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) Blockchain Group Company Limited (delisted, previous stock code: 364);

IMPOSES A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT against:
(2) Mr Cai Zhenrong, chairman and executive director;
(3) Mr Cai Yangbo, managing director and executive director;
(4) Mr Cai Zhenyao, executive director;
(5) Mr Cai Zhenying, executive director;
(6) Dr Li Mow Ming Sonny, independent non-executive director;
(7) Mr Su Yichao, former joint chairman and executive director;
(8) Mr Wang Qidong, former independent non-executive director;

CENSURES:
(9) Mr Choi Wing Toon, former executive director;
(10) Mr Chen Wenfang, former executive director; and
(11) Mr Lawrence Gonzaga, former independent non-executive director,

AND FURTHER DIRECTS:
each of Mr Choi, Mr Chen and Mr Gonzaga to attend training.

The statement made in respect of Mr Cai Zhenrong, Mr Cai Yangbo, Mr Cai Zhenyao, Mr Cai Zhenying, Dr Li, Mr Su and Mr Wang above is made in addition to a public censure against each of them. The Prejudice to Investors’ Interests Statement is a statement that, in the Exchange’s opinion, had Mr Cai Zhenrong, Mr Cai Yangbo, Mr Cai Zhenyao, Mr Cai Zhenying, Dr Li, Mr Su and Mr Wang remained on the board of directors of the Company, the retention of office by them would have been prejudicial to the interests of investors.

In September 2018, the Group acquired ginseng assets for approximately $2.1 billion. The Company did not announce or otherwise disclose the acquisition. Under the Rules, the acquisition should also have been subject to independent shareholders’ approval.

The acquisition was discovered by the Exchange during a review of draft financial statements provided by the Company in support of its application to resume trading. The draft financial statements also revealed a substantial impairment on the ginseng assets of around $1.25 billion, a near depletion of the cash position and a significant loss for the financial year ended 31 December 2018.

Mr Cai Zhenying was the director responsible for the acquisition. He did not ensure sufficient due diligence was carried out. He also did not obtain a proper valuation. The directors in this case either approved or were aware of the acquisition, but failed to ensure the acquisition was in the Company’s interest. No steps were taken by the directors to procure the Company’s Listing Rules compliance.

Ends