Exchange’s Disciplinary Action against Seven Current and Former Directors of Christine International Holdings Limited (Stock Code: 1210)

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

IMPOSES A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT against:
(1) Mr Lo Tien An, former executive director and chairman;
(2) Mr Zhu Nian Lin, former independent non-executive director;

CENSURES:
(3) Mr Chou Chi Ming, former non-executive director;
(4) Ms Su Wan Wen, former independent non-executive director;

CRITICISES:
(5) Mr Hung Dun Ching, non-executive director;
(6) Mr Luo Wei De, former independent non-executive director; and
(7) Mr Gao Hai Ming, former independent non-executive director;

AND FURTHER DIRECTS:
each of the above directors (except Mr Lo and Mr Zhu) to attend training.

The statement made in respect of Mr Lo and Mr Zhu above is made in addition to a public censure against each of them. The Prejudice to Investors’ Interests Statement is a statement that, in the Exchange’s opinion, had Mr Lo and Mr Zhu remained on the board of directors of the Company, the retention of office by them would have been prejudicial to the interests of investors.

In 2012, the Company purchased food production equipment from an entity wholly owned by Mr Lo’s sister. The Company paid the full purchase price of RMB18.15 million, but did not take delivery of the equipment, or complete the formalities to obtain legal title in the equipment.

This position was allowed to persist for several years, with the purchase payment treated as a prepayment in the Company’s financial statements from 2012 to 2018. One of the reasons given for the Company’s inaction was because the sister’s entity was in financial difficulty.

Despite this known financial difficulty and the outstanding sum due to the Company, the Company made a series of further prepayments to the sister’s entity from 2017 to 2019, in connection with contracts for food processing services. The total prepayment for these services was maintained at about RMB22 million through this period.

The sister’s business did not recover from the financial difficulty, and was deregistered in 2020. The Company wrote off RMB35 million in respect of the payment for the equipment and the prepayments for the food processing.

Mr Lo initiated, and was primarily responsible for, the equipment purchase and the procurement of the food processing services from his sister’s entity. Despite the conflict of interest, he allowed his sister’s entity to take advantage of the Company, and he failed to safeguard the Company’s interests and assets. 

The other directors failed to monitor and follow up with Mr Lo and the Company’s management in respect of the equipment purchase and/or the processing prepayments. Mr Zhu also failed to cooperate with the Exchange’s investigation.

Ends