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Exchange’s Disciplinary Action against China Fortune Investments (Holding) Limited (Stock Code: 8116) and Nine Directors

Regulatory
07 Jul 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 GEM Listing Committee of The Stock Exchange of Hong Kong Limited

CENSURES:

(1) China Fortune Investments (Holding) Limited (Stock Code: 8116);
(2) Mr Stephen William Frostick, executive director;
(3) Mr Xu Jing An, independent non-executive director;
(4) Ms Li Ka Ki, former executive director;
(5) Mr Liu Yun Ming, former executive director; and
(6) Ms Ching Wai Han, former independent non-executive director,

and the Listing Review Committee of the Exchange on review

CRITICISES:

(7) Mr Cheng Chun Tak, executive director and former Chairman;
(8) Mr Huang Sheng Lan, non-executive director;
(9) Mr Chang Jun, independent non-executive director; and
(10) Mr Lee Chi Hwa Joshua, former independent non-executive director. 

AND DIRECTS:

The above directors to attend training.

 

In 2018, the Company’s subsidiary entered into loan transactions and disposed of properties in the PRC without informing or obtaining authorisation from the Company. The loans were not recorded in the Company’s books and records, and the disposals of properties were not announced as required under the GEM Listing Rules. This led to delayed publication of the Company’s financial statements, and a suspension of trading in the Company’s shares for over two years.

There were clear deficiencies in the Company’s internal controls and oversight in respect of the operation and affairs of its subsidiaries for which all of the directors, both executive and non-executive, were responsible.

 

Key Messages:

Directors should take an active interest in the operation and affairs of the listed issuer. This includes implementing adequate supervisory and monitoring mechanisms over the affairs of its subsidiaries. The duty to put in place appropriate and effective internal controls systems rests on both executive and non-executive directors. 

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

 

Ends

Updated 07 Jul 2021