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
CRITICISES:
Mr Chan Cheuk Yin, non-executive director;
AND FURTHER DIRECTS:
Mr Chan to attend training.
Mr Chan failed to disclose his interests in his son’s competing business.
The Company was family-run when it was listed on the Exchange in December 2005. Before the Company was listed, each family member, including Mr Chan, undertook not to be interested or involved in any business that would likely compete with the Company group.
However, in late 2013, Mr Chan personally provided initial funding of $180 million to his son to set up his own property development business in China. The son’s business potentially competed with that of the Company.
Between 2014 and 2019, Mr Chan provided nearly $2 billion of funding and financial guarantees for his son’s business. He also acted as a director of companies within his son’s business group.
Throughout that time, Mr Chan did not disclose to the Company’s board his interests in, and financial support to, his son’s business. This included a failure to disclose when the Company considered and ultimately entered into a release of the family members from the non-competition undertaking in 2014.
The Exchange notes that Mr Chan has contributed to an expedited resolution of the matter by agreeing to settle the disciplinary proceedings.
Key messages:
Proper handling of potential conflicts of interest is a fundamental element of good corporate governance. Given its importance, directors are under broad-ranging obligations to avoid or transparently manage even an indirect risk of conflict.
Directors should ensure they are fully aware of the expectations on them regarding potential conflicts of interest, and should make open and early disclosure of anything which might be considered a conflict, even if the possibility of an actual conflict is considered remote.
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