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Exchange’s Disciplinary Action against Six Directors of Moody Technology Holdings Limited (Stock Code: 1400)

Regulatory
17 Feb 2021

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 Listing Committee of The Stock Exchange of Hong Kong Limited (Exchange)

CENSURES:

(1) Mr Lin Qing Xiong (Mr Lin), former executive director (ED) and Chairman of Moody Technology Holdings Limited (Company);
(2) Mr Qiu Zhi Qiang, former ED of the Company (Mr Qiu);
(3) Mr Deng Qing Hui, former ED of the Company;

CRITICISES:

(4) Mr Chan Sui Wa, former independent non-executive director (INED) and Chairman of the Audit Committee (AC) of the Company; 
(5) Mr Ma Chong Qi, former INED and AC member of the Company; and
(6) Mr Yu Yu Bin, former INED and AC member of the Company.

(the directors identified at (1) to (6) above are collectively referred to as the Relevant Directors.)


STATES:

By reasons of the wilful failure of Mr Qiu to discharge his undertaking to cooperate with the Exchange’s investigation and Mr Lin to discharge his obligations under the Listing Rules and his Director’s Undertaking to the Exchange (in the form of Appendix 5B to the Listing Rules), had Mr Qiu and Mr Lin remained on the board of directors of the Company, their retention of office would have been prejudicial to the interests of investors.

AND DIRECTS:

  • the Company to retain an independent professional adviser to conduct an internal control review; and
  • the Relevant Directors (except Mr Lin and Mr Qiu) to attend training.

The Exchange found that the Relevant Directors failed to:

  • discharge their duties as directors in respect of certain of the Company’s receivables and prepayments: in particular, the EDs failed to safeguard certain of the Company’s assets, and the INEDs failed to take a sufficiently active interest in the Company’s affairs and proactively follow up anything untoward that comes to their attention;
  • procure the Company’s financial statements to provide a true and fair view; and
  • ensure the Company implemented an effective internal control system to ensure that key business decisions and significant financial issues were escalated to the board for consideration and/or information in a timely manner and for managing receivables and prepayments.

Key messages:

Executive directors should take proactive steps to safeguard company assets in carrying on its business.  Particular care should be taken when commencing a new business segment, and all members of the board of directors should be kept informed.  Failure to do so may amount to breach of director’s duties under the Listing Rules.

Independent non-executive directors must take an active interest in the issuer’s business and its financial performance, raise risk issues with the management, and follow up anything untoward that comes to their attention.

All directors should take proactive steps to address the auditors’ concerns to procure the issuer’s financial statements to provide a true and fair view of the state of affairs of the issuer and of the results of its operations and its cashflows.  Failure to do so may amount to breach of their director’s duties. 

Should a director fail to cooperate with the Exchange’s investigation, the Exchange may view his retention of office as a director of the issuer as being prejudicial to the interests of investors.

 

A copy of the Statement of Disciplinary Action is available on the HKEX website.

For the avoidance of doubt, the Exchange confirms that the sanctions in the Statement of Disciplinary Action apply only to the Relevant Directors, and not to any other past or present members of the board of directors of the Company.

 

 

Ends

Updated 25 Feb 2021