In HCA 215/2025, the Hong Kong Court of First Instance considered an application by the Securities and Futures Commission (SFC) for interlocutory injunctive relief under both the Court’s Mareva jurisdiction and section 213 of the Securities and Futures Ordinance (SFO).

The civil proceedings arose out of alleged market manipulation involving the shares of KNT Holdings Limited (KNT), a company listed on the Main Board of The Stock Exchange of Hong Kong. The SFC alleged that a group of defendants had perpetrated a “ramp-and-dump” scheme in 2019, artificially inflating KNT’s share price before disposing of their holdings at substantial profit, causing significant losses to market investors. At the time of the civil application, criminal proceedings under section 300 of the SFO had already been commenced against a number of defendants and were ongoing.

The application

The SFC sought interlocutory injunctions restraining several defendants from disposing of, dealing with or diminishing the value of their assets in Hong Kong, up to approximately HK$219 million, with the stated purpose of preserving assets for potential compensation and restoration orders if contraventions were ultimately established.

The application was resisted on multiple grounds, including alleged delay, the existence of parallel criminal proceedings, the presence of other enforcement measures, and submissions that the civil action was unnecessary or duplicative.

Key findings

The Court granted the injunctions.

First, it held that the SFC had shown a good arguable case of contravention of section 300 of the SFO, and that there was a real risk of dissipation of assets absent injunctive relief. The Court was satisfied that the evidence, including expert analysis of trading data, supported the allegation of a coordinated scheme and justified interim protection.

Secondly, the Court rejected the argument that the civil proceedings merely duplicated the criminal process. In doing so, the Court made clear that section 213 proceedings serve a distinct function, stating:

“I am unable to agree that the present action only serves as an insurance for the criminal proceedings. This Action has its own utility and function and there is no issue of duplicity. The interlocutory injunctions sought are to ensure that any compensatory and restoration orders granted in the Action would not be rendered nugatory.”

The existence of parallel criminal prosecutions did not therefore deprive the civil action of utility or render it oppressive.

Thirdly, the Court held that delay, in itself, was not a bar to relief. The relevant question remained whether there was a real risk of dissipation. In light of the complexity of the alleged scheme and the volume of material investigated, the Court accepted the explanation for the time taken and found no culpable delay.

The Court also rejected submissions that existing enforcement measures were sufficient. Those measures served different purposes, applied different thresholds, and did not cover assets that had not been fully disclosed. In that context, section 213 injunctions remained necessary.

Finally, the Court reaffirmed that the SFC, acting as a public authority enforcing statutory duties in the public interest, was not required to give a cross‑undertaking in damages when seeking injunctive relief under section 213 of the SFO.

Takeaways

The decision illustrates how courts approach applications for early civil asset‑preservation relief under section 213, including where criminal proceedings are already underway. It confirms that civil enforcement under section 213 is not ancillary to prosecution, but operates as a distinct statutory mechanism subject to judicial scrutiny and public‑law principles.

For companies and individuals under investigation, the case underscores that regulatory exposure may crystallise across multiple forums at the same time, and that investigative and interim stages may carry immediate and legally enforceable consequences.

The full judgment can be accessed here.