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Press //
Submitted by // C C Tan, Partner
12 December 2017


Howse Williams Bowers ("HWB"), a leading Hong Kong independent law firm, acted as the legal adviser to the sole sponsor, the joint global coordinators, joint bookrunners, joint lead managers and the underwriters in relation to the approximately HK$114 million share offer and dual listing of Centurion Corporation Limited (SEHK Stock Code: 6090; SGX-ST Stock Code: OU8) ("Centurion") on the Main Board of the Stock Exchange of Hong Kong. VBG Capital Limited acted as the sole sponsor while UOB Kay Hian (Hong Kong) Limited, Pacific Foundation Securities Limited and VBG Capital Limited acted as the joint global coordinators, joint bookrunners, joint lead managers and the underwriters. The shares commenced trading on the Main Board of the Hong Kong Stock Exchange on 12 December 2017.

Centurion, also listed on the Main Board of the Singapore Exchange Securities Trading Limited, is one of Singapore’s largest workers and student accommodation owner-operators. They develop, own and/or manage a strong portfolio of 21 operational accommodation assets totalling approximately 61,600 beds in Singapore, Malaysia, Australia and the United Kingdom under the "Westlite" and "dwell" brands. Centurion ranked first among the purpose built workers accommodation service providers in Singapore and Malaysia in 2016 in terms of revenue receipts with a market share of approximately 11.0% and 50.0%, respectively. Upon listing on the Hong Kong Stock Exchange, Centurion will have a market capitalisation of approximately HK$2.7 billion.

The HWB team, led by partner Chia Ching Tan, had lead responsibility in the drafting of prospectus, verification, corporate and regulatory issues and general transaction management.


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; intellectual property; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

 
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Submitted by // C C Tan, Partner
08 December 2017


Howse Williams Bowers ("HWB"), a leading Hong Kong independent law firm, acted as the legal adviser to Icicle Group Holdings Limited (Stock Code: 8429) ("Icicle Group") in relation to its approximately HK$66 million share offer and listing on the Growth Enterprise Market of the Stock Exchange. Success New Spring Capital Limited acted as the sole sponsor. The shares commenced trading on the Growth Enterprise Market of the Hong Kong Stock Exchange on 8 December 2017.

Icicle Group is a marketing production company headquartered in Hong Kong with a focus on printing, packaging and sourcing, with over 18 years of experience. They design, create and produce marketing and branding materials in Hong Kong and the PRC to clients who are international and local brand owners, including global financial institutions, luxury brand retailers and local retail chain stores.

The HWB team, led by partner Chia Ching Tan, had lead responsibility in the drafting of the prospectus, reorganisation, legal documentation, corporate and regulatory issues and general transaction management.


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; intellectual property; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

 
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Submitted by // K Bowers, Partner / Solicitor Advocate; P Yeung, Senior Associate
07 December 2017

 

ALL I WANT FOR CHRISTMAS IS…MY JOB BACK!

The office Christmas party is a highly spirited event, and a great opportunity for staff at all levels to mingle and have fun, but both employers and employees should bear in mind that the office Christmas party is primarily a professional workplace event. 

With daily salacious and sensational news stories about inappropriate conduct and behaviour in the workplace attracting world-wide public and media attention, and leading to inevitable and irreparable reputational damage to both individuals and companies alike, this seasonal Alert sets out our 'top tips' for ensuring a trouble-free office Christmas party.

Tis the Season to be Jolly (within limits)

Yes, do have a few drinks. Although at most work Christmas parties, alcohol is free-flow (and often good quality), this is an offer, not a challenge.

An office Christmas party is primarily a professional workplace event. Moaning about office systems, or complaining about your boss (to your boss!) is behaviour that will not be forgotten at the office the next day.

That said, employers should be wary about the consequences of providing free-flow alcohol at work functions. In a recent case in the UK, the Fair Work Commission emphasised that employers cannot hold their employees to the same standard of conduct at work functions where the employer provides unlimited alcohol. This has consequences for the contentious issue of when an employee's intoxicated conduct at a work function will justify dismissal. Employers should therefore carefully consider how alcohol is served at work functions.

