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
IMPOSES A DIRECTOR UNSUITABILITY STATEMENT and CENSURE against:
- Mr Liang Guoxing, former chairman, chief executive officer and executive director of Silver Base Group Holdings Limited (Delisted, Previous Stock Code: 886); and
- Mr Liang Kunwei, former executive director.
The Director Unsuitability Statement is a statement that, in the Exchange’s opinion, Mr Liang Guoxing and Mr Liang Kunwei are unsuitable to occupy a position as director or within senior management of the Company or any of its subsidiaries.
In 2021, while the Company and its subsidiaries (Group) were facing serious liquidity issues, Mr Liang Guoxing and Mr Liang Kunwei, who are related as uncle and nephew, allowed and/or caused the Group to dissipate almost all of its cash and cash equivalents at the material time (about RMB566 million). Substantial prepayments were made by the Group within three months to three purchase agents, one of which was owned by Mr Liang Guoxing’s relatives. Some prepayments were made despite a written warning given by the Group’s finance department that they could impact on the Group’s liquidity. In the end, the purchase agents neither delivered the products nor refunded the prepayments, and the Company was ordered to be wound up by the court.
Mr Liang Guoxing and Mr Liang Kunwei failed to act in the interests of the Company and did not exercise reasonable skill, care and diligence in the prepayment transactions. They (1) did not conduct any substantive due diligence and/or risk assessments concerning the purchase agents or the prepayment transactions; (2) did not report to the Company’s board of directors (Board) before proceeding with the prepayment transactions; and (3) disregarded the clear conflicts of interest arising from the relationship between Mr Liang Guoxing and the connected purchase agent and did not make any report to the Board.
While the other directors of the Company repeatedly expressed concerns and requested regular updates on the prepayment transactions, Mr Liang Guoxing and Mr Liang Kunwei failed to disclose and/or report relevant prepayments to the Board in a timely manner.
The prepayment transactions constituted connected transactions under Chapter 14A of the Listing Rules, but Mr Liang Guoxing and Mr Liang Kunwei failed to procure the Company’s compliance with the relevant Rule requirements.
Mr Liang Kunwei did not respond to the Division’s investigation and reminder letters. He failed to cooperate in the investigation.
Directors are fiduciaries of listed issuers’ affairs and assets. They must safeguard the assets, act in the interests of the issuers and avoid actual or potential conflicts of interest and duty, especially in transactions involving significant payments.
Failure to discharge such duties could give rise to the Exchange’s concern about the directors’ suitability under the Listing Rules
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