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Exchange’s Disciplinary Action against Baytacare Pharmaceutical Co., Ltd. (Delisted, Previous Stock Code: 8197), 12 Directors and four Supervisors

Regulatory
08 Jun 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 Stock Exchange of Hong Kong Limited

CENSURES:
(1) Baytacare Pharmaceutical Co., Ltd. (delisted);
(2) Mr Wang Shao Yan, former executive director;
(3) Ms Cui Bing Yan, executive director;
(4) Mr Guo Ai Qun, executive director;
(5) Mr Cao Yang, executive director;
(6) Mr Chen You Fang, independent non-executive director;
(7) Mr Shi Peng, former non-executive director;
(8) Ms Hui Lai Yam, former independent non-executive director;
(9) Mr Yang Yu Lin, former independent non-executive director;
(10) Mr Gao Zhi Kai, former independent non-executive director;
(11) Mr Qin Hai Bo, former executive director;
(12) Mr Jiang Xiao Bin, former executive director;
(13) Mr Zhao Zhen Xing, former independent non-executive director;
(14) Ms Lin Xia Rong, supervisor;
(15) Ms Han Xue, former supervisor; 
(16) Ms Yang Li Xue, former supervisor; and
(17) Ms Meng Shu Hua, former supervisor,

AND STATES:

(1) in the Exchange’s opinion, by reason of Mr Wang’s failure to discharge his responsibilities under the GEM Listing Rules, had Mr Wang remained on the board of directors of the Company, his retention of office would have been prejudicial to the interests of investors; and

(2) the conduct in this matter of Mr Qin, Mr Jiang and Mr Zhao, who failed to cooperate in the investigation conducted by the Listing Division, will be taken into account in assessing their suitability to be a director of a company listed on the Exchange.

 

AND DIRECTS:

All the above directors (except Mr Wang) to undergo training on GEM Listing Rule compliance.

Between 2016 and 2017, Mr Wang procured the entry into or payments under a range of transactions which resulted in over RMB90 million of provisions or impairments. This included transactions with companies controlled by him and/or his father, and which did not confer any commercial benefit on the Company, but instead exposed the Company to significant potential liability. Transactions were concealed from the board, and were not notified to or approved by shareholders as required under the GEM Listing Rules.

There were clear deficiencies in the Company’s internal controls for which all of the directors, both executive and non-executive, were responsible. The directors and the supervisors failed to carry out their supervisory duties, and ensure appropriate checks and balances were put in place.

 

Key messages:

The withholding of material information required to be disclosed under the Rules is unacceptable and prejudicial to the interests of shareholders.

All directors, including non-executive directors, must take an active interest in the affairs of the company. They are responsible for ensuring that the company establishes and maintains appropriate and effective internal control systems.

Supervisors play an important role: they must use their best endeavours to procure Rule compliance by the company and its directors.

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

 

 

Ends

Updated 08 Jun 2021