hong Kong – Inspector appointed by Financial Secretary under Section 841(2) of Companies Ordinance (Cap. 622) to investigate into affairs of Next Digital Limited

Inspector appointed by Financial Secretary under Section 841(2) of Companies Ordinance (Cap. 622) to investigate into affairs of Next Digital Limited

******************************************************************************************


     The Government announced today (July 28) that, pursuant to the power conferred on him by section 841(2) and (3) of the Companies Ordinance (Cap. 622) (the Ordinance), the Financial Secretary, Mr Paul Chan, has appointed Mr Clement Chan Kam-wing as the Inspector to investigate into the affairs of Next Digital Limited (Stock Exchange of Hong Kong Stock Code: 282) (NDL). 
 
     Under sections 841(2) and (3) of the Ordinance, the Financial Secretary may appoint a person to investigate a company’s affairs, if it appears to him that there are circumstances suggesting the following and he is satisfied that it is in the public interest to appoint the Inspector:

(a) the company’s affairs are being or have been conducted:

  1. in a manner unfairly prejudicial to the interests of its members generally or of one or more members;
  2. with intent to defraud its creditors or the creditors of any other person; or
  3. for any other fraudulent or unlawful purpose; or

(b) the persons concerned with the formation of the company or the management of its affairs have, in relation to the formation or management, engaged in fraud, misfeasance or other misconduct towards it, its members or its creditors.

     In invoking the statutory power to make the appointment, the Financial Secretary has reviewed the relevant facts and circumstances in relation to the affairs of NDL and all the available information. It appears to the Financial Secretary that there are circumstances suggesting the existence of a state of affairs referred to in section 841(2) of the Ordinance in relation to NDL, including, among others, that NDL has been run in a manner unfairly prejudicial to the interests of its shareholders and creditors; that the officers of NDL have used the listed company to conduct unlawful activities and have themselves been involved in various alleged fraud offences and misconduct closely associated with the affairs of NDL; that the senior officers of NDL have breached their fiduciary duties and failed to observe proper standards of care in the performance of their duties; and that the governance of the company had seriously fallen short of that expected of a listed company.
 
     Circumstances that have particularly given rise to great concern include, first, on May 26, 2021, NDL made a corporate announcement, effectively indicating that the company had a strong liquidity position that would provide it with sufficient working capital for continued operation for another 18 months from April 1, 2021. However, with only HK$18 million in bank balances held by three of the company’s subsidiaries being frozen by the Secretary for Security on June 17, 2021, NDL announced in less than a week on June 23, 2021 that it had to cease one of its major subsidiaries’ publication businesses on the following day. Second, the Financial Secretary also noticed that NDL had failed to comply with the Listing Rules to publish its preliminary annual results in time, and it subsequently made an announcement on July 22, 2021, revealing for the first time that it had made an early loan repayment of $150 million to its former chairman and major shareholder on April 1, 2021, substantially reducing its cash balance, when the previous financial reports of NDL suggested that there was still considerable time to go before the loan was due. This casts doubt as to whether such repayment was potentially intended to defraud the company’s creditors. Third, the Financial Secretary noticed that the officers of NDL were charged in April 2021 for fraud in relation to the misuse of one of its subsidiaries’ premises by the subsidiary. Fourth, in end-2020 and mid-2021, the senior officers of NDL and the three subsidiaries of NDL were charged for various serious criminal offences under the Hong Kong National Security Law, raising the question of whether the affairs of NDL had been conducted by its officers in pursuit of their personal interests to the detriment of the public shareholders.  
 
     All the circumstances give rise to grave concerns on whether there was serious mismanagement on the part of NDL, in particular the involvement of its senior officers in the alleged criminal offences and/or misconduct and the officers’ failure in their duty to prevent this from happening, and whether the officers of NDL had taken reasonable and adequate steps to protect the interests of its shareholders and creditors.
 
     In view of the above, the Financial Secretary considers it in the public interest to invoke the relevant statutory power to appoint an inspector to investigate into the affairs of NDL. As a leading financial and commercial centre, Hong Kong attaches paramount importance to upholding the integrity and reputation of its corporate sector and the corporate governance regime, which is the hard-earned result of the continuous efforts of the Government, regulators and the business community over the years. Compliance with a high standard of governance by companies, in particular listed companies, is vital to Hong Kong in maintaining the quality, fairness and effectiveness of its market. It is also necessary to ensure that the right of incorporation is not abused and that public confidence in how companies conduct their affairs is maintained. It is therefore important, and in line with international practice, that any suspected serious wrongdoings of a company, in particular a company that is publicly listed, should be investigated if the circumstances so warrant. 
 
