Hong Kong regulator probes 8 over alleged price manipulation of caterer's shares
Hong Kong's Securities and Futures Commission has launched proceedings against three senior executives of Tasty Group and five associates, alleging they manipulated the share price to meet listing requirements for a transfer from GEM to the Main Board.
Hong Kong's Securities and Futures Commission (SFC) has initiated proceedings before the Market Misconduct Tribunal against three senior executives of Tasty Group and five of their relatives, employees and close associates, alleging a scheme to manipulate the company's share price to facilitate its planned transfer from the Hong Kong Stock Exchange's GEM board to the Main Board.
The SFC alleged that between 1 June and 18 September 2020, Tasty Group Chairman and co-founder Wong Yee Shan, Chief Executive Officer and co-founder Chen Wai Zhen, and former Chief Financial Officer Yu Mang Tai instructed or coordinated five other individuals — Chan Suet Yi, Wong Yat Ming, Wong Yat Chun, Wong Ka Ying and Chan Man — to conduct transactions. The five are alleged to have bought and sold Tasty Group shares, either directly or through others, artificially pushing up and maintaining the share price at about HK$1.32 to meet the minimum market capitalisation requirement of HK$500 million for a Main Board transfer.
During the period, the company's share price surged 86 per cent from HK$0.73 to HK$1.36. The SFC said the transactions exhibited characteristics of price manipulation, including aggressive bids placed near market close and orders that could set or influence closing prices. On six trading days, the transactions accounted for all trading in the company's shares for that day.
The SFC said communications among the individuals included discussions about target prices and when and how to place orders. The alleged scheme also involved large fund transfers, with money moved shortly before being used to purchase Tasty Group shares. The share price first closed above HK$1.32 on 27 July 2020, and the company announced its formal application to transfer to the Main Board on 5 August 2020, though it ultimately did not proceed with the planned transfer.
The tribunal will determine whether any market misconduct occurred and identify any individuals who engaged in the alleged misconduct.