Organization

Ms Tsang Ching Yi is suspected to have tipped off Barry Kwok Sze Lok about the impending privatisation of I.T in 2021, learned from her work at an unnamed investment bank, netting a profit of HK$4.1m. We note that a person of her name was briefly licensed at Morgan Stanley Asia Ltd in 2005 and may have continued to work there. That firm was the Financial Adviser to the offeror in the privatisation.

According to the Restriction Notice, the client of Bright Smart Securities is suspected of dealing on inside information obtained from a person connected to an unnamed listed corporation.

The stock last traded in 2015 and was delisted on 11-Jun-2020. The MMT notice is dated 19-Jun-2020 but was not announced until now.

The firm jointly sponsored Tianhe Chemicals (1619) in 2014, with UBS and Merrill Lynch. Notably this announcement doesn't mention any human at MS as being responsible - perhaps that will follow later.

Note: the IPO actually had 3 sponsors: Morgan Stanley, UBS and BofA Merrill Lynch.

This is the first restoration order for insider dealing. We question the fairness of the allocation though. 297 sellers whose orders just happened to be matched with his, during an 11-week period in which he bought 26.7m shares, will get about $0.90 per share - even though some of them may have been net buyers during the period. The whole market was unaware of the good news, and anyone who sold shares during that period, when volume was 1844m shares, but not to Mr Du, gets nothing. That turns the payout into a lottery with about a 1 in 69 chance of success.

The other bank was UBS AG.