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 DIRECTOR UNSUITABILITY STATEMENT against Mr Tse Ke Li, former executive director.
The statement made in respect of Mr Tse is made in addition to a public censure against him. The Director Unsuitability Statement is a public statement that, in the Exchange’s opinion, Mr Tse is unsuitable to occupy a position as director or within senior management of the Company or any of its subsidiaries.
In July 2020, a subsidiary of the Company made three acquisitions totaling RMB42.7 million. Shortly after, in August 2020, the balance in the subsidiary’s bank account amounting to approximately HK$11.2 million was withdrawn in its entirety. The acquisitions and cash withdrawals were not authorised by the Company’s board of directors and led to an impairment loss of around HK$58.7 million in aggregate.
At the time of the acquisitions and cash withdrawals, Mr Tse had overall supervision and oversight of the business and affairs of the subsidiary. An independent investigation commissioned by the Company concluded that Mr Tse was involved in and/or had knowledge of the acquisitions and cash withdrawals.
There is no evidence of Mr Tse obtaining information about the acquisitions, despite their questionable legitimacy. Instead, Mr Tse appeared to have actively concealed the acquisitions. He also allowed the cash withdrawals to occur without the supporting documents normally required for such payments.
Mr Tse also failed to cooperate with the Exchange’s investigation.
Key messages:
Directors must ensure that there is appropriate oversight of a subsidiary’s affairs. An effective control environment must extend to the subsidiary level.
Knowingly allowing unauthorised transactions to take place, or facilitating their concealment, is considered serious misconduct and may lead to the imposition of severe sanctions.
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