Prior to the Christmas party, employers should clearly distinguish between official work functions (the Christmas party itself) and other functions (the -often infamous- "after party") which they consider will occur in a private social setting, so as to avoid liability for any after-hours shenanigans in Lan Kwai Fong or Soho.

I Saw Mummy Kissing Santa Claus

The office Christmas party is not the place for office romance. Be professional and don't cross any (personal or other) boundaries which you would not cross in the office.

Even at the office Christmas party, employers remain liable for acts of harassment, discrimination, assault or other unwanted conduct of their employees. If these types of allegations are made during or after the party, employers should follow their usual disciplinary process and properly investigate the complaint before any action is taken.

Consequently, mistletoe is best avoided…

Santa Claus is Comin' to Town

The office Christmas party is not the venue to conduct staff appraisals or to make promises in relation to Christmas bonuses or pay rises in the New Year. Even informal comments on staff performance may be misconstrued, and could eventually lead to unwanted and unintended disputes.

In one UK case, an employee claimed that his boss had indicated at the office Christmas party that he would receive a pay rise "in due course". After the Christmas party, the employee's salary stayed the same, and the employee soon resigned and filed a claim for constructive dismissal. Although the employer won the case, this was only because the nature of the promise was too vague.

Raunchy Mr/Mrs Claus

Check the dress code.

You don't want to be the person wearing jeans and a Bridget Jones' Christmas sweater when the rest of the room is in black-tie. Make sure you know the dress code by checking in advance what your colleagues are wearing, and follow suit.

If your office Christmas party is fancy dress, do not use this as an excuse to wear that Princess Leia bikini top or Chippendales costume you bought for Halloween.

Use your common sense!

I'll Be Home for Christmas…?

Employers should consider party logistics. If the party is during a weekday after work (which is usually the case), employers should arrange transport from the office to the party venue.

If possible, employers should also consider how employees will get home after the party. If alcohol is served, employers should be mindful about drink driving so it is a good idea to provide transport home at the end of the event. If this is difficult or impractical to arrange (as it invariably will be), employers should send out an email to all staff on good practice before the Christmas party so as to discourage drink driving.

#Have Yourself a Merry Little Christmas

Despite the festive atmosphere at the office Christmas party, Facebooking about your supervisor's very annoying overuse of an annoying phrase (for instance) may drop you in hot water, or could end up with you finding yourself with a mountain of paper-work as your surprise Christmas present. Either way, mixing social media with work (especially the office Christmas party) is a very, very bad idea.

Seeing as problems with social media in the workplace are becoming increasingly common, many staff handbooks should be updated to include a comprehensive policy on what is, and is not acceptable for employees to post online. Employers should make sure that the staff handbook is up-to-date and if possible, circulated (by way of a gentle reminder) to all employees shortly before the Christmas party.

Happy Hanukkah

Both employers and employees should be culturally sensitive, and respectful of employees who, for whatever reason, may not want to drink, and make sure that there are plenty of alcohol-free alternatives.

Christmas is a Christian holiday, so employers should be mindful of different ways of celebrating the holiday season.

O Holy Night

A hangover (and last night's acute embarrassment) are not good reasons for calling in sick. Employees calling in sick the morning after the office party may be considered guilty of an unauthorised absence.

That said, if the Christmas party is held on a weeknight, employers should not expect Christmas miracles the next morning. Employers should be clear about expectations at the office the next day, the extent to which lateness will or will not be allowed, and what disciplinary action will be taken if these expectations are not met.

The Grinch who Stole Christmas

Most importantly, go to the party!

Although the office Christmas party is usually an optional event, the reality is that no one likes a Grinch and not attending the office Christmas party will not present well to other colleagues.

With all that in mind, have a very merry (and responsibly PC) Christmas!


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; and financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

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Submitted by // K Bowers, Partner / Solicitor Advocate
28 November 2017


Court Considers Auditor's Duty to Report Transactions

Introduction 

In the recent case of Days Impex Ltd (in liquidation) & Anor v Fung, Yu & Co (a firm) & Anor [2017] HKCU 24981, the Court of First Instance considered the duty of an auditor to detect and report fraudulent activities in the course of performing auditing work. In rejecting the Defendants' application to strike out the action, the Court held that an auditor's duty is not only restricted to the provision of information and advice, but also includes detecting material irregularities in financial statements. Additionally, the Court commented on recent developments in relation to the defence of illegality and attribution, opening up the possibility of a full consideration by the Court at the trial.

