6 Nicky is the chairman of Welcome Properties Investment Limited, a company listed in the Main Board of Hong Kong Stock Exchange. Nicky owns 35 percent of the shareholding in the company. Nicky has been in private discussion with Raymond, his old friend and chairman of Faithful Corporate Finance Limited with a view to securing financial support to his plan to privatise the company. Raymond told Nicky that he had to seek the formal approval of his Board, but he could not see any real problem in obtaining the funding. Nicky was very happy to hear about this and after he spent a few hours drinking in a Bar in Lan Kwai Fong, he posted a message on his Facebook Page saying that "I am so tired of the control by Securities and Futures Commission and the Listing Rules that I have decided to privatise my company and will make a general offer to acquire all your shares at $25. I have received financial support from a Corporate Finance Company to finance the deal." Jimmy purchased some shares at $24 after he was told by his girlfriend about Nicky's message in his Facebook Page. Later the shares were suspended at the request of the Hong Kong Stock Exchange. The company was forced to issue an announcement that the Facebook Message issued by Nicky has not been issued with the approval of the Board and that investors should be careful when trading in the shares. As a result of the announcement, the share price lost 20 percent. Jimmy suffered a huge loss of $2,000,000. Jimmy complained to the Securities and Futures Commission to seek compensation. Raymond subsequently informed Nicky that his company could not provide financial support to Nicky's privatisation plan. This was later disclosed by the company. On a separate matter two months later, Nicky was informed by the company's legal adviser in Indonesia that due to a serious breach of local legislation, the company's property project would be closed down immediately with a fine of US$100 million. Since Nicky was at that time in serious discussion with a potential strategic investor from Shanghai to acquire his controlling stake of 35 percent, Nicky decided not to issue any announcement about the closure of the factory in Indonesia until four weeks later. When Michael, one of the INED was informed about Nicky's decision not to disclose the terrible news about the project in Indonesia, he was shocked and immediately tendered his resignation. Nicky instructed Cindy, the Company Secretary that she should issue an announcement in accordance with Listing Rules Chapter 13. Nicky told Cindy that she should state in the announcement that Michael resigned due to personal reason rather than in disagreement with Nicky. Three weeks later Nicky obtained the approval of the Board to appoint Dorothy, his daughter as the new CEO. Dorothy has no relevant experience and professional qualifications in property investment. She has been working as a junior administrator of a famous university in USA for over 20 years. Nicky told Cindy to make an announcement about Dorothy's appointment in the following terms: "We are delighted to announce that Miss Dorothy Wong, aged 56, has been appointed to be the Chief Executive Officer with immediate effect. Miss Wong, is an experienced administrator." REQUIRED (a) Consider the civil liabilities of Nicky in the context of Part 14A of Securities and Futures Ordinance in relation to his publication of the Facebook message. (5 marks) (b) Consider the civil liabilities of Nicky under the Securities and Futures Ordinance in relation to his decision not to make immediate disclosure of the closure of the project in Indonesia and the heavy penalties imposed by the Indonesia Government. (5 marks) (c) Critically consider the proposed announcement by Nicky in relation to Michael's resignation in the context of Chapter 13 of the Listing Rules. (5 marks) (d) Critically consider the proposed announcement by Nicky in relation to the appointment of Dorothy in the context of Chapter 13 of the Listing Rules. You are required to state at least five matters which should be included in the announcement. (5 marks) (Total 20 marks)