SBF’s Multi-Million Dollar Jets Set for Forfeiture

The Securities and Futures Commission’s (SFC) Joint Serious Fraud Office (JSFO) has taken steps to forfeit two multi-million dollar corporate jets it alleges were obtained through criminal proceeds.

The aircraft, which are allegedly owned by Sino-Forest Corporation, are currently operated by Sino-Ocean Capital Holdings Limited, a China-based holding company which is controlled by Sino-Forest’s former CEO and Chairman, Albert Yeung Sau Shing. The jets, estimated to be worth over US$33 million, were acquired with funds that the JSFO alleges may be linked to illegal activities or conduced in breach of securities laws.

The Commission is currently seeking court orders to have the aircraft sold and the proceeds from the sale to be returned to investors. The SFC is also looking into taking action against other assets believed to be connected to the illegal activities.

The jets have already been transferred for seizure and forfeiture proceedings to the SFC under the Companies Ordinance. The SFC sought an interim freezing order from the Court of First Instance on December 21 and this order was granted. The SFC will now seek to have a final freezing order obtained which will remain in place until the lenders are repaid.

The SFC is also set to draft an order to require Sino-Ocean and its related parties to pay all the outstanding debt against the jets. This order will then be submitted to the court with a request to have it granted.

The JSFO’s action is seen as a move to protect investors and the integrity of Hong Kong’s capital market. It follows the SFC’s enforcement action against Sino-Forest in August 2012 which saw Sino-Forest’s Board of Directors replaced, resulting in the company being eventually delisted and liquidated.