The Hong Kong Securities and Futures Commission: Ruling that Pansy Ho committed insider trading before disclosing an unexpected corporate gain of HK$1.15 billion.

The Hong Kong Market Misconduct Tribunal (the Tribunal) has ruled that Sir Dickson Poon, the founder and former Group Executive Chairman of DICKSON CONCEPT (00113), and his investment holding company, Equity Advantage Limited (Equity), committed insider trading offenses after acquiring insider information about a transaction that would ultimately bring approximately HK$1.15 billion in cash to DICKSON CONCEPT. The Tribunal will issue its ruling on the sanctions and corresponding orders against Sir Dickson Poon, Equity, and DICKSON CONCEPT at a later date. In the same inquiry procedure initiated by the Hong Kong Securities and Futures Commission before the Tribunal, it was also ruled that DICKSON CONCEPT violated regulations regarding the disclosure of insider information due to the deliberate actions of Sir Dickson Poon. The case stems from PayPal Holdings, Inc.'s acquisition of Honey Science Corporation (Honey) for approximately US$4 billion in November 2019. At the critical time, DICKSON CONCEPT held about 3.73% of Honey's issued share capital, but the public was unaware of this holding. Following the completion of the acquisition, DICKSON CONCEPT was entitled to receive approximately US$147.6 million (HK$1.15 billion) in cash, resulting in a profit of about HK$928.7 million based on the book value of its investment. This constituted highly price-sensitive information. The Tribunal ruled that when Sir Dickson Poon learned of the insider information on November 21, 2019, he described it as wonderful news and displayed great excitement and enthusiasm. He immediately calculated that the transaction would bring about US$120 million in profit for DICKSON CONCEPT. Meanwhile, Sir Dickson Poon began trading after the trading ban expired on November 28, 2019. Until December 19, 2019, he had, during 13 trading days within that period, purchased a total of 2,756,500 shares of DICKSON CONCEPT through Equity, while the company had not yet disclosed the relevant information to the market. The Tribunal further ruled that DICKSON CONCEPT did not disclose the insider information as soon as reasonably practicable, attributing the company's violations to Sir Dickson Poon's deliberate failure to inform other personnel of DICKSON CONCEPT (including its Board of Directors) of the insider information until the company received the transaction documents at the end of December 2019. The Tribunal determined that Pang Kwan-Tak was not responsible for the company's violations, as he had reasonable grounds to rely on his father, Sir Dickson Poon, and other senior management's assessment of the price-sensitive information.