Hong Kong Securities and Futures Commission: Obtain a disqualification order against former directors of Everest International.

On July 11, the Securities and Futures Commission of Hong Kong obtained disqualification orders against four former executive directors of China Forestry International Group Limited (China Forestry), Li Zhigang (male), Lin Pingji (male), Wong Choi Fung (female), and Yeung Kwong Lun (male), as well as former independent non-executive director Wong Yun Kwan (male). Li's disqualification order is for a period of ten years; Wong Yun Kwan's disqualification order is for a period of seven years; while the disqualification orders for the others are for a period of five years each. Legal proceedings against other former directors and senior personnel of China Forestry are ongoing. The five individuals were ordered not to act as directors or liquidators of China Forestry or any other corporation (including any subsidiaries or affiliates of China Forestry), or as receivers or managers of the property or business of China Forestry or any other corporation (including any subsidiaries or affiliates of China Forestry); and not to be involved in any way in the management of China Forestry or any other corporation (including any subsidiaries or affiliates of China Forestry). They were also ordered to pay the costs incurred by the Securities and Futures Commission in these legal proceedings. Following allegations of misconduct by China Forestry's directors and other senior personnel, the Securities and Futures Commission initiated legal proceedings against the former directors. These allegations relate to three acquisition projects carried out between 2007 and 2014, which were part of a carefully orchestrated plan to deplete and misappropriate China Forestry's assets. China Forestry suffered significant losses as a result of these acquisition projects. China Forestry acquired 70% and 30% stakes in a target company alleged to hold forest assets in 2007 and 2009 respectively, totaling HK$1.678 billion. However, the court ruled that these forest assets did not exist. China Forestry also acquired stakes in another company alleged to hold intellectual property rights in certain engineering technologies. The court determined that the value of these technologies was extremely low, if not worthless, and that the transactions were used as a means to transfer substantial funds to China Forestry's major shareholder. The five former directors admitted that they had not taken the necessary steps to ensure a proper and reasonable due diligence on the alleged forest assets in the 2007 and 2009 acquisition projects and/or the target technology in the 2014 acquisition project, thereby breaching their duties. They also admitted to being incompetent, disregarding consequences, or neglectful in reviewing and approving the acquisition projects. As they acknowledged their improper actions, the court issued disqualification orders against them. Public records show that China Forestry International's shares were listed on the Main Board of the Hong Kong Stock Exchange on September 18, 2001, but its listing status was cancelled on June 4, 2020. Li served as an executive director from February 10, 2009, to July 2014, and as chairman from February 17, 2009, to July 16, 2014. Lin served as an executive director from January 29, 2001, to February 17, 2009, and as chairman from September 12, 2001, to February 17, 2009. Wong Choi Fung served as an executive director from January 29, 2001, to October 23, 2007. Yeung served as an executive director from September 1, 2002, to October 23, 2007. Wong Yun Kwan served as an independent non-executive director from April 11, 2007, to June 24, 2010.