Market Turnover


Exchange’s Disciplinary Action against Good Resources Holdings Limited (Delisted) (Previous Stock Code: 109) and a Former Director

05 Oct 2022

(A wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited)


The Stock Exchange of Hong Kong Limited 


(1)Good Resources Holdings Limited; and


(2)Mr Chen Chuanjin, former executive director and chairman.

The statement made in respect of Mr Chen above is made in addition to a public censure against him. The Director Unsuitability Statement is a statement that, in the Exchange’s opinion, Mr Chen is unsuitable to occupy a position as director or within senior management of the Company or any of its subsidiaries.


In 2019-2020, the Company’s subsidiary engaged in several concerning transactions and practices, including:

  1. Entry into loan agreements with, and pledge contracts to secure the loan obligations of, companies connected with the Company’s controlling shareholder. Deposits with a value of nearly RMB1 billion which were subject to the pledges were enforced and deducted by the beneficiary bank.
  2. Circular payments involving receipt of RMB378 million from one of the controlling shareholder companies on 30 June 2020, and the return of the same sum to the same company on 1 July 2020 – either side of the Company’s end of year financial reporting point.
  3. Provision by the subsidiary to the Company of financial statements showing a subscription for certain wealth management products with a value over RMB600 million as at 30 June 2020. An independent forensic review later found that this subscription did not occur, and that the purported subscription and the circular payments were likely intended to conceal the bank enforcement of the pledge contracts.

Mr Chen had knowledge of at least the pledge contracts and loan agreements but failed to report them to the Company or take steps to procure the Company’s Rule compliance. The belated discovery of these issues in or after September 2020 caused a delay in publication of the Company’s annual results, a suspension of trading, and ultimately the cancellation of the Company’s listing.

Mr Chen committed serious breaches of his directors’ duties, failed to protect the Company’s assets, and failed to cooperate with the Exchange’s investigation. The attempt to conceal the enforcement of the pledge from the investing public demands a strong regulatory response.

The Exchange notes that the Company and Mr Chen have contributed to an expedited resolution of the matter by agreeing to settle the intended disciplinary proceedings.

Key messages:

Listed companies must not use their funds to provide financial assistance without complying with the Listing Rules.

Financial reporting serves a key function in maintaining an informed market. Issuers and their directors should carefully scrutinise any payments that straddle across the end of a financial reporting period.

Directors must ensure that the board is provided with timely and appropriate information regarding transactions, and that the company complies with disclosure and other requirements of the Listing Rules. Directors must also act honestly, in good faith and in the interests of the company and they must report material transactions of the company to the board in a timely manner.

A copy of the Statement of Disciplinary Action in respect of the Company and Mr Chen is available on the HKEX website.