Compliance & Regulation

SFC publicly censures Fu Kwan for breach of the Takeovers Code

The Securities and Futures Commission (SFC) has publicly censured Fu Kwan, the Chairman of Macrolink Capital Holdings, for acquiring the company’s shares within six months after the close of an offer at prices above the offer price.

This act was a breach of Rule 31.3 of the Code on Takeovers and Mergers (Takeovers Code), according to a press release by the SFC.

On 1 August 2018, Macrolink Group as the offeror, made an unconditional mandatory general offer in cash for the shares of Macrolink Capital at an offer price of HKD0.6217 per share. Upon the close of the offer on 22 August 2018, the offeror and its concert parties held 67.85% of Macrolink Capital’s shares.

On 8 and 9 November 2018, within the six-month period after the close of the offer, Fu made a series of on-market acquisitions of 3,990,000 shares of Macrolink Capital at prices above the offer price, ranging from HKD0.63 to HKD0.72 per share. Fu is a director of the offeror and therefore a person acting in concert with the offeror.

The SFC wishes to take this opportunity to remind practitioners and parties who wish to take advantage of the securities markets in Hong Kong that they should conduct themselves in accordance with the Takeovers Code, the regulator said in the press release. If there is any doubt about the application of the rules, the Executive should be consulted at the earliest opportunity.