Market Turnover


Exchange’s Disciplinary Action against Blockchain Group Company Limited (Delisted, Previous Stock Code: 364) and Ten Directors

28 Mar 2023

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


The Stock Exchange of Hong Kong Limited 

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

(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;

(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,

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.

Key messages:

Directors are expected to apply skill, care and diligence when considering a proposed transaction. This includes ensuring that sufficient due diligence has been conducted. A professional valuation will often be warranted but care must be taken to ensure they are obtained and used appropriately.

Each director must exercise his/her own independent judgement when assessing a proposed transaction, including any valuation. Unquestioning reliance on valuation reports or the work of others may constitute a breach of duty. The Exchange’s newsletter of December 2021 reiterated the directors’ responsibilities in their assessment of corporate transactions.

A copy of the Statement of Disciplinary Action is available on the HKEX website.