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 A PREJUDICE TO INVESTORS’ INTERESTS STATEMENT and CENSURE against Mr Li Siu Bun, former chief financial officer and company secretary of CHK Oil Limited (Stock Code: 632).
Mr Li was found to have seriously and blatantly failed to discharge the duties and responsibilities expected of a chief financial officer and company secretary. As a result, he contributed to significant misstatements in the annual results of CHK Oil Limited (Company) for the year ended 31 December 2023, which in turn led to the Company’s breach of Rule 2.13(2). (Note 1)
The Company and its subsidiary (Group) are principally engaged in the exploitation and trading of oil and natural gas. The Group held an exploitation interest in certain oil and gas fields in the United States under leases granted by a local governmental bureau. In November 2022, the bureau terminated some of the leases (Termination), accounting for approximately 40% of the Group’s total assets for 2022.
Mr Li was aware of the Termination from at least January 2024 when he was copied on an email from a staff member in the US which referred to the Termination. In purported discharge of his duties, he forwarded the email to a director of the Company who, as the email stated, had been uncontactable and unresponsive when the staff member tried to contact him on matters relevant to the Termination and other urgent matters.
Despite the obvious materiality of the Termination, Mr Li:
- did not take steps to understand the circumstances of the Termination;
- did not escalate the Termination to the full Board, the audit committee or the auditors of the Company;
- remained silent on this matter even after the auditors, when auditing the Company’s financial statements for 2023, highlighted their difficulties in verifying the ownership of the oil wells under the leases; and
- when preparing the Company’s consolidated financial statements for 2023, continued to treat the terminated leases as assets of the Group, and caused or allowed the Company to publish its annual results and report for 2023 without disclosing the Termination or taking any account of its impact.
The Board became aware of the Termination in August 2024. On 27 September 2024, the Company announced restatements of the annual results for 2023, disclosing that its failure to exclude the terminated Leases from its published balance sheets had resulted in overstating the Group’s total assets as at 31 December 2023 by 58.1%. The annual results and report for 2023 were therefore materially inaccurate, incomplete and misleading, in breach of Rule 2.13(2).
The Exchange found that Mr Li was liable under Rule 2A.10B(3) for the Company’s breach of the Listing Rules. The Exchange considered that the occupying of the position of director or senior management of the Company or any of its subsidiaries by Mr Li may cause prejudice to the interests of investors.
Key messages:
Chief financial officers and company secretaries play a critical role in supporting directors in the discharge of their duties under the Listing Rules and in maintaining high standard of corporate governance and regulatory compliance.
In particular, chief financial officers are responsible for safeguarding the integrity of an issuer’s financial reporting. They must ensure that financial information presented to the board, auditors and the market is accurate, complete and not misleading.
Company secretaries are expected to ensure effective information flow within the board, advise directors on governance and Listing Rule matters, and ensure that board procedures and regulatory requirements are followed.
Directors are entitled to reasonably rely on the advice, recommendations and information provided by chief financial officers and company secretaries. Accordingly, these officers must exercise independent judgment, professional scepticism and due care in discharging their responsibilities.
Passive acceptance of information from management or reliance on others without appropriate enquiry is insufficient. Where concerns, irregularities or potential Listing Rule implications come to their attention, they are expected to make further enquiries, escalate matters to the Board where appropriate, and ensure that timely remedial actions are taken by the issuers.
Those who accept appointments as chief financial officers and company secretaries of listed issuers must recognise that these positions carry substantial regulatory responsibilities. The Exchange expects them to serve as active guardians of compliance and corporate governance, and is committed to hold accountable those whose acts or omissions undermine these objectives and prejudice the interests of investors.
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Note:
- For the Exchange’s action against CHK Oil Limited and a former director, see Statement of Disciplinary Action published by the Exchange on 3 March 2026.
Ends