Clifford Chance

Record-breaking Compensation and Disqualification orders made against Listed Company Directors in Hong Kong by the Court of First Instance under section 214 of the Securities and Futures Ordinance

20 March 2012

A landmark ruling delivered by Hong Kong's Court of First Instance on 7 March 2012, (Securities & Futures Commission (SFC) v Cheung, Yeung, Li, Chan and Styland Holdings (HCMP 1702 of 2008) ("the Styland case") following a petition hearing in January 2011, has, once again, demonstrated the tough action being taken by the SFC against company executive directors who are found to have breached their fiduciary duties owed to shareholders. This case was also the first time a compensation order has been made directly in proceedings brought by the SFC under section 214 of the Securities and Futures Ordinance ("SFO") against a company director for misconduct. The CFI granted record-breaking HK$85 million compensation orders against two directors and lengthy disqualification orders against all four errant company directors

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