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Public Statement in respect of Mr. Kwong Wui Chun, Mr. Tse Nam Michael and Mr. Hung Pann Yi of Asia Aluminum Holdings Limited

Regulatory
17 Apr 2000

PUBLIC STATEMENT

in respect of
Mr. Kwong Wui Chun, Mr. Tse Nam Michael and Mr. Hung Pann Yi
(collectively, the "Executive Directors") of
Asia Aluminum Holdings Limited ("the Company")

The Stock Exchange of Hong Kong hereby publicly criticises each of the Executive Directors for breaches of the Exchange Listing Rules and the Declaration and Undertaking with regard to Directors given by each of the Executive Directors to the Exchange in the form set out in Appendix 5B to the Exchange Listing Rules.

At a disciplinary hearing held on September 21, 1999 and subsequently at a disciplinary (review) hearing held on March 21, 2000, the Listing Committee of the Exchange conducted disciplinary hearings into the conduct of, among other persons, the Executive Directors in respect of certain connected transactions, being those as publicly announced by the Company in its announcement of November 3, 1998, whereby loans constituting connected transactions under the Exchange Listing Rules were made by a wholly-owned subsidiary of the Company to an associate of a connected person of the Company prior to and after the listing of the Company on the Exchange on April 3, 1998. As at the date of the Announcement, the loans made, which together with accrued interest, amounted to approximately HK$12,438,470. Such amount represented about 2.1% of the net tangible assets of the Company and its subsidiaries as set out in the prospectus of the Company dated March 24, 1998.

It was stated in the Announcement that a wholly-owned subsidiary of the Company had been granting loans since February 26, 1998 to Majestic Holdings Limited. Majestic, a company incorporated in Hong Kong, was then held as to 85% of its equity interests by a substantial shareholder of a subsidiary of the Company who was also the brother-in-law of Mr. Kwong Wui Chun (the Chairman of the Company). Majestic was therefore an associate of a connected person of the Company for the purposes of the Exchange Listing Rules. Accordingly, the loans constituted connected transactions of the Company as acknowledged in its Announcement.

The Connected Transactions had not previously been disclosed in accordance with the requirements of Rules 14.25(1) and 14.29 of the Exchange Listing Rules prior to the Announcement being made by the Company.

The Listing Committee, having considered submissions from both the Listing Division and the relevant parties, has determined, among other things, that:

  1. the loans constituted connected transactions under Rule 14.25(1) of the Exchange Listing Rules and should have been disclosed by the Company in the Prospectus, and as it was not then by way of a press announcement as soon as possible after the listing of the Company on the Exchange;
  2. the Exchange should have been informed of the existence of the loans during the course of the listing process of the Company, and as it was not then immediately upon the listing of the Company pursuant to Rule 14.29 of the Exchange Listing Rules; and
  3. the Connected Transactions were in breach of Rules 14.25(1) and 14.29 of the Listing Rules, and paragraphs 2(3) and 3(1) of the Listing Agreement entered into between the Exchange and the Company prior to the listing of the Company on the Exchange.

The Listing Committee has concluded that by virtue of the said breaches of the Exchange Listing Rules and the Listing Agreement, each of the Executive Directors breached his Director's Undertaking whereby each of them undertook with the Exchange to comply to the best of his ability with the Exchange Listing Rules from time to time in force, and to use his best endeavours to procure that the Company would so comply; and further in failing to apply such degree of skill, care and diligence as may reasonably be expected of a person of his knowledge and experience and holding his office within the issuer, each of the Executive Directors thereby failed to comply with Rule 3.08 of the Exchange Listing Rules, in particular, sub-paragraph (f) thereof.

Accordingly, each of the Executive Directors is hereby publicly criticised by the Listing Committee for breaches of their respective Director's Undertaking and Rule 3.08 of the Exchange Listing Rules, in particular, sub-paragraph (f) thereof.

For the avoidance of doubt, the Listing Committee confirms that in relation to this matter it is not publicly criticising the Company, save for the Executive Directors.

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Corporate Communications

Updated 17 Apr 2000

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