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:
- Mr Niu Sanping, former executive director and chairman of China General Education Group Limited (Stock Code: 2175);
- Mr Niu Jian, former executive director and CEO;
- Mr Niu Xiaojun, executive director;
- Ms Zhang Zhonghua, executive director;
AND FURTHER DIRECTS:
each of Mr Niu Xiaojun and Ms Zhang Zhonghua to attend training.
Father and son Mr Niu Sanping and Mr Niu Jian, the controlling shareholders of the Company, entered into a number of problematic transactions on behalf of the Company prior to and shortly after the Company’s listing.
Mr Niu Sanping signed a pre-IPO investment agreement with a third party in relation to the subscription of the Company’s IPO shares by the third party, in an effort to shore up demand for the Company’s shares at the time of listing.
Despite the agreement being subsequently rescinded upon advice, Mr Niu Sanping and Mr Niu Jian nevertheless procured the Company to grant a loan in the sum of $25 million, and to make a $60 million investment in a fund. These transactions closely mirrored the obligations of the Company under the rescinded investment agreement.
Further, Mr Niu Sanping and Mr Niu Jian both procured the Company to grant interest-free loans in the sum of approximately $40 million to a friend of Mr Niu Jian.
The commercial rationale for the loans and the investment in the fund, and the due diligence conducted on the counterparties of the transactions, were questionable. In the case of the investment in the fund, the directors did not consider any other investment opportunities or products. Mr Niu Xiaojun and Ms Zhang Zhonghua approved the $25 million loan and the $60 million investment without questioning the basis for the same.
Mr Niu Sanping and Mr Niu Jian have provided a number of undertakings, including an undertaking that they will not take up any directorship or senior management positions in any listed issuer in Hong Kong or its subsidiaries in the future. Mr Niu Sanping and Mr Niu Jian have both resigned from the Board with effect from 27 May 2024.
Key messages:
The Exchange will scrutinise transactions entered into by listed issuers, including those entered into around the time of listing. The commercial rationale for such transactions, as well as the steps taken by the directors to ensure that such transactions are in the interests of the company as a whole, will be taken into account by the Exchange.
Directors must also avoid and manage all conflicts of interest and be accountable for the proper use of the issuer’s assets. Failure to do so will severely undermine corporate governance and the trust of public investors.
|
Ends