Investigator To Probe Next Digital

(To watch the full media session with sign language interpretation, click here.)

The Government today announced the appointment of an inspector to investigate the affairs of Next Digital (NDL) under the Companies Ordinance.

Financial Secretary Paul Chan told the media that he made the appointment pursuant to the power conferred under section 841(2) and (3) of the ordinance.

Mr Chan noted that he had appointed Clement Chan as the inspector after reviewing the facts and circumstances in relation to the company's affairs and all other available information.

He said: “It appears to me that there are circumstances suggesting the existence of the state of affairs referred to in section 841(2) of the ordinance in relation to NDL, including, among others, that NDL has been run in a manner unfairly prejudicial to the interests of its shareholders and creditors; that the officers of NDL have used the listed company to conduct unlawful activities and have themselves (been) involved in various alleged fraud offences and misconduct closely associated with the affairs of NDL; that the officers of NDL have breached their fiduciary duties and failed to observe proper standards of care in the performance of their duties; and that the governance of the company has seriously fallen short of that expected of a listed company.”

The finance chief added that the alleged criminal offences of the company's senior officers are of particular concern.

“All the circumstances give rise to grave concerns on whether there was serious mismanagement on the part of NDL, in particular the involvement of its officers in the alleged criminal offences and/or misconduct, the officers' failure in their duty to prevent this from happening, and whether the officers of NDL had taken reasonable and adequate steps to protect the interests of its shareholders and creditors.”

Mr Chan noted that the events relating to NDL that are of special concern include the charges laid against its senior officers and three subsidiaries in end-2020 and mid-2021 for serious offences under the National Security Law.

This raises the question of whether the affairs of NDL had been conducted by its officers in pursuit of their personal interests to the detriment of the public shareholders, he added.

The Financial Secretary also pointed out that it was in the public interest to invoke the relevant statutory power to appoint an inspector to probe the company's affairs.