CENSURE in respect of Daniel Hui Chuen Kin (Mr Hui), Chairman and Executive Director of International Capital Network Holdings Limited (the Company) who resigned on 11 August 2003 and Michael Lui Bing Kin (Mr Lui), and Executive Director of the Company who resigned on 20 December 2002
Regulatory
04 Dec 2003
THE STOCK EXCHANGE OF HONG KONG LIMITED
(A wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited)
CENSURE
in respect of
Daniel Hui Chuen Kin (Mr Hui), Chairman and Executive Director of
International Capital Network Holdings Limited
(the Company)
who resigned on 11 August 2003
and
Michael Lui Bing Kin (Mr Lui), an Executive Director of the Company
who resigned on 20 December 2002
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The Stock Exchange of Hong Kong Limited (the Exchange) hereby publicly censures Mr Hui and Mr Lui in relation to the failure of the Company to announce that it had executed two transactions in the period 7 October 2002 to 24 October 2002 which resulted in HK$30.2 million of the Company's cash reserves of HK$40 million (together "the Advances") being advanced to third parties. As a consequence, Mr Hui and Mr Lui breached their Director's Undertaking by causing the Company to breach Growth Enterprise Market (GEM) Listing Rules 17.10 and 17.15, which required the Company to issue an announcement concerning the Advances at the time they were effected. Mr Hui and Mr Lui also breached their Director's Undertaking and duties as directors as set forth in Rule 5.01(6).
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The relevant conduct was as follows:
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On 5 September 2002, Koffman Securities Limited made a voluntary general offer for the Company and issued an offer document on 10 October 2002.
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On 3 October 2002, Mr Hui and Mr Lui, as members of the Board of International Capital Finance Limited ("ICN Finance"), a wholly owned subsidiary of the Company, approved a contract with Mutual Well International Limited ("Mutual Well") which committed ICN Finance to advance HK$20 million for the establishment of offices in the People's Republic of China. On 9 October 2002 and 24 October 2002, Mr Lui signed cheques for HK$12 million and HK$8 million respectively in payment of the advance to Mutual Well.
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On 4 October 2002, Mr Hui and Mr Lui, as members of the Board of Top Advance (HK) Limited ("Top Advance"), another wholly owned subsidiary of the Company, approved a loan to JQK Investment Limited ("JQK"), a BVI Company. On 8 October 2002 and 9 October 2002, Mr Lui authorised the drawdown of HK$5.15 million and HK$5.09 million respectively to JQK under the loan facility.
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As a consequence of these advances, the Company's cash reserves of HK$40 million were depleted by more than HK$30 million.
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On 28 October 2002, Mr Hui as a member of the Board authorised the publication of the Company's annual results which omitted any reference to the advances to Mutual Well and JQK as post-balance date events.
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On 19 November 2002, the Company made an announcement that made reference to the advances to Mutual Well and JQK.
Without admission of liability or wrongdoing and without contesting the allegations of the Exchange, Mr Hui and Mr Lui have undertaken to the Exchange that they will not seek to be directors of a company issuing securities on a market operated by the Exchange for a period of three years.