The chairman of China Metal Recycling Holdings Ltd., the company that Hong Kong’s securities regulator accused of fabricating sales, said he’s never done anything unlawful.
“I have never broken the law, nor have my company’s management,” Chun Chi Wai said today outside a courthouse in the city. A petition to wind-up the company “is not in line with the best interest of the public, lacking a fair and just reason,” he said.
The Securities and Futures Commission won a court order in July to appoint provisional liquidators to the company, which called itself China’s biggest scrap-metal dealer. It’s the first time the regulator has asked a court to wind-up a company to protect investors, as it cracks down on accounting fraud by companies selling shares to the public.
Chun and his wholly-owned Wellrun Ltd., which said in July it’s the largest shareholder of China Metal, will be allowed to enter as respondents to the proceedings, judge Jonathan Harris said in a Hong Kong court today. He adjourned the proceedings to March 10.
Chun and Wellrun will file evidence opposing the wind-up proceedings, Alexander Lee, a solicitor representing the two parties, said today outside the court.
The wind-up petition “will have a significant impact to the company’s operations, and it may affect its profits, causing great losses to shareholders,” Chun said.
China Metal inflated the size of its business to gain a listing in Hong Kong in 2009, the SFC said July 29. The company falsified a majority of purchases from its three major suppliers from 2007 to 2009, it said.
The case is Securities and Futures Commission and China Metal Recycling, HCCW 210/2013, in Hong Kong’s Court of First Instance.