Directors’ Liabilities in Hong Kong

Directors’ Liabilities in Hong Kong

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In the recent fraud scandal of Nasdaq-listed Luckin Coffee Inc, of which sales of around RMB2.2 billion (USD 310.5 million) were allegedly fabricated, the shares of this fast-growing Chinese coffee chain and Starbucks rival, have tumbled 83% in market value, with its closing price before trading suspension at only 8.8% of its all-time high.

With heightened attention on directors’ liabilities in managing a company, this article looks into the scope of duties that company directors may be personally liable for under Hong Kong law and the extent of cover of Directors’ and Officers’ Liability Insurance (“D&O Insurance”) against losses or legal costs in relation to holding such office.

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