Martin Kwan (PCLL)
Hong Kong Law Journal, Volume 48, Part 3, pp. 883-898
published in December 2018
Abstract: Section 214 of the Securities and Futures Ordinance is commonly deployed by the Securities and Futures Commission (SFC) to deal with misconduct within listed companies. A usual remedy sought by the SFC is disqualification orders against the misbehaved directors. However, there isn't an express provision regarding the limitation period for s 214. This article explores the vital questions on whether there is and whether there should be a limitation period, especially given its complicated nature of being in effect a combination of an unfair prejudice petition and a director disqualification petition. The courts have recognised unfair prejudice actions as burdensome and disqualification orders as being drastic in interfering with the rights of directors. Furthermore, s 214 has wide policy implications concerning the financial markets. It is submitted that there are three equally tenable but conflicting views regarding the applicable limitation period. Therefore, there is a pressing need for full consideration and reform.