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) S&S Intervalue China Limited, formerly known as China Futex Holdings Limited (Delisted, Previous Stock Code: 8506);
IMPOSES A DIRECTOR UNSUITABILITY STATEMENT against:
(2) Mr CHEN Yi Hui, former executive director;
(3) Ms YUAN Yuan, former executive director, chairlady, CEO and compliance officer;
(4) Dr HU Xu Dong, former independent non-executive director;
CENSURES:
(5) Mr SHUM Shing Kei, independent non-executive director (as at the date of delisting);
(6) Dr MU Zhi Rong, former independent non-executive director.
AND FURTHER DIRECTS:
Mr Shum and Dr Mu to attend training.
The statement made in respect of Mr Chen, Ms Yuan, and Dr Hu above is made in addition to a public censure against each of them. The Director Unsuitability Statement is a statement that, in the Exchange’s opinion, Mr Chen, Ms Yuan and Dr Hu are unsuitable to occupy a position as director or within senior management of the Company or any of its subsidiaries.
During 2018 to 2020, the Company’s subsidiary entered into a series of unauthorised transactions under which it provided financial assistance to third parties. There was no justifiable commercial reason for the transactions, and they resulted in significant loss, which could potentially reach close to RMB 200 million.
The Company breached the Listing Rule requirements in respect of the transactions, including failing to make appropriate disclosures to investors and to obtain shareholder approval.
Mr Chen and Ms Yuan were responsible for the transactions. They did not conduct any due diligence, and they did not inform the Board about them.
Even though the other directors had no knowledge about the transactions, they were found to have breached their directors’ duties as a result of their failures of oversight and proactivity in respect of the Company’s internal controls. Amongst other things, monthly updates were not provided to the Board, and deficiencies identified in a control review were left unaddressed.
The material deficiencies in the controls contributed to the Company’s Rule breaches and the Board’s inability to prevent and/or timely identify the unauthorised transactions.
Key messages:
Directors, whether executive or non-executive, are collectively and individually responsible for overseeing the company’s corporate governance matters. Even where non-executive directors are not involved in the day-to-day operations, they are expected to proactively seek sufficient information for the proper discharge of their directors’ duties.
The directors should conduct regular reviews of the company’s internal controls. To ensure the review is effective, they must also follow up diligently on any potential internal controls weaknesses which are identified.
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