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:
1. China ZhengTong Auto Services Holdings Limited (Stock Code: 1728);
IMPOSES A DIRECTOR UNSUITABILITY STATEMENT and CENSURE against:
2. Mr Wang Mu Qing, former chairman and executive director;
3. Mr Shao Yong Jun, former executive director;
CENSURES:
4. Mr Koh Tee Choong, former executive director and chief executive officer;
5. Mr Li Zhubo, former executive director and chief financial officer; and
6. Mr Wang Kunpeng, former executive director and vice chairman,
AND FURTHER DIRECTS:
Mr Koh, Mr Li and Mr Wang Kunpeng to attend training.
The Director Unsuitability Statement is a statement that, in the Exchange’s opinion, Mr Wang Mu Qing and Mr Shao are unsuitable to occupy a position as director or within senior management of the Company or any of its subsidiaries.
In 2016, a subsidiary of the Company entered into an undertaking to pay any shortfall if a company majority-owned by the son of the chairman failed to repay a loan and redeem certain investments totalling approximately RMB1.8 billion. The 2016 undertaking was replaced by three agreements in March 2020.
Each of the 2016 undertaking and the 2020 agreements (in aggregate) were major and connected transactions. The Company did not comply with the Listing Rules in respect of the transactions.
The chairman approved the 2016 undertaking and the 2020 agreements without declaring and avoiding his conflict of interest in the transactions. He did not disclose that the transactions involved his son’s company. He also did not abstain from approving the transactions.
In approving the transactions, the chairman put the interest of his family over that of the Company. He concealed the 2016 undertaking from the board. He failed to inform the directors who were not involved in the approval of the 2020 agreements about the agreements. He also did not take steps to procure the Company’s compliance with the Listing Rules in respect of the transactions.
Mr Koh Tee Choong, Mr Li Zhubo and Mr Wang Kunpeng approved the 2020 agreements without independent consideration of whether they were in the Company’s interest, the potential risks to the Company, and risk mitigation. They also did not inform the rest of the board about the 2020 agreements. They over-relied on the Company’s compliance department to handle the listing rule compliance in respect of the 2020 agreements, without taking steps to check whether the obligations had been properly handled.
The chairman and Mr Shao Yong Jun failed to cooperate in the Exchange’s investigation.
Key messages:
Directors must take steps to avoid any conflicts of interests. They must always put the interest of the company above their own.
Directors must exercise independent judgement to evaluate whether a transaction is in the interest of the Company before approving any transaction.
Directors have the primary responsibility to ensure the company’s compliance with the Listing Rules. Excessive or unquestioning reliance on staff of the company may amount to a failure by directors to exercise due skill, care and diligence.
|
Ends