Did Madam Ngan file her shareholding disclosures 18 years too late?

Dear Members of the Board of China Motor Bus Company, Limited (“CMB”),

Madam Ngan filed five shareholding disclosures on June 5, 2018 (the “Shareholding Disclosures”).  There may be some issues relating to the Shareholding Disclosures which we would like to bring to your attention.

For example, the “date of relevant event” of the following disclosure is November 22, 2000, which is the date on which CMB bought back shares and Madam Ngan’s shareholding percentage increased as a result.  It appears that Madam Ngan filed her disclosure 18 years after the “relevant event”:


It also appears that four of the Shareholding Disclosures were filed in amendment of earlier disclosures filed on February 7, 2018, August 8, 2003 and June 2, 2003 (the “Earlier Disclosures”). The Earlier Disclosures appear to have been improperly filed in relation to Madam Ngan’s failure to disclose the shareholding of her spouse, Mr. Fritz Helmreich who also happens to be a director of CMB.

  • Did Madam Ngan file and amend her disclosures too late?  If so, please state the reason(s) for such? Are there any legal consequences because of this?
  • Did Madam Ngan intentionally violate the Securities and Futures Ordinance (“SFO”), only to rectify her wrongdoings (if any) after Mingpao reported certain suspicious undisclosed shareholdings of the Ngan family in January 2018?
  • Does Madam Ngan need to report herself to the Securities and Futures Commission (“SFC”), if there are indeed any violations?
  • Has the Board properly discharged its fiduciary duties to ascertain whether Madam Ngan is fit and proper to serve as a director?
  • Is the Board satisfied that there are no more required disclosures of any material information? From our understanding of disclosure regulations, Mr. Fritz Helmreich, a director and the husband of Madam Ngan, is required to make a disclosure of his shareholdings in the CMB.  Has the Board properly investigated any possible breach of disclosure requirements by its fellow Board members?
  • What about the related party transactions such as (i) Madam Ngan’s possible use of CMB property without due consideration and (ii) possible Ngan’s family use of CMB resources for non-CMB related purposes?  Are proper actions being taken to address these serious conflicts of interest issues?

Madam Ngan, who is a practicing lawyer, should be well familiar with the serious consequences of violating disclosure requirements.  In 2002, Mr. Chan Kwan Shat and his wife, who were substantial shareholders of CMB, were prosecuted by the SFC for failing to disclose their shareholding in CMB.  They were subsequently fined HK$ 60,000 by the Western Magistracy.

Kindly contact me at +852 9835 4836 any time at your convenience.  Again, we earnestly request you for an opportunity to meet.

Yours sincerely,

Kin Chan

Argyle Street Management Limited


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