Hong Kong Securities and Futures Commission: Seeks acquisition order against former chairman Wu Yu of TARGET INS, involving embezzlement of over 1.5 billion US dollars.

On June 17, the Hong Kong Securities and Futures Commission officially initiated legal proceedings in the original court seeking a takeover order against Wu Yu, former chairman of TARGET INS Holdings Limited, requiring him to acquire the shares of Taiga Holdings held by the public. Wu Yu is suspected of breaching his duty of care, ultimately leading to the delisting of Taiga Holdings after its suspension. This legal action stems from the Hong Kong Securities and Futures Commission investigation into Nerico Brothers Limited (NBL) failing to repay over $150 million in funds. The investigation revealed that this fund was deposited by TARGET INS Limited, the main operating subsidiary of Taiga Holdings, in NBL from June 2020 to October 2021, purportedly for foreign currency program trading. The Hong Kong Securities and Futures Commission alleges that Wu Yu was involved in a fraudulent scheme with the intent of misappropriating all or part of the funds. These funds were further transferred to a fund registered and established in the Cayman Islands, managed by Anshan Capital Limited and controlled by Wu Yu. If not for Wu Yu's misconduct, the shares of Taiga Holdings would not have been suspended for trading and ultimately delisted, and shareholders would have been able to sell their shares on the open market to recover their investment value. The Hong Kong Securities and Futures Commission also seeks a court order to disqualify Wu Yu and ten other former directors of Taiga Holdings. These ten respondents include former executive director and chairman Zhang Dexi, former executive director Chen Xuezhen, Rui Yuanqing, Wei Weicheng, former executive director and CFO Liu Jiayi, former executive director and CEO Mu Honglie, former independent non-executive director Yin Jintao, Liang Haoran, Huang Shaokai, and another former executive director. The Hong Kong Securities and Futures Commission alleges that most respondents, who were directors of TARGET INS at critical times, were negligent in their duties, allowing funds to be held in NBL in situations involving significant concentration risks, and failing to establish adequate security measures and surveillance mechanisms to prevent the loss of funds. To ensure funds are available to comply with any future acquisition orders by the court, the Hong Kong Securities and Futures Commission issued restriction notices to Futu Securities International (Hong Kong) Limited and Interactive Brokers Hong Kong Limited in April 2024, prohibiting the two companies from disposing or dealing with assets in several client accounts held by Wu Yu. Furthermore, in separate disciplinary actions taken, the Hong Kong Securities and Futures Commission has revoked the licenses of NBL and Anshan Capital, and their respective senior management (including former director of Anshan Capital, Wu Yu) are also permanently banned from engaging in regulated activities.