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:
- Sterling Group Holdings Limited (Stock Code: 1825);
- Ms Wong Mei Wai Alice, executive director, chairperson and chief executive officer;
- Mr Siu Yik Ming, executive director; and
- Mr Chung Sam Kwok Wai, former executive director,
AND FURTHER DIRECTS Ms Wong, Mr Siu and Mr Chung to attend training.
The Company was found to have breached the Listing Rules in relation to financial assistance it provided to (i) a customer, (ii) Ms Wong and (iii) Mr Siu, all of whom being its connected persons. This was caused by the failure on the part of Ms Wong, Mr Siu and Mr Chung to procure the Company to comply with the applicable announcement, circular and independent shareholders’ approval requirements under the Listing Rules, in respect of the following transactions:
- Four letters of supports from the Company (signed by Ms Wong and/or Mr Chung on its behalf), agreeing to continue supplying inventories to the customer and not to collect any trade receivables from the customer until the customer succeeded in its IPO on the NASDAQ and received the IPO proceeds.
- Interest-free and unsecured advances of US$4.2 million from the Company (procured by Ms Wong and Mr Chung) to the customer, without any written agreement or fixed repayment dates.
- Payments of US$700,000 by the Company for subscribing the customer’s shares, in the names of Ms Wong and Mr Siu. The payments together with interest were fully repaid by Ms Wong and Mr Siu around a week thereafter.
The parties explained that the customer, which had been a customer of the Group for decades, encountered liquidity issues at the material time, and that the transactions were intended to provide financial support (including supporting the customer’s IPO application) for the customer to raise the necessary capital to revitalise its operations and in turn enhance the Company’s recoverability of outstanding receivables from the customer.
The parties acknowledged their failure to identify that at the time of some of the transactions, the customer was a connected person of the Company under the Listing Rules as the owner of the customer was a director of the Company within 12 months before the relevant transactions, hence the above financial assistances provided to the customer and the sales of inventories to it during the relevant period were connected or continuing connected transactions subject to the Listing Rule requirements.
The Company, Ms Wong, Mr Siu and Mr Chung admitted their respective breaches of the Listing Rules at an early stage of the Exchange’s investigation and accepted the sanction and/or directions imposed on them.
Key messages:
Every director is required to comply to the best of his/her ability with the Listing Rules, and use his/her best endeavours to procure the issuer to comply with them. For this purpose, he/she must:
- understand and, at all times, be aware of their responsibilities as a director of a listed issuer under the Listing Rules; and
- ensure that the listed issuer has in place adequate and effective risk management and internal control systems to identify the applicable Listing Rule requirements and comply with the Listing Rules.
Directors are specifically reminded that whilst financial assistance may be considered justified with commercial reasons and/or intended only to serve a short-term financing purpose, this does not override the obligations of issuers and their directors to strictly comply with the Listing Rules.
Financial assistance not compliant with the Listing Rules may give rise to concerns about misappropriation or misapplication of the issuer’s assets and may warrant the most severe disciplinary sanction under the Listing Rules.
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