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) REXLot Holdings Limited (Delisted, Previous Stock Code: 555);
IMPOSES A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT against:
(2) Mr Chan Victor How Chung, executive director at the date of delisting;
CRITICISES:
(3) Mr Boo Chun Lon, executive director at the date of delisting;
(4) Mr Yuen Wai Ho, non-executive director at the date of delisting (formerly an independent non-executive director);
(5) Mr Chow Siu Ngor, independent non-executive director at the date of delisting;
(6) Mr Lee Ka Lun, former independent non-executive director of the Company.
The statement made in respect of Mr Chan above is made in addition to a public censure against him. The Prejudice to Investors’ Interests Statement is a statement that, in the Exchange’s opinion, had the Company remained listed, the retention of office by him would have been prejudicial to the interests of investors.
AND FURTHER DIRECTS:
Each of Mr Boo, Mr Yuen, Mr Chow and Mr Lee to attend training.
Between 2013 and 2019, the Company and the directors committed several Rule breaches in connection with the Company’s online lottery business. These included:
(a) inaccurate disclosures in the financial statements in respect of non-wholly-owned subsidiaries in the Company’s group, including a joint venture over which the Company lost control;
(b) payment of earnest money of RMB 210 million on behalf of a business partner, in respect of a proposed joint investment which ultimately did not proceed;
(c) payment of deposits of about HK$2 billion for potential acquisitions and joint venture projects, none of which ultimately proceeded; and
(d) failure to publish on time several sets of results and reports.
Of the payments in (b) and (c) above, there were no or very limited safeguards in place, and only a small fraction has been recovered.
Mr Chan was primarily responsible for the online lottery business, and the payments of the earnest money and deposits in particular.
The other directors ratified and approved the deposits without requesting information about the due diligence conducted or whether any safeguards had been established.
Key messages:
All directors (including non-executive directors and the audit committee) have a responsibility to oversee the issuer’s business and operations, and to ensure that the company’s interests are properly safeguarded.
Particular caution is needed, and a check and balance mechanism, when individual directors have been given wide authority to commit the company’s assets.
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