Action Against Exchange Member Tim Po Securities Co Ltd

Regulatory

07 Oct 1999

The Stock Exchange of Hong Kong announces that on September 10 and 15, 1999, the Disciplinary Committee heard the case of Tim Po Securities Co Ltd ("TPSCL"), a Member of the Exchange, and found two charges preferred against TPSCL for breach of the Rules of the Exchange proved.

The substance of the charges was that:-

(1)

TPSCL had the following internal control weakness during the period May 1995 to February 1996:-

(i)	TPSCL's dealing staff had executed a client's orders placed by another client and relayed the executed order to her without actual authorisation and verification from that client;
(ii)	contract notes of the client were given to that another client but not to the client;
(iii)	statements of accounts were not mailed to the client;
(iv)	TPSCL, without checking who had actually deposited money into its bank account, had taken that another client's word as to which account the deposit was made for; some money deposited by client were used in that another client's or that another client’s son's trading account;
(v)	no evidence of control to ensure that the securities position of clients had been checked before delivering the securities to clients; and
(vi)	no evidence of control on input of CCASS instructions by accounting staff.

(2)

TPSCL had the following change in shareholding, increase in authorised share capital and allotment of shares without the prior written approval of the Exchange:-

(i)	the two shareholders of TPSCL who respectively held 51% and 49% shareholdings of TPSCL, had transferred their entire shareholdings in TPSCL to a corporation on January 8,1996 without the prior written approval of the Exchange;
(ii)	the authorised share capital of TPSCL was increased from HK$5,000,000 divided into 50,000 ordinary shares of HK$100 each to HK$20,000,000 divided into 200,000 ordinary shares of HK$100 each on February 1, 1996 without the prior written approval of the Exchange; and
(iii)	30,000 ordinary shares of TPSCL was alloted to that corporation on February 1, 1996 without the prior written approval of the Exchange.

The Disciplinary Committee, having considered all the information before it including the penalties imposed in previous cases and TPSCL's representation, resolved that a penalty of public censure plus a fine of HK$120,000 be imposed on TPSCL.

Corporate Communications Department

Updated 07 Oct 1999