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:
- China Carbon Neutral Development Group Limited (Company, together with its subsidiaries, Group);
- Mr Di Ling, executive director (ED) and chief executive officer of the Company (Mr Di);
- Mr Lu Xiangyong, ED of the Company;
- Mr Zhong Guoxing, non-executive director and deputy chairman of the Company (Mr Zhong);
- Mr Wang Jiasi, independent non-executive director (INED) of the Company;
- Mr Sha Tao, former ED and chairman of the Company;
- Ms Lan Haiqing, former INED of the Company; and
- Mr Wang Anyuan, former INED of the Company.
AND FURTHER DIRECTS each of the above directors to attend training.
The Exchange’s investigation revealed that the Company’s second interim results and second interim report for the 12 months ended 31 December 2023 materially overstated its carbon-credit assets by HK$58.7 million. Consequentially, the Company’s fair value gain on carbon-credit assets was overstated and its loss was understated, both by the same amount of HK$58.7 million. Details are as follows:
- The Company reported that as at 31 December 2023, the amount of its carbon-credit assets was HK$69.4 million, representing a purported 680% year-on-year increase. The actual amount of the assets should be HK$10.7 million only and the overstatement of HK$58.7 million represented 48% of the Company’s reported equity value at the time.
- The Company also reported that for the 12 months ended 31 December 2023, the amount of its fair value gain on carbon-credit assets was HK$60.5 million when the actual amount should be HK$1.8 million only. As a result, the Company’s actual loss for the period should be HK$70 million as opposed to HK$11.3 million reported by the Company, representing an understatement of 519%.
The purported 680% year-on-year increase in the value of the Company’s carbon-credit assets should have alerted the above directors to its accuracy. Yet, the directors failed to take sufficient steps to review whether the assets were properly assessed, rendering the information contained in its interim results and report to be inaccurate in material respects or misleading in breach of Rule 2.13 of the Listing Rules.
Separately, the Exchange also conducted an investigation into the Company’s advance payment of RMB33.8 million to a service supplier in October 2023 and the Company’s acquisition of a Chinese Mainland company at a cost of HK$30 million in March 2024. The Exchange found that the Company had failed to disclose the two sets of transactions in a timely manner in breach of Chapters 13 and 14 of the Listing Rules. Mr Di Ling and Mr Zhong Guoxing approved the transactions, but they had either mistakenly assessed or overlooked the relevant Listing Rule implications.
Key messages:
The information contained in all corporate communications of a listed issuer, including its interim results and reports, must be accurate and complete in all material respects and not be misleading or deceptive.
It is the directors’ responsibility to exercise reasonable skill, care and diligence when reviewing and approving financial statements. Directors are expected to identify unusual or material changes in the issuer’s financial information, and make all necessary enquiries with the management to ensure accuracy of the information before disclosure.
Directors are also obliged to properly assess the Listing Rule implications when entering into transactions, and procure the issuer to comply with the Listing Rules.
|
The Statement of Disciplinary Action is available on the HKEX website.
Ends