The Hong Kong Securities and Futures Fee (SFC) immediately obtained disqualification orders within the Courtroom of First Occasion in opposition to the previous chairman, Mr Li Hejun, and 4 present unbiased non-executive administrators, Ms Zhao Lan, Mr Wang Tongbo, Mr Xu Zheng and Mr Wang Wenjing, of Hanergy Skinny Movie Energy Group Restricted (Hanergy).
Li was disqualified from being a director or being concerned within the administration of any listed or unlisted company in Hong Kong for eight years. He was additionally ordered to obtain Hanergy’s guardian firm, Hanergy Holding Group Restricted (Hanergy Holding) and/or its associates to pay all excellent receivables as a result of Hanergy underneath varied gross sales contracts.
The Courtroom has additionally ordered that each Zhao and Wang Tongbo be disqualified for 4 years and Xu and Wang Wenjing be disqualified for 3 years.
On the idea of Li’s admissions, the Courtroom discovered that his breaches of duties had been of a really critical nature, having regard to:
- his place because the chairman and government director of Hanergy and the last word controller of each Hanergy and Hanergy Holding, which created a patent and critical battle of pursuits;
- the very substantial quantities concerned; and
- the time period over which the breaches of duties occurred.
The Courtroom held that Li’s breaches weren’t the results of incompetence or negligence solely, as there was a transparent battle of pursuits state of affairs and Li plainly most well-liked the pursuits of Hanergy Holding and associates to that of Hanergy. He additionally didn’t train affordable care and diligence in reference to an undisclosed mortgage of RMB900 million offered by a Mainland subsidiary of Hanergy to Hanergy Holding in March 2014. Hanergy didn’t disclose the mortgage to its shareholders and to hunt their approval in accordance with the Itemizing Guidelines.
The Courtroom agreed that, on the idea of their admissions, Zhao, Wang Tongbo, Xu and Wang Wenjing weren’t solely incompetent however in addition they exhibited a marked indifference to their duties as administrators, specifically they:
- didn’t make acceptable disclosure in regards to the viability of Hanergy’s enterprise mannequin which an inexpensive director ought to have questioned;
- didn’t correctly assess the monetary positions of the related events and therefore the recoverability of the receivables due from them because of these related transactions; and
- didn’t take correct steps to get better these receivables, and so didn’t act in Hanergy’s finest curiosity.
Listed firm administrators ought to at all times put the corporate’s pursuits first. On this case, these administrators flouted their duties by placing the pursuits of related events earlier than that of the listed firm. The SFC will proceed to take motion to carry listed firm administrators accountable for company misconduct,” Mr Thomas Atkinson, the SFC’s Government Director of Enforcement mentioned.
On 15 July 2015, the SFC suspended buying and selling within the shares of Hanergy. The buying and selling suspension stays in place. Hanergy has indicated its intention to hunt a resumption of the buying and selling in its shares. Hanergy is required to submit a disclosure doc to the Board of the SFC for it to contemplate Hanergy’s request for resumption of buying and selling. The disclosure doc ought to present detailed data on the corporate, its actions, enterprise, property, liabilities, monetary efficiency and prospects to handle the SFC’s considerations that led it to droop buying and selling in Hanergy’s shares. There is no such thing as a assurance that the SFC Board will agree that the buying and selling of Hanergy’s shares on the Inventory Change of Hong Kong Restricted (SEHK) might resume.