THE STOCK EXCHANGE OF HONG KONG LIMITED
(A wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited)
(the “Exchange”)
The Listing Committee of The Stock Exchange of Hong Kong Limited (the “Listing Committee”) censures Mr Zhu Jinkun (“Mr Zhu”), a former non-executive director of China Resources Microelectronics Limited (the “Company”) (Stock Code: 597) (resigned effective 24 August 2010), for breaching:
his obligations under the Declaration and Undertaking with regard to Directors given by him to the Exchange in the form set out in Appendix 5B to the Listing Rules (the “Undertaking”).
|
Facts
Rule A3(a)(ii) of the Model Code provides, among other matters, that a director must not deal in any securities of the listed issuer on any day on which its financial results are published and during the period of 30 days immediately before the publication date of the half-year results (the “Black-Out Period”).
According to the response to question 64 of “Frequently Asked Questions Series 8” (“FAQ No. 64”) accessible on the Exchange’s website, the starting date of the Black-Out Period does not change if the issuer decides to postpone publishing the results after it has notified the Exchange under Rule A3(b) of the Model Code. The Black-Out Period will be extended and end on the date of publication.
On 17 July 2009, the Company (through its solicitors) notified the Listing Division (the “Division”) that the Black-Out Period for directors’ dealings in the Company’s shares (the “Shares”) was expected to start on 21 July 2009 and end on 20 August 2009, being the expected publication date of the Company’s interim results for the six months ended 30 June 2009 (the “Interim Results”).
On the same date, the Company emailed all its directors informing them (among other matters) of the Black-Out Period, and reminding them that they should not deal in the Shares during that period.
According to the Disclosure of Interest Form 3A: Director’s / Chief Executive’s Notice filed by Mr Zhu on 29 July 2009 and 5 August 2009:
| (a) |
he disposed of 495,000 nil-paid rights shares of the Company at the average price of $0.01 per share on market on 24 July 2009;
|
| (b) |
he disposed of 9,335,000 Shares at the average price of $0.188 per share on market on 30 July 2009; and
|
| (c) |
his wife disposed of 288,000 Shares at the average price of $0.19 per share on market on 30 July 2009 (“Mrs Zhu’s Dealing”)
|
|
(collectively, the “Dealings”).
|
Publication of the Interim Results was postponed. On 8 September 2009 (at 7:57 pm), the Company announced the Interim Results.
Findings of breach by the Committee
The Listing Committee has considered the submissions of the Division and Mr Zhu and concluded as follows:
Breach of Rules A3, A6 and B8 of the Model Code
According to Rule A3(a)(ii) of the Model Code (and as elaborated in FAQ No. 64), the Black-Out Period in this case was from 21 July 2009 to 8 September 2009.
Rule A3 of the Model Code prohibits a director from dealing in the securities of the listed issuer during the Black-Out Period. Rule A6 provides that the restrictions on dealings by a director in the Model Code will be regarded as equally applicable to any dealings by his spouse.
Rule A6 of the Model Code further provides that it is the duty of a director to seek to avoid any dealing by his spouse at a time when he himself is not free to deal. Mr Zhu admitted that he inadvertently failed to take active steps to avoid Mrs Zhu’s Dealing as he had forgotten about the Black-Out Period and the Company’s reminder that he should not deal in the Shares during this period.
Rule B8 of the Model Code provides that a director must not deal in any securities of the listed issuer without first notifying in writing the chairman or a director designated for this purpose and receiving a dated written acknowledgement. Mr Zhu admitted that he inadvertently failed to do so in respect of any of the Dealings.
The Listing Committee concluded that Mr Zhu breached Rules A3, A6 and B8 of the Model Code as:
| (a) |
he and his wife conducted the Dealings during the Black-Out Period, and without Mr Zhu first notifying the Chairman or other designated director and obtaining a dated written acknowledgement; and
|
| (b) |
he failed to prevent Mrs Zhu’s Dealing during the Black-Out Period. |
Mr Zhu admitted that he inadvertently breached Rules A3, A6 and B8 of the Model Code.
Breach of Undertaking
In discharge of his Undertaking to comply with the Listing Rules to the best of his ability, Mr Zhu should have:
| (a) |
familiarised himself with the requirements of Rules A3, A6 and B8 of the Model Code;
|
| (b) |
taken proactive steps to ensure that any dealings in the Shares by him or his spouse did not fall within the Black-Out Period; and
|
| (c) |
notified the Chairman and received written acknowledgement from the Chairman before he dealt in the Shares. |
Mr Zhu failed to do so. He and his wife conducted the Dealings shortly after the Black-Out Period started, even though he was reminded by the Company that he should not deal in the Shares during the Black-Out Period.
The Listing Committee therefore concluded that Mr Zhu also breached his Undertaking for failing to comply with the Listing Rules to the best of his ability.
Settlement
Mr Zhu does not contest the breaches of Rules A3, A6 and B8 of the Model Code and his Undertaking, and accepts the sanctions imposed on him by the Listing Committee. The Division acknowledges that Mr Zhu has been co-operative with the Exchange in this matter.
Sanctions
Having made the findings of breach against Mr Zhu stated above and noting Mr Zhu does not contest the breaches, the Listing Committee censures Mr Zhu for his breaches of Rules A3, A6 and B8 of the Model Code and the Undertaking.
Further, the Listing Committee directs that, as a pre-requisite of any future appointment as a director of any company listed on the Exchange, Mr Zhu, who is currently not on the Board and is not a director of other companies listed on the Exchange, undergo 24 hours of training on Listing Rule compliance, director’s duties (including the Model Code requirements) and corporate governance matters to be given by the Hong Kong Institute of Chartered Secretaries, Hong Kong Institute of Directors or other course providers approved by the Division (the “Training”), to be completed before the effective date of any such appointment. Mr Zhu should provide the Division with the training provider’s written certification of full compliance with the Training requirement.
For the avoidance of doubt, the Exchange confirms that this public censure applies only to Mr Zhu personally and not to the Company or any other past or present members of the Board of Directors of the Company.
Ends