Vantage FX’s parent firm Efinium’s Director is under the spot light with Hong Kong regulators on allegations of stock rigging.
Duncan Tak Keung Chui is alleged to have conspired to pump up the price of a Hong Kong-listed company in the days before a capital raising in January 2009.
Mr Chui became a director of Enfinium in May after the private equity group he heads, China Private Equity Investment Holdings, bought a 30 per cent stake in the forex trader for $US6 million in shares.
His run-in with Hong Kong’s Market Misconduct Tribunal is unrelated to action taken against Enfinium earlier this month by US regulator the Commodity Futures Trading Commission.
The CFTC alleges Enfinium and its subsidiary Vantage FX, which offer internet trading in highly leveraged foreign exchange contracts to retail and wholesale customers, operate without US registration. Enfinium says it does not need US registration because it does not accept US customers.
Hong Kong Financial Secretary John Tsang, who is responsible for financial regulation as a member of the Chinese Special Administrative Region’s executive council, wrote to the Market Misconduct Tribunal in April outlining his allegations against Mr Chui. In a statement to the Stock Exchange of Hong Kong, Sino Katalytics, now known as Capital VC, said the tribunal’s hearings are due to start on October 19.
Mr Tsang alleged Mr Chui and Peter Yau Chung Hong ramped up the share price of Sino Katalytics Investment Corporation, where they were both executive directors, by 31 per cent on January 9, 2009. Mr Yau was responsible for 89 per cent of that day’s sales in the stock, while Mr Chui was responsible for 62 per cent of purchases, Mr Tsang alleged.
”Chui and Yau were in frequent telephone contact on January 9, 2009, and their transactions during the 20 minutes prior to the market close had the appearance of being co-ordinated.”
In interviews with Hong Kong’s Securities and Futures Commission, both men ”denied working with each other … to push up the company’s share price”, Mr Tsang said.
Mr Chui’s China Private Equity bought its stake in Enfinium from British Virgin Islands-registered Furuya Consultants.
Hong Kong company documents show Furuya assumed complete control of Enfinium’s Hong Kong-registered owner, Enfinium International Holdings, last year by buying the half it did not already own from Hong Kong company Zetland Nominees. Zetland Nominees’ sole human director is Hong Kong-based accountant James Campbell Sutherland, a former associate of a central figure in collapsed super fund Trio Capital, Jack Flader.
Through another Hong Kong company, Transworld Investments, Zetland was also the owner of Vantage FX until Enfinium took it over in August last year.
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