The Securities and Futures Commission said on Thursday that it has commenced proceedings in the Market Misconduct Tribunal against three top executives of Taste•Gourmet (8371) and five of their relatives, employees and close associates over an alleged scheme to manipulate the company's share price in support of its proposed transfer of listing from GEM to the main board of The Stock Exchange of Hong Kong.
The action involves Wong Ngai-shan, chairman and co-founder, Chan Wai-chun, chief executive officer and co-founder, and Yu Man-to Gerald Maximillian, chief financial officer at the material time.
The SFC noted that Wong, Chan and Yu directed or coordinated trading by the five other persons who allegedly traded in Taste•Gourmet shares themselves or through another person to artificially increase and maintain its share price at around HK$1.32 between June 1 and September 18 in 2020, aiming to meet the HK$500 million market capitalisation requirement for a transfer to the main board.
The SFC alleged that the trading of the company's shares exhibited hallmarks of price manipulation, including aggressive buy orders placed near market close and orders that moved or determined the closing price.
During the period, the company saw its share price soar 86 percent from HK$0.73 to HK$1.36, of which these trades accounted for six days of all daily trading in the company's shares, it added.
The SFC further alleged that communications among Wong, Chan, Yu and the five other persons included discussions about the target share price and when and how orders should be placed, along with substantial transfers of funds that were used shortly afterwards to purchase Taste•Gourmet shares.
The company announced that it had submitted a formal application to transfer its listing to the main board on August 5, 2020, with its shares closing at HK$1.35 on that day, while the proposed transfer did not proceed as envisaged.
