SFC secures first-of-its-kind settlement to compensate public shareholders of Combest Holdings Limited

The Securities and Futures Commission (SFC) has reached a settlement for three respondents to pay compensation of about $192 million to the Combest Holdings Limited (Combest) for distribution to independent public shareholders of the delisted company to resolve the court proceedings against them in the High Court of Hong Kong by way of a summary procedure.

The three respondents are Mr Ng Kwok Fai, Mr Liu Tin Lap and Mr Lee Man To. The proposed settlement is subject to the approval of the Court, which has fixed the hearing of the parties’ proposals for the settlement on 2 April 2025. If approved, this will set a record compensation amount in the form of special dividends to independent minority shareholders of a delisted company.

As part of the settlement, the three respondents will pay Combest compensation of about $192 million. Combest has agreed to distribute the full amount of the compensation to its shareholders through special dividends. Additionally, two shareholders who collectively hold 24.4% of Combest have undertaken to return the special dividends they are entitled to receive for redistribution to independent public shareholders. If the Court approves the settlement, the independent public shareholders will receive $0.066 per share, which is 2.75 times higher than the last closing price of Combest’s shares before suspension.

The settlement follows an investigation by the SFC commenced in July 2018 which revealed serious concerns about the operations of Combest and the conduct and integrity of its management. To protect the interest of the investing public, the SFC directed The Stock Exchange of Hong Kong Limited (SEHK) to suspend the trading of Combest’s shares on 29 May 2019. Prior to the suspension, Combest shares were last traded at $0.024 per share, with 75.6% of its shares being held by independent public shareholders. On 18 May 2020, the SFC commenced legal proceedings against the respondents. Combest’s shares were delisted by SEHK on 24 December 2020.

Further, as part of the settlement, the SFC and the respondents have agreed to a statement of facts, which includes:

• Ng was a shadow director of Combest since 2016, and Liu and Lee who were the only executive directors at the material time, followed Ng’s directions and instructions to operate Combest’s affairs.
• Ng, Liu and Lee caused Combest to enter into acquisitions of two subsidiary groups in 2016 and 2017. Both acquisitions were substantially overvalued by a total of $229 million. The acquisitions enabled Ng to siphon money off from Combest to benefit himself and create the false impression that Combest had a substantial level of operations and assets to warrant the continued listing of its securities.
• The two acquired subsidiary groups were comprised of fictitious or artificial businesses procured by Ng.
• Ng, Liu and Lee also caused Combest to borrow loans and make payments of fees and interests of about $64 million for no commercial reasons.
• Ng, Liu and Lee artificially inflated the revenue of Combest during various accounting periods between 2016 and 2019 and caused Combest to suffer a total loss of over $293 million.
• By reason of the above, Ng, Liu and Lee breached their fiduciary duties owed to Combest.

“The settlement is the first of its kind that will benefit directly minority shareholders of Combest from the compensation paid by the wrongdoers,” said Ms Julia Leung, Chief Executive Officer of the SFC. “We have endeavoured to keep the market clean, seek justice for the minority shareholders and make wrongdoers pay.”

The Court is scheduled to hear the parties’ proposals for the settlement and submissions on the statement of facts on 2 April 2025. Updated information relating to the Court’s decision including the decision on the compensation and the distribution of special dividends will be released in due course. The SFC reminds shareholders and the investing public to exercise caution when dealing in the shares of Combest.

中文版本

證監會達成首宗同類和解使康佰控股有限公司公眾股東獲得賠償

證券及期貨事務監察委員會（證監會）與涉事各方達成和解，透過簡易程序解決在香港高等法院針對他們的法律程序。三名答辯人同意向康佰控股有限公司（康佰）支付約1.92億元的賠償，以分發予該已除牌公司的獨立公眾股東。

該三名答辯人是吳國輝（男）、廖天立（男）及李敏滔（男）。和解建議須經法院批准後方可作實。法院已定於2025年4月2日就各方的和解建議進行聆訊。如獲批准，這將成為已除牌公司以特別股息的方式向獨立少數股東支付的歷來最高賠償額。

作為和解的一部分，待法院批准後，該三名答辯人將向康佰支付約1.92億元的賠償。康佰同意以特別股息的方式向其股東分發全部賠償額。此外，合共持有24.4%康佰股份的兩名股東承諾交回其有權收取的特別股息，以重新分發給獨立公眾股東。如果法院批准和解方案，獨立公眾股東將收取每股0.066元，較康佰於暫停股份買賣前的最後收市價高2.75倍。

是次和解源於證監會在2018年7月展開的調查，當中發現康佰的營運及其管理層的行為和誠信存在令人嚴重關注的情況。為保障投資大眾的利益，證監會於2019年5月29日指示香港聯合交易所有限公司（聯交所）暫停康佰股份的買賣。在暫停股份買賣前，康佰股份的最後成交價為每股0.024元，其中75.6%的股份由獨立公眾股東持有。2020年5月18日，證監會對該等答辯人展開法律程序。康佰股份在2020年12月24日被聯交所除牌。

此外，作為和解的一部分，證監會與該等答辯人已就一份事實陳述書達成協議，當中包括：

• 吳自2016年起曾為康佰的幕後董事，而在關鍵時間的執行董事只有廖及李二人，他們遵循吳的指令和指示來經營康佰的事務。
• 吳、廖及李致使康佰於2016年和2017年訂立收購兩個附屬公司集團的交易。兩宗收購的定價被大幅地推高了合共2.29億元。該等收購使吳能夠挪用康佰的資金以從中獲得私利，並造成虛假的印象，令人以為康佰擁有大量業務及資產，繼而成為其證券可繼續上市的理由。
• 兩個被收購的附屬公司集團由吳所促致的虛構或虛假業務組成。
• 吳、廖及李亦致使康佰在沒有商業理由的情況下借貸，並支付約6,400萬元的費用和利息。
• 吳、廖及李虛假地誇大了康佰在2016年至2019年的多個會計期間的收益，並致使康佰蒙受合共超過2.93億元的損失。
• 基於上述理由，吳、廖及李違反了他們對康佰負有的受信責任。

證監會行政總裁梁鳳儀女士表示：“這是此類和解的首例，使康佰少數股東能夠直接從不法分子支付的賠償金額受惠。我們一直竭力維持市場的公義秩序，為少數股東討回公道，並使違法者付出代價。”

法院已定於2025年4月2日進行聆訊，以聽取各方的和解建議及就事實陳述書作出的陳詞。有關法院裁決的最新消息，包括賠償及特別股息分發的裁決，將會適時發布。證監會提醒股東及投資大眾於買賣康佰的股份時應審慎行事。