The Hong Kong Securities and Futures Commission (SFC) has obtained orders from the Court of First Instance against Zhang Wei, a former executive director of Coolpad Group Limited (02369). Mr. Zhang has been ordered to pay HKD 4 million in compensation to Coolpad for his responsibility in a series of transactions that caused financial losses to the company. Additionally, he is disqualified from acting as a director, liquidator, receiver, or manager of any listed or unlisted corporation in Hong Kong, or from participating in the management of any such entity, for a period of five years. He has also been ordered to pay the SFC's costs for the legal proceedings.

Concurrently, legal proceedings initiated by the SFC against six other former directors of Coolpad—namely Jia Yueting, Jiang Chao, Liu Jiangfeng, Liu Hong, Chen Jingzhong, and Xie Weixin—are still ongoing.

Mr. Zhang served as an executive director of Coolpad from March 20, 2017, to January 5, 2018. Prior to that, he was the company's finance manager from December 1, 2016, to March 20, 2017. The SFC found that between 2016 and 2017, Coolpad and its subsidiaries entered into five transactions involving approximately RMB 2 billion. These transactions allegedly provided short-term financing to entities held and/or controlled by Coolpad's former chairman and major shareholder. The deals were executed without proper approval or disclosure to shareholders, resulting in significant losses of around RMB 84 million for Coolpad.

The court has ordered Mr. Zhang to compensate Coolpad for a portion of these losses. Mr. Zhang admitted to breaching his duties, which included failing to act in good faith, failing to act in Coolpad's best interests, and failing to exercise independent judgment when approving two of the five transactions and authorizing payments for three others.

Furthermore, Coolpad's auditors had raised concerns regarding these transactions and the company's ability to continue as a going concern. However, Mr. Zhang failed to ensure that Coolpad disclosed these concerns in a timely manner. As a member of Coolpad's independent board committee during the relevant period, he also failed to act with the reasonable level of care, skill, and diligence required when investigating the transactions.