Three people, including a former manager of Hong Kong’s securities watchdog, were charged with conspiring to commit misconduct for allegedly sharing non-public information on a planned rights issue and profiting from it.
Kenneth Leung, 30, who was employed as a manager of the Securities and Futures Commission’s investment products division; and Lai Lit-wai, 34, a Hospital Authority nurse, face one count of conspiracy to commit misconduct in public office, according to a statement from the city’s Independent Commission Against Corruption late Friday.
Leung and Cheung Tsz-kin, 35, a senior government counsel at the Department of Justice, jointly face another count on the same charge, it said.
All three were released on bail, pending a court appearance on Saturday.
Leung is alleged to have acquired confidential stock price sensitive information between Jan 30 and Feb 15, 2023, in relation to a Link REIT rights issue, and secretly shared it with the other accused.
Lai and Cheung allegedly used the information to buy and sell put options, with profits totaling more than HK$11 million ($1.89 million), and subsequently shared part of the gains with Leung.
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Link REIT, one of Asia’s largest real estate investment trusts, planned a HK$19.3 billion rights offering in February last year to bankroll expansions. Shares tumbled the most since 2008 in the trading day that followed the announcement of the plan.
The SFC referred the case to the anti-corruption body after an internal investigation revealed Leung’s suspected misconduct, according to the statement. The securities regulator said in a separate statement that its investigation found that the former employee acted alone in the organisation but collaborated with two external individuals.
The SFC is scrutinising potential violations under the securities and futures ordinance, it said.
