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Grace Lau is a management accountant at Jade Bay Logistics Ltd, a wholly owned subsidiary of Jade Bay Holdings Ltd, a Main Board issuer. At work she learns of a large unexpected group loss before it is announced, and sells her Jade Bay Holdings shares next morning. Which of the following statements are CORRECT under Part XIII? I. She is connected with Jade Bay Holdings as an employee of a related corporation of it. II. Selling to avoid a loss, not to make a profit, can still be insider dealing. III. She would be connected only if she held 5% or more of Jade Bay Holdings' shares. IV. Had she left Jade Bay Logistics 4 months before the sale, she would still be connected.
Statement I is correct: s.247(1)(a) treats an individual as connected with a corporation if she is a director or employee of it or of a related corporation, which includes a subsidiary. Statement II is correct: dealing while connected and knowing the information is inside information is insider dealing under s.270(1)(a) whether the aim is profit or loss avoidance; disgorgement covers 'loss avoided' (s.257(1)(d)). Statement III is wrong: the 5% substantial-shareholder route in s.247(1)(b) is an alternative, not a requirement. Statement IV is correct: s.247(1)(e) keeps a person connected if she was connected at any time within the 6 months before the dealing. Source: SFO (Cap. 571) s.247(1)(a), (b), (e), s.257(1)(d), s.270(1)(a) (as at October 2026).
Candidates think only staff of the listed company itself are insiders, or that leaving the job ends the connection at once.
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