$70M of SMI funds are misappropriated, says SFC

Anita Leung Fung-yee, the founder of Qin Jia Yuan Publishing, the predecessor of SMI Culture & Travel (2366), and her husband Philip Wong Yu-hong are involved in misappropriation of company funds worth over HK$70 million, according to a writ issued by the Securities and Futures Commission in Hong Kong's High Court.

The couple were alleged to have established more than 10 British Virgin Islands-registered companies in the names of 21 related persons during 2010 and 2012 and raising the purchase prices of 176 TV series from the companies to a total of HK$372 million, the Sing Tao Daily reported,

The suspected transactions were made during October 2010 and March 2012 through Jaco Resources, a wholly-controlled subsidiary of Progressive Chic Development under Qin Jia Yuan.

The shareholders, directors or authorized signatories were found to be relatives, friends, or staff of the couple, according to the report.

The SFC said the transactions were illegal, and all contracted companies and signatories were nominated by Leung to conceal the fraud, and she may have pushed up the total price by as much as HK$74.27 million.

Leung was previously a novelist, and Wong was a former member of the Legislative Council and is currently the director of five entities.

Shares of SMI steadied at HK$0.083 yesterday.