
On 4 September 2025, the Hong Kong Securities and Futures Commission (HK SFC) announced as it suspended the licence of Mr Chow Tsz Lam, a former responsible officer (RO) and Manager-in-Charge (MIC) of Agg. Asset Management Limited (Agg), for 12 months under section 194 of the Securities and Futures Ordinance (HK SFO). The suspension runs from 2 September 2025 to 1 September 2026. The disciplinary decision followed findings that Agg, as investment manager of a Cayman-incorporated fund, invested between 88.83% and 100% of the fund’s assets in debentures issued by companies wholly owned by Mr Ng Ka Shun, Agg’s sole shareholder, director, and other RO. These investments created unmanaged conflicts of interest, exposed investors to material risks, and inflated the net asset value (NAV) through questionable structures. The HK SFC determined that Chow, as RO and MIC, failed to safeguard investor interests, ensure proper risk controls, and prevent NAV inflation despite being fully aware of the debenture transactions.
In para 1 of the Statement of Disciplinary Action (4 September 2025), the HK SFC stated: “The HK SFC has suspended the licence of Mr Chow Tsz Lam (Chow)… for 12 months from 2 September 2025 to 1 September 2026 pursuant to section 194 of the Securities and Futures Ordinance.”
In para 3 of the Statement, Agg was found to have “failed to prevent, manage and minimise actual or potential conflicts… failed to ensure sufficient risk management measures… and caused Fund A to invest in 2 debentures which appeared to have been constructed for the purpose of inflating the fund’s net asset value (NAV).”
In para 15 of the Statement, the HK SFC identified breaches of “General Principle (GP) 1… GP 2… GP 6… Paragraphs 1.2(d), 1.5 and 1.7.1 of the Fund Manager Code of Conduct… and GP 9 of the Code of Conduct.”
Fund A’s Debenture Investments and Conflicts of Interest
Between February 2018 and February 2019, Fund A subscribed for five debentures issued by companies owned by Ng. At times, these represented almost the entirety of the fund’s portfolio. Shortly after receiving US$4.25 million in subscription funds, Ng withdrew over US$4.1 million as personal loans. The SFC noted that Agg failed to act against partial repayments and failed to protect investors. Moreover, two debentures i.e. one issued by Agg 1 and another by Agg 2, were used to inflate NAV by booking a “Corporate Commitment Fee” and a “Corporate Guarantee” as revenues and cash equivalents, despite no genuine commercial basis
Chow’s Failures as Responsible Officer
Although Ng made the investment decisions, Chow was fully aware of the debenture subscriptions and their conflicts. He did not raise concerns, did not ensure conflicts were managed, and failed to oversee fair treatment of investors. As MIC for compliance, AML/CTF, operational control, and risk management, Chow also failed to act on risks related to concentration, conflicts, and valuation. The SFC found he communicated directly with the fund administrator about NAV valuations but failed to consider the distortive effect of the debenture structures
Compliance Implications and Requirements for Asset Managers in Hong Kong
The case illustrates the importance of active oversight by responsible officers and MICs. Senior management cannot rely on delegation to decision-makers when faced with conflicts of interest or valuation risks. Asset managers must:
- Implement effective risk management systems.
- Ensure NAV accurately reflects asset values.
- Prevent conflicts or manage them with safeguards and disclosures.
- Uphold fiduciary duties to investors under the Code of Conduct and FMCC.
Geopolitical and Market Insights
The sanction against Chow reflects Hong Kong’s broader commitment to align its fund management industry with international fiduciary and governance standards. In a regional market attracting cross-border funds, regulatory actions of this nature assure global investors that Hong Kong will enforce accountability not only for misconduct but also for failures of oversight. This reinforces Hong Kong’s role as a leading regulatory hub for asset and fund managers in Asia.
(Source: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=25PR138)