Casino developer Landing International Development has suspended its chairman and executive director Yang Zhihui, after having been notified that the Hong Kong Securities and Futures Commission (SFC) had filed a case accusing him of dishonest behaviour and self-dealing.
The SFC alleged in a petition filed to a Hong Kong court 8 November that Yang, had acted as a “shadow director” of Hong Kong-listed packaging product manufacturer Teamway International Group Holdings Limited, and had breached his fiduciary duties to the company and “undertook certain conduct dishonestly for his private purpose and personal benefits”, according to Landing International’s filing to the Hong Kong stock exchange on Friday.
The SFC seeks to disqualify Yang, who has previously been involved in a number of legal scrapes in mainland China and Cambodia, from participation in the management of Teamway or any other corporation, and to make Yang and other respondents pay compensation to Teamway and relevant subsidiaries for any loss and damage incurred to them.
Yang’s suspension became effective on 18 November, according to the company statement. The casino developer, in which Yang owns a 35.1 percent stake, said it has appointed Chan Mee Sze, an executive director of the company, as the acting chairperson in the interim.
Shadow Director Duo
A separate exchange filing by Hong Kong-listed Teamway, which was known as Jin Bao Bao Holdings Limited until a name change in October 2017, gives more details about the SFC’s complaints.
The SFC alleges that Yang and Ng Kwok Fai, who was deputy chairman of Landing International from 2014 to 2016, orchestrated a fake sale of a 75 percent stake in Teamway to an investment holding company for HK$560 million ($71.8 million) in January 2015 to facilitate the injection of a true buyer’s property development business into the company and the return of the original packaging business to Chao Pang Ieng, the then controlling shareholder of the company. The “true buyer” was not named in the notice.
SFC also claims that Yang and Ng fabricated or substantially inflated the price of a corporate secretarial, consultancy and business valuation service company that the two steered Teamway to acquire in 2016. Moreover, SFC said that Yang and Ng made Teamway dispose of a packaging subsidiary in Chuzhou, in Anhui province, in 2020 at a discounted price in order to repay interest on loans arranged by them.
Teamway said it has been included as a respondent of the legal proceedings so that it could represent itself and benefit from orders sought in the petition.
An initial hearing of the case is scheduled for 2 June next year, at the High Court of Hong Kong, said Teamway’s statement.
Yang’s suspension is the latest scandal surrounding the 51-year-old, following an investigation by mainland regulators in December of 2020 of Shenzhen-listed China Dive Co Ltd, where he was director and general manager.
The diving equipment maker announced that month that Yang had resigned from both positions, and in a separate announcement, said that the China Securities Regulatory Commission was investigating Yang on suspicion of manipulation of the securities market.
About two years before that investigation, Landing International said in a stock exchange filing that it was unable to reach its chairman, with local media reporting that Yang’s disappearance was due to him having been arrested by the Cambodian police at Phnom Penh International Airport.
The detention was said to have been related to business ties between Landing and Huarong International Financial Holdings, which is a unit of the scandal-plagued Huarong Asset Management.
Currently serving as an independent, non-executive director at Landing International is Shek Lai Him Abraham, who in June this year became chairman of Goldin Financial Holdings after the resignation of Pan Sutong.
Although Goldin’s directors lost control of the company last week when it was taken over by joint liquidators, Landing International said in its stock exchange announcement that Shek is still “suitable to continue to act as an independent non-executive director,” as the proceedings are not related to the company.