Exchange’s Disciplinary Action against Three Current Directors of Xinming China Holdings Limited (Stock Code: 2699)
Regulatory
20 Feb 2024
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:
- Mr Chen Chengshou, executive director, Chairman and CEO;
- Mr Feng Cizhao, executive director;
- Ms Gao Qiaoqin, non-executive director;
AND FURTHER DIRECTS:
each of the above directors to attend training.
This matter concerns an impairment loss of RMB 49.4 million caused by a number of loans obtained by one of the Company’s subsidiaries.
The directors in question failed to inform the Board about the loans and the lenders’ demand for a retroactive 24 per cent default interest rate when the loans became overdue. They disregarded the internal control procedures put in place by the Company, and failed to keep proper documentation in respect of the loans.
The directors admitted that they failed to exercise due skill, care and diligence in respect of the loans, and accepted the sanctions and directions imposed by the Listing Committee.
Key messages:
Directors should ensure that transactions carried out by a listed issuer or its subsidiaries are compliant with internal control policies, and in any event that material matters are brought to the attention of the Board for consideration and approval.
A director of a listed issuer should also take active steps to manage actual or potential conflicts of interest, such as when acting in another capacity in a transaction involving the listed issuer.
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