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:
- China New City Commercial Development Limited (Stock Code: 1321);
- Mr Shi Nanlu, executive director and Chief Executive Officer;
- Mr Dong Shuixiao, former executive director;
- Ms Jin Ni, former executive director; and
- Mr Shi Zhongan, non-executive director and Chairman.
AND DIRECTS:
a review of the Company’s internal controls for procuring compliance with Chapters 14 and 14A of the Listing Rules and each of the above directors to attend training.
Between 2014 and April 2022, the Company provided recurring advances to its controlling shareholder’s group which constituted notifiable and/or connected transactions, but did not comply with the procedural requirements under Chapters 14 and/or 14A. The amount of the advances ranged from RMB39 million to RMB2,224 million per year based on the highest daily balance. They were unsecured and some of the advances were interest-free.
All the above directors breached their directors’ duties, as they were aware of and/or approved the advances, but have failed to use their best endeavours to procure the Company’s compliance with the Listing Rules.
The Exchange notes that the Company and all the above directors have contributed to an expedited resolution of the matter by agreeing to settle the disciplinary proceedings.
Key messages:
A company enters into a regulated environment on listing. The directors must ensure that the company’s funds are not used as if they were the controlling shareholder’s own, such as making advances to the parent company or controlling shareholder, without fully complying with the applicable Listing Rules.
Directors are expected to consider the Rule implications of transactions and to take proactive steps to ensure Rule compliance.
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