     The Inspector appointed is requested to investigate into the affairs of NDL, draw his own conclusions and report on, among others: (i) whether the affairs of NDL are being or have been conducted in a manner unfairly prejudicial to the interests of its members, with intent to defraud any creditors, or for any fraudulent or unlawful purpose; (ii) whether the affairs of NDL have been conducted in the personal interests of any of its senior officers to the detriment of its public shareholders; (iii) whether officers of NDL have engaged in fraud, misfeasance or other misconduct towards NDL, its members or its creditors; (iv) whether full, adequate and timely disclosures were made by NDL to its shareholders; (v) whether any officers of NDL have been in breach of any of their duties or negligent in performing their functions; (vi) whether transactions concerning NDL in relation to loan(s) provided by its former Chairman and/or the repayment(s) were made bona fide, at arm’s length and in the normal course of business; (vii) whether NDL is generally in a healthy state of governance commensurate with that expected of a listed company; and (viii) whether it is expedient in the public interest for the Financial Secretary to consider making an application under section 879(6) of the Ordinance for a disqualification order against any person to be made under section 168J of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32).
 
     The Inspector’s powers in regard of the investigation are clearly set out in the Ordinance. For example, under section 846 of the Ordinance, the Inspector appointed may require the company, an officer or former officer of the company, an agent or former agent of the company and a person in possession of information relevant to the investigation, to produce within the specified time any record or document that may be relevant to the investigation, and attend before the Inspector, at the specified time and place, and answer any questions, whether on oath or otherwise, relating to any matter under investigation that the Inspector may raise. The Inspector would submit a Final Report to the Financial Secretary in six months.  
 
     Mr Clement Chan, the Inspector appointed, is a senior accountant and served as a president of the Hong Kong Institute of Certified Public Accountants (HKICPA). He was also a non-executive director of the Securities and Futures Commission. He has a wealth of experience in public service, being currently a non-executive director or member of several institutions, namely the Hong Kong Mortgage Corporation Limited, the Standing Committee on Company Law Reform, the Inspection Committee of the Financial Reporting Council, the HKICPA’s Audit Committee and Regulatory Oversight Board, and the Independent Police Complaints Council. 

Hong Kong – Hong Kong Customs seizes suspected scheduled red sandalwood (with photos)

Hong Kong Customs seizes suspected scheduled red sandalwood (with photos)

*************************************************************************


     Hong Kong Customs yesterday (July 27) seized about 2 370 kilograms of suspected scheduled red sandalwood from a container at Kwai Chung Customhouse Cargo Examination Compound. The estimated market value of the seizure was about $1.47 million. A man was arrested.
      
     Through risk assessment, Customs yesterday inspected a container arriving in Hong Kong from Korea. Upon inspection, Customs officers found the suspected scheduled red sandalwood concealed in 77 pieces of wooden furniture inside the container.

     After follow-up investigation, Customs officers arrested a 32-year-old man suspected to be connected with the case in Kwai Chung on the same day.

     Investigation is ongoing and the arrested man has been released on bail pending investigation.

     Smuggling is a serious offence. Under the Import and Export Ordinance, any person found guilty of importing or exporting unmanifested cargo is liable to a maximum fine of $2 million and imprisonment for seven years.

     Under the Protection of Endangered Species of Animals and Plants Ordinance, any person found guilty of importing or exporting an endangered species without a licence is liable to a maximum fine of $10 million and imprisonment for 10 years.

     Members of the public may report any suspected smuggling activities to Customs’ 24-hour hotline 2545 6182 or its dedicated crime-reporting email account (crimereport@customs.gov.hk).

Hong Kong – Update on monitoring COVID-19 vaccination

Update on monitoring COVID-19 vaccination

*****************************************


     In the preceding week till 11.59pm on July 25, the Department of Health (DH) received 179 reports (Note 1) of adverse events following COVID-19 immunisation. No death case was reported by the Hospital Authority (HA) involving individuals who had received vaccines within 14 days before they passed away and had potential association with vaccination.

     As at 8pm on July 25, over 5.27 million doses of COVID-19 vaccines had been administered for members of the public. Around 3.03 million people had received at least one dose of vaccine, accounting for 44.6 per cent of the population aged 12 or above. The DH received 4 539 reports (Note 1) of adverse events (0.09 per cent of the total vaccine doses administered). Among the death cases concerning persons who had been vaccinated, including 27 cases (Note 2) with vaccination within 14 days before they passed away (0.0005 per cent of the total vaccine doses administered), none of the death cases was associated with vaccination.

     As at July 25, the Expert Committee on Clinical Events Assessment Following COVID-19 Immunisation had concluded that 13 death cases had no causal relationship with vaccination, and preliminarily considered that 10 cases were not associated with vaccination. The four remaining cases were pending assessment. The Expert Committee considered that there is no unusual pattern identified so far, and will continue to closely monitor the relevant situation and collect data for assessment.

     According to information from the HA, during the period from June 28 to July 25, the ratio of death cases out of those without a vaccination record was 74.2 cases for every 100 000 people, whereas the ratio of death cases for those with a vaccination record was 2.3 cases for every 100 000 people. The overall death rate is similar to that recorded in the past three years. Out of those without a vaccination record, the ratio of death cases with acute stroke or acute myocardial infarction was 3.9 cases for every 100 000 people, whereas the ratio of death cases under the same category for those with a vaccination record was 0.2 cases for every 100 000 people. Furthermore, the ratio of miscarriage cases out of those without a vaccination record was 28.1 cases for every 100 000 people, whereas the ratio of miscarriage cases for those who had a vaccination record was 6.4 cases for every 100 000 people. Based on the statistical analysis of the above figures, there is no evidence that vaccination increases the risk of death or miscarriage for recipients. The relevant reference statistics will be uploaded to the thematic website for the COVID-19 Vaccination Programme.

