Exchange’s Disciplinary Action against Xinming China Holdings Limited (stock code: 2699) and its executive director
Regulatory
08 Jan 2021
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 Listing Committee of The Stock Exchange of Hong Kong Limited (“The Exchange”)
CRITICISES:
- Xinming China Holdings Limited (Stock Code: 2699) (“Company”); and
- Mr Chen Cheng Shou, executive director (“ED”), Chairman and Chief Executive Officer of the Company (“Mr Chen”).
The Exchange found that:
- the Company failed to comply with the announcement, reporting, circular and shareholders’ approval requirements applicable to a major transaction carried out by its subsidiary in December 2018, thereby breaching the Listing Rules; and
- Mr Chen failed to discharge his duties as a director. In particular, he did not take any steps to ensure the Company would comply with the applicable procedural requirements after the major transaction was entered into.
Key messages:
Shareholders are entitled to information about, and if applicable vote on, material transactions carried out by the listed issuer. To safeguard the interest of the investing public, it is therefore of paramount importance that listed issuers comply with the procedural requirements set out in the Listing Rules. The Undertaking given by the directors to the Exchange also requires them to use their best endeavours to procure the listed issuer’s compliance with the Listing Rules.
Directors of a listed issuer must meet the required standard of skill, care and diligence under the Listing Rules when making investment decisions. They must also take proactive steps to ensure the assets of the company are protected.
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A copy of the Statement of Disciplinary Action is available on the HKEX website.
For the avoidance of doubt, the Exchange confirms that the sanctions in the Statement of Disciplinary Action apply only to the Company and Mr Chen, and not to any other past or present members of the board of directors of the Company.
Ends