A Hong Kong court has granted a request by the city’s securities watch to freeze the assets of Huang Guangyu, founder of Chinese retailer GOME Electrical Appliance, over alleged securities violations.

The order, granted by the High Court in Hong Kong, will prevent Huang, his wife Du Juan and two holding companies from selling or trading in US$214.1 million of the company’s shares. The SFC application alleges that Mr Huang and the named associates contravened Hong Kong securities laws.

It represents the largest sum of assets that Hong Kong’s SFC has ever applied to the court to have frozen.

The alleged violations took place between January and February last year, when Huang, who is also known as Wong Kwong-yu, and his wife organised a share repurchase for his former company. The two allegedly took part in the scheme in order to use the company’s funds to sell share they held. In turn, the proceeds were used to repay a HK$2.4 billion personal loan that the couple had taken out.

Arguing that the share repurchase had a negative impact on GOME’s finances, the SFC said that the couple acted in a way which was not in the best interests of the company and its shareholders. The share repurchase scheme, on the other hand, provided a demand for the shares owned by the two, and stabilised its share price. This allowed Mr Huang to earn more from the sale, the SFC said.

In total, the SFC estimated that this caused a loss of about HK$1.6 billion to GOME and its shareholders.

The regulator is seeking for unspecified damages to be paid to GOME.

Huang, who used to serve as GOME’s chairman, resigned in January. His wife Du also resigned as executive director in December.

According to a report in the Wall Street Journal, GOME has declined to comment. Huang and his wife have been detained by Chinese authorities earlier and remains in their custody. They were not able to be reached for comment.

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A Californian valve manufacturing company has pleaded guilty to bribing foreign official and employees of private companies more than 200 times and in over 30 countries.

Control Components, based in Santa Margarita, pleaded guilty to violating the US Foreign Corrupt Practices Act, and the Travel Act by making bribes to people around the world, from China, Korea, Malaysia, to the United Arab Emirates. This was done in order to secure contracts in the respective countries.

In a case in which the US Department of Justice (DoJ) has been viewed as being aggressive in going after the individuals responsible for the wrongdoing, by pleading guilty the company effectively admitted that it made around 236 corrupt payments in approximately 36 countries between 2003, and 2007. This resulted in net profit of US$46.5 million.

In sentencing the company, US District Judge James Seina ordered the company to pay a US$18.2 million fine. The company will also be required to create and maintain an anti-bribery compliance programme, retain an independent compliance monitor for three years to oversee the new anti-bribery measures. Control Components was also placed on organisational probation for three years, and will be required to continue to cooperate with the DoJ in related investigations.

According to the DoJ, the company paid approximately US$6.85 million in bribes between 2003 and 2007 to foreign government officials, and employees of state-owned and private companies. Some of the state-owned companies which received bribes include Jiangsu Nuclear Power (China), Guohua Electric Power (China), China Petroleum Materials and Equipment (China), PetroChina (China), Dongfang Electric (China) China National Offshore Oil (China), Korea Hydro and Nuclear Power (Korea), Petronas (Malaysia), and National Petroleum Construction Company (United Arab Emirates).

The DoJ’s case against Control Components has seen a total of eight executives being prosecuted. Two of them, Mario Covino, the company’s former director of worldwide factory sales, and Richard Morlok, a former finance director, have pleaded guilty, but await sentencing.

Meanwhile, trial is current scheduled for December for the six remaining executives charged, including former chief executive officer Stuart Carson, former director of sales for China and Taiwan Hong Carson, former director of worldwide sales Paul Cosgrove, former vice president of worldwide customer service David Edmonds, former vice president and head of sales for Europe, Africa, and the Middle East Flavio Ricotti, and former president of the company’s Korean branch Han Yong Kim.

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