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. AustAsia Group Ltd. (Company);
IMPOSES A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT and CENSURE against:
2. Mr Edgar Dowse Collins, former executive director of the Company (Mr Collins);
3. Mr Chen Yuan, former chief financial officer and senior management of the Company (Mr Chen);
CENSURES:
4. Mr Tan Yong Nang, ED and chairman of the Company;
5. Mr Yang Ku, ED of the Company;
6. Ms Gao Lina, former ED and current non-executive director (NED) of the Company;
7. Mr Chang Pan, Peter, independent non-executive director of the Company;
8. Mr Hirata Toshiyuki, former NED of the Company; and
9. Mr Sun Lizhi, former financial controller and senior management of the Company (Mr Sun).
(The directors identified at (4) to (8) above are collectively referred to as the Relevant Directors)
AND FURTHER DIRECTS each of the Relevant Directors to attend training.
This case concerns the Company’s submission of outdated information during its listing application. Despite the availability of more up‑to‑date information on the Company’s status at the time and enquiries from the Exchange during its application process, the Company continued to file successive versions of a forecast for its financial year of 2022 (FY2022) with its listing application (Forecast Memorandum) that contained outdated and/or unjustified figures. The Company later admitted that the Forecast Memorandum was not tested against its most up‑to‑date financial performance known at the time and certain underlying assumptions were not reasonably justified.
Following its listing in December 2022, the Company announced its audited results for FY2022 on 1 March 2023. Compared with the last version of the Forecast Memorandum submitted to the Exchange prior to the listing, net profits fell short by 64.4% (by about US$42.4 million). This shortfall could be traced back to the use of outdated information in the Forecast Memorandum.
The Exchange found that:
- The Relevant Directors and Mr Collins were ultimately responsible for the accuracy and completeness of the Forecast Memorandum and were expected to take reasonable steps to monitor the listing application and ensure information provided to the Exchange remained up-to-date.
- Mr Collins, who was authorised by the board to review and submit documents to the Exchange for the purpose of the Company’s listing application, and Mr Chen, who was specifically hired to support the Company during the listing process, failed to comply with their responsibilities to review successive versions of the Forecast Memorandum and ensure the contained information was reflective of the Company’s latest operational and financial information available to them.
- Mr Sun, as financial controller in charge of the communication with the Company’s advisers, including the joint sponsors, failed to conduct an adequate review of certain drafts of the Forecast Memorandum before approving the same for submission.
- The Relevant Directors, who knew that the Company faced a deteriorating financial situation prior to the submission of the final version of the Forecast Memorandum, failed to review the final version and made no enquiries of Mr Collins or Mr Chen prior to submission of the same to the Exchange. They relied passively on management and the advisers instead of proactively verifying the submission’s information and assumptions.
All parties admitted their respective breaches of and/or liabilities under the Listing Rules during the Exchange’s disciplinary action. They accepted the sanctions and directions imposed by the Listing Committee.
Key messages:
A basic requirement for the Exchange’s effective vetting of any listing application is the submission of accurate and complete information that is up-to-date. The Exchange’s access to such up-to-date information on the applicant provides the basis for maintaining the quality of Hong Kong’s capital market and sustaining investor confidence in new listings.
During a listing application, the board and relevant members of management are ultimately responsible for the information submitted to the Exchange. They must use their best endeavours to procure the issuer’s compliance with the Listing Rules, including ensuring the Exchange is promptly provided with accurate, complete and up‑to‑date information about the applicant. Failure to discharge these responsibilities is serious and may result in disciplinary action.
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Note:
- 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 the Company or any of its subsidiaries by each of Mr Collins and Mr Chen may cause prejudice to the interests of investors.
Ends