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. Kaisun Holdings Limited (Stock Code: 8203);
IMPOSES A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT and CENSURE against:
2. Mr Chan Nap Kee Joseph, executive director;
3. Mr Yang Yong Cheng, executive director;
CENSURES:
4. Mr Liew Swee Yean, independent non-executive director;
5. Dr Wong Yun Kuen, former independent non-executive director;
6. Mr Siu Siu Ling Robert, former independent non-executive director;
7. Mr Brian Ralph Anderson, former independent non-executive director; and
CRITICISES:
8. Dr Chow Pok Yu Augustine, former executive director,
AND FURTHER DIRECTS:
the Company to conduct an internal control review, to appoint a compliance adviser and to announce the relevant loans, payments and securities transactions, and each of the above directors (except Mr Chan and Mr Yang) to attend training.
The Prejudice to Investors’ Interests Statement is a statement that, in the Exchange’s opinion, the retention of office by Mr Chan and Mr Yang is prejudicial to the interests of investors.
Between 2015 and 2019, the Company provided financial assistance of nearly $40 million to Up Energy Development Group Limited (now delisted, previous stock code: 307) (Up Energy). The financial assistance took the form of loans to Up Energy and payments made on Up Energy’s behalf. At the time, Up Energy was in clear financial difficulty. In 2017, Up Energy had failed to pay the Company the entire balance of a $15 million loan, and had entered provisional liquidation. The Company nevertheless agreed to provide Up Energy with substantial further funding.
The loans/payments constituted both financial assistance and a major transaction. The Company was therefore required to make announcements and obtain shareholder approval. The Company failed to do so.
In 2019 and 2020, the Company also failed to announce certain securities transactions which constituted discloseable transactions.
Mr Chan and Mr Yang had close involvement in the Up Energy loans/payments. The other directors were also aware of these transactions. All of them failed to procure the Company’s GEM Rule compliance. Mr Yang and Dr Chow also failed to discharge their duties as compliance officers.
Providing support to Up Energy when it was in a difficult financial situation was risky. However, the directors did not demonstrate that they had assessed, addressed or mitigated the risks. The directors submitted that they viewed the risks as low but there was no contemporaneous evidence or credible basis to support their asserted belief.
The Company did not have any internal controls that were relevant and applicable to the Up Energy loans/payments and the securities transactions. All the directors failed to ensure that the Company had adequate and effective risk management and internal control systems. This was particularly serious as the Company had been warned by the Exchange in 2017 and had announced at the time that it had taken remedial action. However, the Exchange’s investigation found no evidence that any such remedial action had been taken.
Key messages:
Directors must exercise skill, care and diligence when entering into transactions. This should include careful consideration of the risks, particularly when the risks are evidently high.
Following any non-compliance with the Listing Rules, the directors must proactively take steps to remediate, and to ensure future compliance.
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