Market Turnover
-






-
-
|
|
|
|
|
|
-
-
-
Loading

Exchange’s Disciplinary Action against Wisdom Wealth Resources Investment Holding Group Limited (Stock Code: 7) and 12 Directors

Regulatory
08 Jul 2024

香港联合交易所有限公司
(香港交易及结算所有限公司全资附属公司)
THE STOCK EXCHANGE OF HONG KONG LIMITED
(A wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited)

The Stock Exchange of Hong Kong Limited

CRITICISES:

1. Wisdom Wealth Resources Investment Holding Group Limited (formerly known as Hong Kong Finance Investment Holding Group Limited);

2. Dr HUI Chi Ming, former executive director and Chairman;

3. Mr Neil BUSH, executive director;

4. Mr CAO Yu, executive director;

5. Mr LAM Kwok Hing, former executive director;

6. Mr NAM Kwok Lun, former executive director;

7. Mr XU Jun Jia, executive director and Chairman;

8. Dr CHUI Say Hoe, former executive director;

9. Mr REN Qian, former executive director;

10. Mr CHEN Wei Ming Eric, former independent non-executive director;

11. Mr NG Chi Kin David, former independent non-executive director;

AND CENSURES:

12. Mr NGAN Kam Biu Stanford, independent non-executive director; and

13. Mr YIM Kai Pung, former independent non-executive director.

AND FURTHER DIRECTS:

each of the above directors to attend training.

 

In January 2018, the Company announced the acquisition of some land in Zhanjiang. The value of the land that was disclosed in the Company’s announcements and financial results varied significantly within a year of the acquisition. The value was disclosed as RMB 1.15 billion in December 2017, RMB 8 billion as at 30 June 2018, and then RMB 3.1 billion as at 31 December 2018.

The seven-fold increase in the value of the land disclosed in the Company’s 2018 interim results had a dramatic effect on the Company’s disclosed financial position, contributing to a reported profit of HK$3 billion in the Company’s 2018 interim results, contrasted with its position of reporting a loss or below HK$100 million profit in its annual results for the three preceding years.

In approving the 2018 interim results, the directors had relied on a valuation. However, they did not take sufficient steps to ensure that their reliance on the valuation was reasonable, and accordingly they failed to properly discharge their duties. They had no expertise in the valuation of land, but did not take any steps to make enquiries with the valuer about the substantial increase, and did not consider seeking a second opinion or other professional advice. As regards the value of the land and/or the valuation methodology, the disclosure in the 2018 interim results was not accurate and complete in all material respects.

Key messages:

Directors must exercise independent judgement in respect of valuations and ensure any reliance on valuations is reasonable. Excessive or unquestioning reliance on a valuation may amount to a failure by directors to exercise due skill, care and diligence.

Directors are expected to cast a critical eye over the valuation, generally understand how the valuation was derived or calculated, and question matters such as assumptions, methodology and/or comparables adopted by the valuer. They should also consider consulting auditors or obtaining other professional advice.

 
The Statements of Disciplinary Action (Company and 10 Directors, Two Directors of the Company) are available on the HKEX website.

 

 

Ends