THE STOCK EXCHANGE OF HONG KONG LIMITED
(A wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited)
The Listing Committee of The Stock
Exchange of Hong Kong Limited
(the "Listing Committee")
criticises
Chow Sang Sang Holdings International Limited (the "Company")
for breaching the Exchange Listing Rules
At a disciplinary hearing held on 4 October 2005, the Listing Committee conducted a hearing into possible breaches of the Exchange Listing Rules by the Company of its obligations under the then Rule 14.25(1) of the Exchange Listing Rules.
Facts
The Listing Division alleged that the Company breached Rule 14.25(1) (in force prior to 31 March 2004) in relation to four categories of connected transactions "due to inadvertent oversight" as the total consideration or value of each of these categories (the "Transactions") exceeded the higher of $1 million or 0.03 per cent of the Company's net tangible assets ("NTA") (but not exceeding the higher of $10 million or 3 per cent of the Company's NTA) in different periods of time since 1991, 2002 and 2003.
Pursuant to the then Rule 14.25(1), the Company should have published an announcement as soon as possible and include details of the Transactions in its next published annual report.
The Transactions were as follows:
The details of the Transactions were only published in 2004 in the Company's announcement dated 30 March 2004.
The Decision
The Listing Committee concluded that the Company breached the then Rule 14.25 of the Exchange Listing Rules in respect of each of the Transactions. The Listing Committee decided to impose a public statement which involved criticism on the Company for the said breaches.
Head of Listing, Richard Williams said, "The importance to issuers of establishing compliance structures adequate to ensure compliance with regulatory obligations has been a prominent and recurrent theme of a number of press releases concluding disciplinary action brought by the Exchange. Of equal importance to the creation of those systems is their effective use. Listed issuers should assess transactions with connected parties against those structures and in the case of ongoing transactions they should be monitored regularly to ensure compliance with disclosure and other obligations."