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) Starjoy Wellness and Travel Company Limited, formerly known as Aoyuan Healthy Life Group Company Limited (Stock Code: 3662);
IMPOSES:
A DIRECTOR UNSUITABILITY STATEMENT1 and CENSURE against:
(2) Mr Guo Zi Ning, former chairman, CEO and non-executive director of Starjoy Wellness and former vice chairman, CEO and executive director of China Aoyuan Group Limited (Stock Code: 3883);
A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT2 and CENSURE against:
(3) Mr Chen Zhi Bin, former non-executive director of Starjoy Wellness and former CFO and executive director of China Aoyuan;
(4) Mr Zheng Wei, former executive director of Starjoy Wellness;
CENSURES:
(5) Mr Guo Zi Wen, non-executive director and former chairman and executive director of China Aoyuan;
(6) Mr Zhang Jun, former non-executive director and former executive director of China Aoyuan;
(7) Mr Ma Jun, former non-executive director and former executive director of China Aoyuan;
(8) Mr Chan Ka Yeung Jacky, former executive director of China Aoyuan;
(9) Mr Cheung Kwok Keung, independent non-executive director of China Aoyuan;
(10) Mr Hu Jiang, former independent non-executive director of China Aoyuan;
(11) Mr Ruan Yongxi, non-executive director of Starjoy Wellness;
(12) Mr Tao Yu, former executive director of Starjoy Wellness;
(13) Mr Hung Ka Hai Clement, independent non-executive director of Starjoy Wellness;
(14) Dr Li Zijun, independent non-executive director of Starjoy Wellness;
(15) Mr Wang Shao, independent non-executive director of Starjoy Wellness;
CRITICISES:
(16) Mr Lee Thomas Kang Bor, independent non-executive director of China Aoyuan,
AND FURTER DIRECTS:
- Each of Mr Guo ZW, Mr Zhang, Mr Ma, Mr Chan, Mr Cheung, Mr Hu and Mr Lee to attend 17 hours of training.
- Each of Mr Ruan, Mr Tao, Mr Hung, Dr Li and Mr Wang to attend 26 hours of training.
This case concerns the provision of RMB3.3 billion financial assistance by Starjoy Wellness3 to its then listed controlling shareholder, China Aoyuan, without complying with the Listing Rules. The financial assistance was provided through 147 transactions taking place between 1 January 2021 and 31 March 2022 when China Aoyuan was facing an imminent liquidity issue.
Starjoy Wellness’ Rule breaches were caused by the above directors’ failure to discharge their directors’ duties. In particular,
- Mr Guo ZN, being the mastermind behind the financial assistance, Mr Chen and Mr Zheng each approved a majority of the relevant transactions, without seeking approval from the board of Starjoy Wellness and procuring Starjoy Wellness to comply with the announcement, circular and independent shareholders’ approval requirements under the Rules. When giving the approval, they were aware of China Aoyuan’s liquidity issue and that the financial assistance would cause significant liquidity pressure on Starjoy Wellness.
- Being a director of both Starjoy Wellness and China Aoyuan, Mr Guo ZN and Mr Chen each failed to avoid or manage conflicts of interest and duty, and put the interests of China Aoyuan above those of Starjoy Wellness. Mr Zheng gave his approval simply because Mr Guo ZN had approved the same, without regard to the interests of Starjoy Wellness.
- Mr Ruan and Mr Tao, not being found to be involved in approving the relevant transactions, were, or at least ought to be, aware of the relevant transactions but did not take any or sufficient action to safeguard Starjoy Wellness’ interests or procure Starjoy Wellness’ compliance with the Rules.
- All the directors joined in this disciplinary action failed to ensure that China Aoyuan and/or Starjoy Wellness had in place adequate and effective internal controls.
Starjoy Wellness and the directors joined in this disciplinary action did not contest their respective breaches of and/or liabilities under the Listing Rules, and agreed to accept the sanctions and directions imposed on them.
Key messages:
Directors must act in good faith and in the interests of the issuer, but not the controlling or any specific shareholder of the issuer. Where an individual is a director of both the issuer and its shareholder, he/she must avoid conflicts between the shareholder’s interests and the issuer’s. To safeguard against abuse of powers, directors must ensure the issuer to have in place adequate and effective risk management and internal controls.
Directors are reminded that when approving a transaction, each of them must exercise his/her own judgment on whether the transaction is in the issuer’s interest. A director rubber-stamping a decision based on another management member’s prior approval without independent judgment of his/her own is a clear dereliction of director duties.
The Exchange will hold directors accountable for their failure to discharge these important duties. Such failure calls into question whether the individual concerned is suitable to be a director of the issuer.
|
Notes:
- The Director Unsuitability Statement is a statement that, in the Exchange’s opinion, Mr Guo Zi Ning is unsuitable to occupy a position as director or within senior management of (i) China Aoyuan or any of its subsidiaries, and (ii) Starjoy Wellness or any of its subsidiaries.
- The Prejudice to Investors’ Interests Statement is a statement that, in the Exchange’s opinion, the occupying of the position of director or senior management of:
(i) China Aoyuan or any of its subsidiaries, and Starjoy Wellness or any of its subsidiaries, by Mr Chen Zhi Bin; or
(ii) Starjoy Wellness or any of its subsidiaries by Mr Zheng Wei, may cause prejudice to the interests of investors.
- At the material time known as Aoyuan Healthy Life Group Company Limited.
Ends