On June 11th, GeLongHui reported that Sushang Technology Group (02350.HK) had initiated legal proceedings against the company and its wholly-owned subsidiary Multisoft Limited to the Competition Tribunal of the Competition Commission over a violation of Hong Kong Chapter 619 of Competition Ordinance from May 2020 to September 2021 regarding competition affairs.
After the signing of a cooperation agreement between the company, Multisoft, and the Commission, the contracting parties have reached a settlement regarding the legal proceedings. On June 7, 2024, the Tribunal issued a judgment against Multisoft according to the agreed facts and relief between the company, Multisoft, and the Commission. According to the judgment, (i) Multisoft was found to have engaged in anti-competitive activities, violating the first conduct rule (as defined in Hong Kong Chapter 619 of Competition Ordinance); (ii) Multisoft must (a) pay the Hong Kong government HKD 1.345 million, including a fine of HKD 1.19 million and the Commission's investigation costs of HKD 0.155 million; and (b) pay the Commission's legal costs incurred in its legal proceedings against the company and Multisoft; (iii) Multisoft must adopt and implement effective competition compliance plans; and (iv) the legal proceedings against the company will be stayed until Multisoft satisfies its monetary liability under the judgment.
The board of directors hereby informs the company's shareholders that the legal proceedings involve a former employee and a former management member of Multisoft, and are related to the quote for providing information technology services under the remote business program launched by the Innovation and Technology Commission in 2020. Therefore, the actions of the former employee are attributable to Multisoft. It should be noted that the company was not aware of the former employee's participation in any anti-competitive arrangements and did not derive any economic benefits from such arrangements.
Apart from monetary liabilities, the board of directors confirms that the legal proceedings have not had a significant adverse effect on the group's business, financial position, and operating results. The company was not aware of Multisoft's violation at that time. However, to prevent such incidents from happening again, the company will enhance its employee training program to promote ethical behavior. The company will closely monitor the performance of the cooperation agreement and take timely action to safeguard the interests of the group.