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Mia Castagnone

The Securities and Futures Commission (SFC) and Hong Kong’s stock exchange have taken disciplinary action against a Chinese gaming company and its former directors for misconduct that resulted in more than HK$660 million (US$85 million) in losses.
The former directors of FingerTango, a Guangzhou-based mobile video gaming company, face disciplinary actions for misconduct and breach of duty from the SFC and the exchange over the misuse of listing proceeds after the company went public in 2018.
Investigations conducted by the SFC and exchange found that the listing’s proceeds were put into a wealth-management product, which was not disclosed in a prospectus at the time.
The former directors also approved loans to external parties, a substantial portion of which went into default, resulting in losses for FingerTango and its subsidiaries of more than HK$660 million, they said.
The SFC is also seeking disqualification and compensation orders from the Court of First Instance (CFI) for the same alleged misconduct.
“Corporate directors, including independent non-executive directors, tasked with the governance of a corporation, have the obligation to oversee the activities of management and ensure that adequate internal control policies and procedures are established and operate effectively,” Christopher Wilson, the SFC’s executive director of enforcement, said in a statement.
“Adopting a lax policy which would relieve directors from overseeing important decisions is not an excuse to alleviate directors’ responsibility.”
The SFC first initiated legal action with the CFI in October 2023. It had found that at the time of the listing, eight former directors – including independent non-executive directors – had resolved to bypass board approval with regard to certain investment decisions.
Shortly after its listing in 2018, the SFC said, FingerTango used proceeds from its initial public offering to invest HK$450 million in a fund without telling the board.
The company partially redeemed the fund in December 2019 and then invested another HK$250 million in loan notes issued by a small private company. Later, the company incurred a loss of about HK$258.8 million, including accrued interest, from a default on the 2019 loan notes, the SFC said.
In addition, in May 2020 and March 2021, FingerTango and two of its subsidiaries entered into 20 loan agreements with 15 borrowers, for debt totalling more than HK$500 million.
FingerTango subsequently suffered an impairment loss of around HK$424 million, with over 80 per cent of the 2020 and 2021 loans in default.
The directors’ misconduct included failure to carry out proper procedures and due diligence before entering into the loan agreements, the SFC said.
The SFC alleges that the losses from the 2019 loan notes and 2020 and 2021 loans were attributable to duty breaches by the former directors: Liu Jie, who was CEO and chairman, Wang Zaicheng, Liu Zhangxi, Zhu Yanbin, Guo Jingdou and Yao Minru.
The SFC said the former directors are liable to compensate the company and its subsidiaries for the incurred losses.
Liu Jie stepped down from his position in mid-December. A week ago, the company appointed a new chairman, Chan Man-fung, and Li Nini is the new CEO.


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SFC, exchange say actions by company and directors resulted in losses of US$85 million


SFC, exchange say actions by company and directors resulted in losses of US$85 million.


Mobile gaming

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SFC, Hong Kong stock exchange take action against FingerTango, a Chinese gaming firm

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}SFC, exchange say actions by company and directors resulted in losses of US$85 million

SFC, exchange say actions by company and directors resulted in losses of US$85 million