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Exchange’s Disciplinary Action against Tech Pro Technology Development Limited (Delisted, Previous Stock Code: 3823) and Seven of its Former Directors

Regulatory
26 May 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

CENSURES:

(1) Tech Pro Technology Development Limited (Delisted, Previous Stock Code: 3823);
(2) Mr Lee Tsz Hang, former executive director; 
(3) Mr Liu Xinsheng, former executive director;
(4) Mr Chiu Chi Hong, former executive director; and
(5) Mr Li Wing Sang, former executive director,

and the Listing Review Committee of the Exchange on review

CENSURES:

(6) Mr Lau Wan Cheung, former independent non-executive director;
(7) Mr Ng Wai Hung, former independent non-executive director; and
(8) Mr Tam Tak Wah, former independent non-executive director,

AND FURTHER STATES that in the Exchange’s opinion, had Mr Li and Mr Liu remained on the board of directors of the Company, their retention of office would have been prejudicial to the interests of investors.

The Company acquired a 50 per cent interest in a joint venture from the JV Partner in 2014. Mr Li and Mr Liu were appointed as the Company’s representatives in the joint venture. However, the directors failed to take adequate steps or implement effective risk management and internal control procedures to monitor the operations of the joint venture or safeguard its assets. The inaction by the directors created an environment for irregularities, which went undetected and resulted in the joint venture’s loss of a substantial asset.

Although the independent non-executive directors were not responsible for the initial investment in the joint venture, this did not absolve them from their failure to take steps to ensure the adequacy of the relevant risk management and internal control procedures. Amongst other things, the independent non-executive directors were members of the audit committee, and were responsible for the review and supervision of the financial reporting process and internal controls of the Company. The independent non-executive directors had considerable relevant experience and knowledge which should have enabled them to assess the affairs of the Company reasonably accurately.

 

Key messages:

Directors have clear duties and responsibilities to safeguard the interests and assets of a listed issuer. Directors, both executive and non-executive, must ensure that effective risk management and internal control systems are established, maintained and implemented.
 
A copy of the Statement of Disciplinary Action is available on the HKEX website.

 

 

Ends

Updated 26 May 2021