{"newsRefNo":"26PR173","lang":"EN","title":"SFC commences MMT proceedings against GEM-listed Taste•Gourmet’s top executives and associates over alleged manipulation scheme for Main Board transfer\r\n","html":"

The Securities and Futures Commission (SFC) has commenced proceedings in the Market Misconduct Tribunal (MMT) against three top executives of Taste•Gourmet Group Limited (Taste•Gourmet) and five of their relatives, employees and close associates over an alleged scheme to manipulate the company’s share price in support of its proposed transfer of listing from GEM to the Main Board of The Stock Exchange of Hong Kong Limited (SEHK) (Notes 1 and 2).

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The three top executives of Taste•Gourmet named in the SFC’s action are: Wong Ngai Shan, chairman and co-founder; Chan Wai Chun, chief executive officer and co-founder; and Yu Man To Gerald Maximillian, chief financial officer at the material time. The five relatives, employees and close associates of Wong, Chan and Yu named in the same action are: Olivia Chan, Wong Ngai Ming, Huang Yizhen, Wong Ka Ying and Chan Man (collectively, the Five Other Persons) (Note 3).

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The SFC alleges that, between 1 June 2020 and 18 September 2020 (Relevant Period), Wong, Chan and Yu directed or coordinated trading by the Five Other Persons who allegedly traded in Taste•Gourmet shares themselves or through another person to artificially increase and maintain the price of the company’s shares at around $1.32. This is because based on the number of shares then in issue, Taste•Gourmet needed a share price of at least $1.32 to meet the $500 million minimum market capitalisation requirement for a transfer to the Main Board (Note 4).

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During the Relevant Period, Taste•Gourmet’s share price soared 86% from $0.73 to $1.36. The SFC alleges that the trading of the company’s shares exhibited hallmarks of price manipulation, including aggressive buy orders placed near market close and orders that moved or determined the closing price. There were six days during the Relevant Period when these trades accounted for all daily trading in the company’s shares.

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The SFC further alleges that communications among the Wong, Chan, Yu and the Five Other Persons included discussions about the target share price and when and how orders should be placed. The alleged scheme was also facilitated by substantial transfers of funds which were used shortly afterwards to purchase Taste•Gourmet shares.

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Taste•Gourmet’s share price first closed above $1.32 on 27 July 2020. The company announced on 5 August 2020 that it had submitted a formal application to transfer its listing to the Main Board, with its shares closing at $1.35 on that day. In the end, the proposed transfer did not proceed as envisaged.

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Based upon aforesaid allegations set out in the SFC’s proceedings, the MMT will determine whether any market misconduct took place and the identity of any persons who engaged in the alleged misconduct.

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End

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Notes:

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  1. Taste•Gourmet shares were, and remain, listed on GEM of SEHK (stock code: 8371).
    2. \n
  2. The SFC instituted the MMT proceedings for alleged market manipulation under section 274 of the Securities and Futures Ordinance (SFO). A copy of the SFC’s Notice to the MMT is available on the MMT’s website.
    3. \n
  3. Their relationships with Wong, Chan and Yu are: Olivia Chan, a girlfriend of Yu; Wong Ngai Ming, Wong’s elder brother; Huang Yizhen and Wong Ka Ying, Wong’s nieces and employees of Taste•Gourmet; and Chan Man, Wong Ngai Ming’s friend and an employee of Taste•Gourmet.
    4. \n
  4. Under rule 8.09(2) of the Main Board Listing Rules, one of the requirements for a GEM-listed company to transfer its listing to the Main Board was a market capitalisation of at least $500 million at the time of listing. Based on Taste•Gourmet’s 379,732,000 issued shares at the time, its share price had to be at least $1.32 to meet that requirement.
    5. \n
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