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Exchange’s Disciplinary Action against Dongyue Group Limited (Stock Code: 189) and Ten Directors

Regulatory
27 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) Mr Zhang Jianhong, executive director;

CRITICISES:
(2) Mr Liu Chuanqi, former executive director;

and the Listing (Disciplinary Review) Committee of the Exchange on review

CRITICISES:
(3) Mr Liu Yi, former independent non-executive director;

and the Listing Appeals Committee of the Exchange on review 

CENSURES:
(4) Mr Cui Tongzheng, former executive director;

CENSURES AND CRITICISES:
(5) Mr Wu Tao, former executive director;

CRITICISES:
(6) Mr Fu Kwan, executive director;
(7) Mr Zhang Jian, executive director;
(8) Mr Ting Leung Huel Stephen, independent non-executive director;
(9) Mr Yang Xiaoyong, independent non-executive director;
(10) Mr Yue Run Dong, former independent non-executive director; and
(11) Dongyue Group Limited (Stock Code: 189).


During an internal audit in September 2015, some suspected misappropriations by the Company’s financial controller came to light. The financial controller was responsible for the Company’s wealth management business. The Company identified transactions involving loans/deposits worth nearly RMB 1.5 billion entered into over a period of about 1.5 years. The entire amount remains unrepaid or has been forfeited. The Company was found to have significant internal control deficiencies in relation to its wealth management business. The directors had failed to implement effective risk management and internal control procedures to supervise the financial controller or safeguard the Company’s assets.

 

Key messages:

Directors, both executive and non-executive, have clear duties to safeguard assets of a listed issuer. They must ensure that adequate internal controls are established and maintained. Placing trust in senior members of staff is not a substitute for a proper internal control framework.
 
A copy of the Statement of Disciplinary Action is available on the HKEX website.

 

 

Ends

Updated 27 May 2021