Hong Kongs Securities and Futures Commission: Former directors and executives of China Oil Gas Group Limited ordered to compensate a total of 595 million Hong Kong dollars for fraudulent acquisition.

On January 21st, the Securities and Futures Commission of Hong Kong announced that it had obtained orders from the original court against three former directors and senior executives of the Qifeng International Group Limited (Qifeng), requiring them to pay a total of 595 million Hong Kong dollars to Qifeng as compensation for their involvement in a fraudulent scheme to deceive the company. The court also issued a disqualification order for Yang for a period of 15 years, and for Wu and Chen for a period of 12 years. In addition to the aforementioned three individuals, ten former directors of Qifeng had their directorship disqualified for periods ranging from two and a half to ten years. The Hong Kong Securities and Futures Commission's lawsuit against Yang mainly revolved around a corporate acquisition that resulted in significant losses for Qifeng. The court ruled that Yang had acted as a de facto director and had concealed his personal interests in Qifeng in a 2009 acquisition project where the target company claimed to hold forest assets that did not actually exist. As a result, Qifeng suffered a loss of 347 million Hong Kong dollars due to Yang's fraudulent actions in facilitating the transaction. The court also ruled that Yang was the mastermind behind another fraudulent acquisition in 2014, where Qifeng acquired an engineering and technology company that was allegedly overvalued. This acquisition led to the misappropriation of 248 million Hong Kong dollars from Qifeng. Furthermore, the court ruled that Wu played an active role in the 2014 acquisition project, while Chen was also involved, thus breaching their fiduciary duties to Qifeng. Therefore, the court ordered Yang to compensate Qifeng 347 million Hong Kong dollars for the 2009 acquisition project, and ordered Yang, Wu, and Chen to jointly and severally compensate Qifeng 248 million Hong Kong dollars for the 2014 acquisition project. Mr. Michael Duignan, the Executive Director of Enforcement at the Securities and Futures Commission of Hong Kong, stated: "The court's ruling sends a clear message to the public that individuals must be held accountable for their actions to safeguard the interests of shareholders of listed companies. Responsibility should not be limited to company directors, but should also extend to senior executives. Therefore, whether they are directors or senior executives, those in positions of responsibility must understand that they are accountable for their actions."