TO THE BUSINESS EDITOR
FOR IMMEDIATE RELEASE

28 April 1999

The Securities and Futures Commission ("SFC") and Hong Kong Futures Exchange Limited ("HKFE") jointly announce today that they have taken action against Hon Hing Futures Limited ("HHFL"), a registered Commodity Dealer and a Member of HKFE, and against its registered dealer, Mr. Yau Pui Kee, Joseph ("Mr. Yau") and its director Mr. Wong Man Kee, Danny ("Mr. Wong").

The action arose from an inquiry covering the period July 1996 to October 1996 ("the relevant period") in which it was found that facilities were provided by HHFL to facilitate leveraged foreign exchange trading by a number of employees of HHFL with a related company of HHFL in Macau in contravention of the licensing requirements of the Leveraged Foreign Exchange Trading Ordinance ("LFETO").

Mr. Yau, who was responsible for the commodities trading business of HHFL, had delegated the day to day operation and management to Mr. Wong. He was negligent in carrying out his responsibilities as a registered commodity dealer by allowing employees of HHFL to carry out activities in contravention of the licensing requirements of LFETO.

Mr. Wong was a director of HHFL having the day to day operation and management responsibilities of HHFL. He bore responsibilities for leveraged foreign exchange trading activities by employees of HHFL with the related Macau company in contravention of the licensing requirements of the LFETO. Further he personally solicited clients to conduct leveraged foreign exchange trading with the related Macau company contrary to the provisions of the LFETO.

As a result of the above findings, the SFC has decided to publicly reprimand HHFL, Mr. Yau and Mr. Wong. In addition, HKFE has decided to publicly censure HHFL.

In deciding on this course of action, the SFC and HKFE took into account that:

• Mr. Yau will voluntarily surrender his registration as a Commodity Dealer and will resign as a director on 30 April 1999.
• Mr. Wong will resign as a director of HHFL on 30 April 1999.
• HHFL has appointed an independent dealing director, acceptable to the SFC and HKFE to be responsible for the day to day operation and management of its business.
• HHFL has engaged an independent firm of accountants to perform a review of its internal control procedures and to report its findings to HKFE and has agreed to implement any recommendations made in the accountants' report to the satisfaction of HKFE.

For further information, please contact Suzanne Ho of SFC at 2840-9470 or Narcissus Chiu of HKFE at 2842-9322.

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