香港聯合交易所有限公司
(香港交易及結算所有限公司全資附屬公司)
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) Xinyuan Property Management Service (Cayman) Ltd;
IMPOSES A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT against:
(2) Ms Wang Yan Bo, executive director;
(3) Mr Huang Bo, former executive director;
CENSURES:
(4) Mr Zhang Yong, non-executive director; and
(5) Ms Yang Yu Yan, non-executive director.
The statements made in respect of Ms Wang and Mr Huang above are made in addition to public censures against them. The Prejudice to Investors’ Statement is a statement that, in the Exchange’s opinion, had Ms Wang and Mr Huang remained on the Company’s board of directors, the retention of office by them would have been prejudicial to the interests of investors.
Shortly after the Company was listed in October 2019, the Company conducted ten notifiable and connected transactions, and one transaction via its joint venture company, with its majority shareholder, Xinyuan Real Estate Co., Ltd. and/or its subsidiaries. The transactions involved the outflow of significant sums totalling approximately RMB570 million, the majority of which in the nature of loans, deposits, and prepayments.
The notifiable and connected transactions were subject to the written agreement, announcement, circular and/or independent shareholders’ approval requirements, but the Company failed to comply. A RMB70 million loan from the joint venture company remains outstanding.
The above directors knew or ought reasonably to have known about the transactions at the time, given that Ms Wang and Mr Huang were involved in the internal approval process of all the transactions, and that Mr Zhang and Ms Yang occupied significant roles in both the Company and Xinyuan Real Estate. Mr Zhang was also involved in the internal approval process of one of the transactions.
In addition to failing to procure the Company’s compliance with the Listing Rules for the transactions, the directors breached their duties by failing to protect the Company’s interests. Issues of concern in respect of the transactions included the following:
- a lack of written agreements to protect the Company’s position;
- transactions conducted purely for the benefit of Xinyuan Real Estate; and
- transactions which appeared to lack business substance.
The Exchange notes that the Company and the directors contributed to an expedited resolution of the matter by accepting their breaches and agreeing to settle the disciplinary proceedings. Amongst other things, the directors have agreed to cease to hold any directorship and/or executive or management position in the Company’s group.
Key messages:
A company enters into a regulated environment on listing. The directors must ensure that the company’s funds are not used as if they were the controlling shareholder’s own, such as providing financial assistance to the controlling shareholder or parent company, without fully complying with the applicable Listing Rules.
Directors must act honestly and in good faith in the interests of the company when entering into transactions on behalf of the company. They must ensure the board is provided with appropriate information regarding transactions, and that there is compliance with disclosure and other requirements of the Listing Rules.
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