Failure to attend an interview under s.183(1)(c) of the Securities and Futures Ordinance (Cap. 571) (the “SFO”) may attract serious consequences. The criminal punishment of fine and imprisonment (up to $200,000 and 1 year) is not the end of the matter. The offender may also be committed to prison for civil contempt of a court order compelling him to attend an interview, until he finally complies with the order, and pay substantial legal costs thereof.

Obligation to Attend an Interview by the Securities and Futures Commission (SFC)

Under the SFO, the SFC has power to investigate market misconducts (s.182).The person under investigation or a person who can assist the investigation is under an obligation to attend an interview with the investigator (s.183(1)(c)) upon receiving notice from the SFC.

Re Chan Chin Yuen (HCMP 1155/2007).

In this case, Mr. Chan Chin Yuen was obliged to attend an interview to assist investigation of possible acts of false trading, price rigging and stock market manipulation relating to the shares of Asia Standard Hotel Group Ltd.He had previously disobeyed a Notice issued by the SFC requiring him to attend the interview. Reyes J granted an order compelling him to attend another scheduled interview.The Order was endorsed with a penal notice warning that failure to attend would render him liable to imprisonment.

After unsuccessful attempts to contact Mr. Chan by post and by phone and to serve him personally with the Order at his residential and business addresses, Master Roy Yu upheld the SFC’s application to dispense with personal service of the Order.Personal service was substituted by sending the Order by post to Mr. Chan’s residential and business addresses and inserting a letter containing the Order in the mailboxes of the addresses.However, he did not attend the second scheduled interview and in fact he left Hong Kong again.The SFC then applied to commit Mr. Chan to prison for contempt in disobeying the Order.

Reyes J found it reasonable to infer from all the facts that Mr. Chan was fully aware of the interview and committal proceedings, yet he sought instead to evade service and thereby avoid compliance with his obligation to attend an interview with the SFC.Given Mr. Chan’s wilful obstinacy, he was committed to prison for his contempt until he attended the interview.He was also ordered to pay the costs of the proceedings on an indemnity basis.