Exchange’s Disciplinary Action against Hsin Chong Group Holdings Limited (delisted, previous Stock Code: 404) and its former Directors

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) Hsin Chong Group Holdings Limited (delisted) (previous stock code: 404);

IMPOSES A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT against:
(2) Mr Zhou Wei, former executive director of the Company;

CRITICISES:
(3) Mr Joseph Kin Hung Choi, former executive director and chief executive officer;
(4) Mr Wilfred Shek Chun Wu, former executive director;
(5) Mr Lin Zhuo Yan, former non-executive director and non-executive chairman;
(6) Mr Chen Lei, former non-executive director;
(7) Mr Yan Jie, former non-executive director;
(8) Mr Chui Kwong Kau, former non-executive director and member of the audit committee.

The statement in respect of Mr Zhou above is made in addition to a public censure against him. The Prejudice to Investors’ Interests Statement is a statement that, in the Exchange’s opinion, had Mr Zhou remained on the board of directors of the Company and the Company remained listed, his retention of office would have been prejudicial to the interests of investors. 

AND DIRECTS:
Training for relevant directors.

Between August and December 2016, the Company entered into agreements with companies related to Mr Zhou, and paid out to those companies a total sum of RMB376.5 million. The original agreements were subsequently terminated, and the sums paid out were thereafter treated as loans. These loans were still outstanding as at the Company’s latest published annual report. The transactions, which were approved by Mr Zhou, were discloseable and connected transactions but the Company did not comply with the Listing Rules. Mr Zhou did nothing to address his conflict of interest. 

The Company had no internal controls in relation to financial reporting, Rule compliance in respect of notifiable and connected transactions, approval of transactions, and avoidance of conflict of interest. The other directors failed to discharge their duties to ensure the Company had adequate and effective internal controls for Rule compliance and to safeguard the assets of the Company. 

Ends