This latest example of strategic coordination between Hong Kong regulators confirms a broader regulatory mission and shared objectives.

By Dominic Geiser, Truman Mak, Evangeline Tsui, and Charlotte Wong

On 5 March 2024, the Hong Kong Stock Exchange (HKEx) issued a Statement of Disciplinary Action (Statement) against two former directors (the Former Directors) of a company listed on the Growth Enterprise Market (GEM) of the HKEx for misappropriating company funds during the listing process. The disciplinary action followed efforts by the HKEx and the Securities and Futures Commission (SFC) to investigate the directors, and highlights strategic coordination on enforcement actions on IPO-related misconduct. The Monetary Authority of Singapore (MAS) also provided assistance.


The Former Directors were executive directors and controlling shareholders of Global Uin Intelligence Holdings Limited (formerly known as Global Dining Holdings Limited and Singapore Food Holdings Limited) (Company), a Singapore-based food and beverage company.

Shortly after the Company was listed, the Company discovered a material discrepancy between the expected listing expenses as disclosed in the Company’s listing documents and the amount actually incurred as it was preparing its annual report. The excess was attributable to a S$1 million fee and discretionary bonus (Payment) paid to an IPO consultant of the Company in Singapore (the IPO Consultant). The Payment was not disclosed in the listing documents, nor to the professional advisors and other board members of the Company.

Subsequently, the Company’s sponsor, independent advisor, and independent non-executive directors, as well as the HKEx and the SFC, enquired about the Payment. A party related to the IPO Consultant informed the Company’s sponsor that the Payment had in fact been rerouted from the IPO Consultant to the Former Directors and was used to repay amounts owed by the Former Directors to the Company. The Former Directors denied this, maintaining that the Payment was a discretionary bonus awarded to the IPO Consultant for assistance provided in relation to the listing. The Former Directors, however, acknowledged that the Payment should not have been made out of the Company’s IPO proceeds and procured a refund from the IPO Consultant to the Company.

The Company’s independent advisor also conducted an independent investigation, but the evidence gathered was insufficient to show that the Payments had been rerouted to the Former Directors due to the Former Directors’ and IPO Consultant’s refusal to provide copies of their bank statements. More crucially, while the Former Directors agreed to provide the lists of their bank accounts, they omitted to include the bank accounts into which the misappropriate funds had been paid.

With the SFC’s assistance, however, it became clear that the Payment had indeed been transferred to a joint account held by the Former Directors, S$807,115 of which was used to repay their debts owed to the Company. The MAS also provided assistance to the SFC and HKEx investigations.

Decision of the GEM Listing Committee

The GEM Listing Committee of the HKEx found that the Former Directors had acted dishonestly and in breach of their fiduciary duties by misappropriating the Company’s assets and rerouting the Company’s IPO proceeds to themselves. In doing so, the Former Directors abused their position as directors and misled the Company’s investors and the public. Further, the Former Directors failed to cooperate with the HKEx, the SFC, and the Company’s professional advisors during enquiries about the Payment and failed to provide accurate and complete information to the HKEx, such as the full details of their bank accounts and bank statements.

Accordingly, the Former Directors’ actions amounted to serious breaches of various GEM Listing Rules (GLR) and undertakings provided by the Former Directors pursuant to the GLR, including:

  • GLR 5.01, which requires directors to fulfil fiduciary duties and duties of skill, care, and diligence to a standard at least commensurate with the standard established by Hong Kong law;
  • GLR 17.55B, which requires a party subject to the enquiries or investigations by the HKEx or the SFC to provide information or explanation which is accurate, complete, and up to date; and
  • obligations under the then Appendix 6A of the GEM Listing Rules, including the undertaking to comply with the GLR to the best of their abilities and cooperate in any investigation conducted by the HKEx.

In light of the breaches committed, a Director Unsuitability Statement was imposed against the Former Directors, pursuant to which the HKEx considers the Former Directors unsuitable to remain as directors or hold any position within the senior management of the Company or its subsidiaries.


Since the issuance of the Joint Statement on IPO-related misconduct by the SFC and HKEx in May 2021, the SFC and HKEx have been working together to detect and combat IPO-related misconduct. In recent years, the SFC has also identified closer collaboration with local regulatory counterparts and overseas regulators as one of its enforcement priorities, most notably in the SFC’s Strategic Priorities for 2024-2026 that was published earlier this year. The joint efforts by the SFC and the HKEx in this instance, as well as the assistance afforded by the MAS, is a clear indication of their continued commitment to collaborate and provide mutual assistance to advance their regulatory mission and objectives, protect the investing public, and maintain the quality of the Hong Kong financial market.