Exchange’s Disciplinary Action against Two Former Directors of Ourgame International Holdings Limited (Stock Code: 6899)

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 DIRECTOR UNSUITABILITY STATEMENT against:
(1) Madam Fu Qiang, former non-executive director of the Company;

CRITICISES:
(2) Mr Yang Qing Eric, former Chairman and executive director of the Company; 

The statement made in respect Madam Fu above is made in addition to a public censure against her. The Director Unsuitability Statement is a public statement that, in the Exchange’s opinion, Madam Fu is unsuitable to occupy a position as director or within senior management of the Company or any of its subsidiaries.

AND FURTHER DIRECTS: 
Mr Yang to attend 15 hours of training.


In early 2018, the Company granted loans totalling over $62 million to a borrower introduced by the Company’s substantial shareholder, Irena Group Co. Ltd. Madam Fu was a substantial shareholder of Irena Group. Mr Yang was responsible for arranging and approving the loans. Both directors failed to discharge their duties, as described below.

Mr Yang did not conduct any due diligence in respect of the borrower. He approved the loans on the understanding that they were to be guaranteed by Irena Group, but he did not take proper steps to follow up on this, and no guarantee was in fact provided. He failed to exercise proper care and diligence in respect of the execution, management, and oversight of the loans.

The borrower defaulted.

Irena Group then arranged for a third party to take over the obligation to repay the loans. Madam Fu, who denied prior knowledge of the loans, also provided a personal guarantee with respect to the third party’s obligations.  It later emerged that Madam Fu had purported to waive the third party’s repayment obligations to the Company under a separate agreement. There was no apparent commercial rationale for these arrangements. The Company took the view that Madam Fu had misappropriated the funds through the loans and via the borrower.  Madam Fu did not provide any substantive response to the Exchange’s investigation.

The Exchange notes that Mr Yang has contributed to an expedited resolution of the matter by agreeing to settle the disciplinary proceedings against him.

Ends