     The majority of non-death cases of adverse events received so far are relatively minor cases. The relevant details can be found in the “Report on the Safety Monitoring of COVID-19 Vaccines in Hong Kong” (www.drugoffice.gov.hk/eps/do/en/doc/Safety_Monitoring_of_COVID-19_Vaccines_in_Hong_Kong.pdf).

Note 1: Provisional figures. During the same period, the DH received five reports of suspected myocarditis or pericarditis involving adolescents aged below 18 after receiving COVID-19 vaccination. The cases involved five males aged from 12 to 15. They experienced chest pains one to two days after receiving the Comirnaty vaccine. Their conditions are stable.
Note 2: In the preceding week till 11.59pm on July 25, the DH received a death report involving an individual who had received COVID-19 vaccination within 14 days before passing away. It involved a 74-year-old female who received the Sinovac COVID-19 vaccine. There is no clinical evidence that the incident arose from vaccination. The clinical cause of death is hypertensive heart disease.

Canada – Statement by Minister Guilbeault on the Day of Commemoration of the Great Upheaval

July 28 marks the Day of Commemoration of the Great Upheaval of the Acadian people

OTTAWA, July 28, 2021

On this day 266 years ago, the Acadian people faced the tragedy of the Great Upheaval.

In 1755, about 10,000 Acadians were violently torn from their roots and taken from their family and community. The British authorities forcibly deported them from their lands and left them without any support.

Thousands of Acadians perished during the deportation, a long and arduous journey from New France (today Nova Scotia, New Brunswick and Prince Edward Island) to the American colonies, Louisiana or France.

Despite the pain, the trauma, and the damage caused by this tragedy, the Acadians have held their heads high and continue to educate Canadians about their history. Some families proudly returned to settle in Acadia over time. It is thanks to the courage, resilience and perseverance of these people that we know the Acadia of today: a dynamic community with a rich identity and culture that continues to thrive in an array of artistic, cultural, business and sporting fields.

Today, Acadians are recognized for their valuable, numerous and diverse contributions to Canadian society for over 400 years. Let us remember the great suffering that they endured, honour their resilience, and celebrate the vitality of their culture and heritage.

Camille Gagné-Raynauld

Press Secretary

Office of the Minister of Canadian Heritage

camille.gagne@canada.ca

Canada – Parliamentary Secretary Adam van Koeverden to Announce Funding for Guelph Soccer

GUELPH – Adam van Koeverden, Parliamentary Secretary to the Minister of Diversity and Inclusion and Youth and to the Minister of Canadian Heritage (Sport), will make a virtual funding announcement regarding gender equality in sport in Guelph on Thursday. He will make the announcement on behalf of the Honourable Steven Guilbeault, Minister of Canadian Heritage.

Journalists must confirm their participation by sending their full name and the name of their media outlet to pch.media-media.pch@canada.ca by 3:00 p.m. on July 28.

A Zoom link will be sent to allow reporters to ask questions following the announcement.

Please note that all details are subject to change. All times are local.

The details are as follows:

EVENT: Press conference

DATE: July 29, 2021

TIME: 10:00 a.m.

LOCATION: Zoom

Camille Gagné-Raynauld

Press Secretary

Office of the Minister of Canadian Heritage

camille.gagne@canada.ca

Canada – Media Advisory – Toronto, Ontario

Members of the media are invited to an announcement on active transportation with the Honourable Catherine McKenna, Minister of Infrastructure and Communities.

Toronto, Ontario, July 27, 2021 – Members of the media are invited to an announcement on active transportation with the Honourable Catherine McKenna, Minister of Infrastructure and Communities.

Minister McKenna will be joined by the following speakers:

Andy Filmore, Parliamentary Secretary to the Minister of Infrastructure and Communities and Member of Parliament for Halifax
Pam Damoff, Parliamentary Secretary to the Minister of Indigenous Services and Member of Parliament for Oakville North—Burlington
Denzil Minnan-Wong, Deputy Mayor for the City of Toronto and City Councillor for Ward 16, Don Valley East
Anders Swanson, Chair, Vélo Canada Bikes

Date: Wednesday, July 28, 2021

Time: 2:30 p.m. EDT

Location:

Harbourfront Centre (Canada Square – East of The Power Plant )

235 Queens Quay West

Toronto, Ontario

Members of the media are required to RSVP with Infrastructure Canada Media Relations (media@infc.gc.ca) to confirm their participation.

Livestream: Members of the public are invited to view the live announcement on Infrastructure Canada’s Facebook page at: https://www.facebook.com/InfrastructureCanadaENG/live.

Emelyana Titarenko

Press Secretary

Office of the Minister of Infrastructure and Communities

873-355-9576

emelyana.titarenko@infc.gc.ca