Background

The Plaintiffs in this case were private Hong Kong companies (in liquidation). The Defendants were appointed as the auditors of the Plaintiff companies from 2005 to 2011. During this period, the Plaintiffs were defrauded by their director and principal shareholder through a number of fraudulent bank loans. The Plaintiffs' case was that the Defendants breached their duty of care by failing to detect the fraudulent transactions when performing auditing work for the Plaintiffs.

The Defendants disputed that they owed a duty of care to the Plaintiffs in relation to the fraudulent transactions and applied to strike out the action. In hearing the application, the Court considered:-

1. whether the scope of the duty of care owed by the auditor includes the detection of fraud; and

2. whether the Defendants can rely on the defence of illegality and attribution.

Scope of the Auditor's Duty of Care

In considering the scope of the Defendants' duty of care, the Court rejected the argument that the Defendants' duty is restricted only to the provision of information and advice. Instead, the Court held that Defendants' duty as auditors may extend to detecting material irregularities in the accounting statements.

In reaching this finding, the Court cited the English case of Barings v Coopers & Lybrand2 which says that an auditor's task includes detecting material misstatements in financial documents. The Court also referred to the case of Sasea Finance Ltd v KPMG3 which says that an auditor's duty may extend to reporting instances of fraud detected during the course of working for a client. From these cases, the Court concluded it was highly arguable that an auditor's duty is more than the provision of information and advice, and that it may extend to reporting suspicion of fraud to management, or even to relevant authorities.

Defence of Illegality and the Issue of Attribution

Significantly, the Defendants also raised the defence of illegality in applying to strike out the action. The defence of illegality prevents a claimant from pursuing a civil claim if the claim arises in connection with an illegal act by the claimant. On this point, the Court commented that the recent English case of Patel v Mirza4 ("Patel") in the Supreme Court (UK) substantially reformulated the law in this area. Consequently, the Court required an examination of the facts of the case before it could determine the issue of illegality.

A further complication is that in order for the Defendants to rely on the defence of illegality, the fraud perpetrated by the director and principle shareholder would need to be attributed to the Plaintiffs. In relation to this, the Defendants cited the case of Stone & Rolls Ltd v Moore Stephens5 ("Stone & Rolls"), which the Court in this case commented as being highly controversial, and that it was unclear whether the facts of this case could be distinguished from the case of Moulin Global Eyecare Trading Ltd (in liquidation) v The Commissioner of Inland Revenue6 ("Moulin"), where the Court of Final Appeal was critical of Stone & Rolls. Accordingly, the Court concluded that the current case was not suitable for striking out, as a closer examination of the facts is required.

Comment 

The Court in this case held that an auditor's duty of care should extend beyond the provision of information and advice, and may include the detection of material irregularities in a company's finances. Where an auditor suspects fraud in the client company, an auditor may also have a duty to report the fraud to management or to the relevant authorities. However, as this case is still at an interlocutory stage, further consideration by the Court will be required to clarify the scope of this duty.

This case is also significant for its discussion on the defence of illegality and the principle of attribution. As both points were left open by the Court for consideration at a full trial, it will be important to see how the Court treats the Patel case in relation to the defence of illegality, and whether the facts of this case can be distinguished from Moulin in relation to the issue of attribution.

The ultimate outcome of this significant case should help to clarify some important questions relating to the scope of an auditor's duty of care, the defence of illegality and the principle of attribution. Interested parties should keep an eye on the development of this case as it proceeds through the Courts.


1. Unreported, High Court Action No 348 of 1996 (Court of First Instance, 24 October 2017)
2. [2002] 2 BCLC 410
3. [2000] 1 All ER 676
4. [2016] 3 WLR 399
5. [2009] 1 AC 1391
6. (2014) 17 HKCFAR 218


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

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