Exchange’s Disciplinary Action against China Ruifeng Renewable Energy Holdings Limited (Stock Code: 527) and its Executive Director, Mr Peng Zi Wei

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

CRITICISES:

(1) China Ruifeng Renewable Energy Holdings Limited (Stock Code: 527); and
(2) Mr Peng Zi Wei, executive director of the Company;

AND DIRECTS a review of the Company’s internal controls and for Mr Peng to attend training.

This case involves a US$100 million guarantee which was executed by Mr Peng on behalf of the Company without (i) consulting the Board, (ii) complying with the Company’s internal controls, or (iii) complying with the provisions of the Listing Rules. The guarantee would have constituted a major transaction of the Company.

Mr Peng considered that the guarantee did not constitute a “transaction” for the purposes of the Listing Rules, given that he had signed a supplemental agreement to release the Company from its obligations under the guarantee in the event that the transaction for which the guarantee was provided did not go ahead. However, Mr Peng’s analysis was incorrect as the guarantee was intended to be legally binding if the transaction had gone ahead. The supplemental agreement did not mean that the arrangement was no longer a transaction or otherwise excuse non-compliance with Chapter 14 requirements.

The Exchange found that the Company failed to comply with the requirements for major transactions under Chapter 14 of the Listing Rules, and that Mr Peng breached his duties and undertaking to comply with the Listing Rules to the best of his ability, and to use his best endeavours to procure the Company’s Listing Rule compliance.

Ends