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) Brilliance China Automotive Holdings Limited (Stock Code: 1114);
IMPOSES:
A DIRECTOR UNSUITABILITY STATEMENT and CENSURE against:
(2) Ms Ma Nina, former executive director;
(3) Mr Yan Bingzhe, former executive director; and
A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT and CENSURE against:
(4) Mr Sun Baowei, former executive director.
The Director Unsuitability Statement is a statement that, in the Exchange’s opinion, Ms Ma and Mr Yan are unsuitable to occupy a position as director or within senior management of the Company or any of its subsidiaries.
The Prejudice to Investors’ Interests Statement is a statement that, in the Exchange’s opinion, had Mr Sun remained on the board of directors of the Company, the retention of office by him would have been prejudicial to the interests of investors.
Between 2019 and 2021, certain subsidiaries of the Company provided financial assistance exceeding RMB53.4 billion for the benefit of entities including the Company’s then controlling shareholder, Huachen Automotive Group Holdings Company Limited. The financial assistance included guarantees, deposit pledges and fund transfers, and had no apparent commercial benefit to the Company. The Company ended up suffering substantial losses. The financial assistance came about after Huachen had used its influence as the then controlling shareholder.
Ms Ma, Mr Yan and Mr Sun held senior positions within Huachen. Despite their clear conflict of interest, they were involved in the provision of the financial assistance from the Company to Huachen. They failed to report the matter to the Company’s board and failed to procure the Company’s compliance with the Listing Rules applicable to the financial assistance.
The Company’s subsequent discovery of the hidden financial assistance led to the delayed publication and dispatch of its financial results and reports.
Given their conduct, Ms Ma, Mr Yan and Mr Sun breached their director’s duties and their obligations to use their best endeavours to procure the Company’s compliance with the Rules.
Ms Ma and Mr Yan also failed to cooperate in the Exchange’s investigation.
Key messages:
Directors must take active steps to manage any conflicts. Particular care is required when they hold positions in both the parent company and a subsidiary.
Directors must keep the board informed of material information for good corporate governance and to ensure compliance with requirements under the Listing Rules.
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