Press Release



Insider Dealing Tribunal submitted report on CEHL


The Insider Dealing Tribunal has submitted to the Financial Secretary a report on its inquiry in relation to the listed securities of Chinese Estate Holdings Limited (CEHL).

Following is a summary of the Tribunal's report:





By notice dated 26 September 1998, the Financial Secretary required the Insider Dealing Tribunal to institute an inquiry in relation to the listed securities of Chinese Estates Holdings Limited (CEHL) to inquire into and determine -

(a) whether there has been insider dealing in relation to CEHL arising out of the dealings in the listed securities of the company by (or on behalf of) Messrs. Joseph LAU Luen-hung and Johnson LAM Yee-ming during the period from 19 November 1996 to 21 November 1996 (both days inclusive);

(b) in the event of there having been insider dealing as described in paragraph (a), the identity of each and every insider dealer; and

(c) the amount of any profit gained or loss avoided as a result of such insider dealing.

2. The Insider Dealing Tribunal has completed its inquiry and submitted a report to the Financial Secretary on 7 May 1999.

The Company


3. CEHL was incorporated in 1989 and was listed in the same year. Its principal business activities are investment holding, property investment and development, securities investment and money lending. Mr. Joseph LAU is the Chairman and substantial shareholder of CEHL, with most of his shares held through a British Virgin Islands company called Golden Game Overseas Ltd ("GGO").

Possible Insider Dealing


4. SFC instigated an investigation into certain dealings in CEHL shares and two warrants with CEHL as underlying stocks and identified that possible insider dealings might have taken place during the sale of Entertainment Building between late October and November 1996. It was alleged that the increase in CEHL's share price and the prices of the two covered warrants on them was a result of the concerned property sale and that Mr. Johnson Lam and Mr. Joseph Lau conducted insider dealings in possession of such information.



5. The Tribunal concluded in its report to the Financial Secretary that it could not be satisfied to a high degree of probability that the specific information of the sale of Entertainment Building would have been likely materially to affect the price of CEHL's shares nor it could be satisfied to the same high degree of probability the information if in the public domain was likely to have such effect. The Tribunal therefore made unanimous opinion that Mr. Johnson Lam was not identified as an insider dealer. It also made a majority conclusion that Mr. Joseph Lau had not conducted insider dealing.

6. It is emphasised in the report that "while the Tribunal had little difficulty in disposing of the allegations made against Mr. Johnson Lam, it faced a far more onerous and less clear-cut task in respect of Mr. Joseph Lau. The majority decisions reflect this fact."

End/Friday, May 12, 1999