The Stock Exchange of Hong Kong Limited censures three directors of XinMing China Holdings Limited (stock code: 2699) and directors three directors to attend training. This matter concerns an impairment loss of RMB 49.4 million caused by a number of loans obtained by one of the Company’s subsidiaries.
The directors in question failed to inform the Board about the loans and the lenders’ demand for a retroactive 24 per cent default interest rate when the loans became overdue. They disregarded the internal control procedures put in place by the Company, and failed to keep proper documentation in respect of the loans. The directors admitted that they failed to exercise due skill, care and diligence in respect of the loans, and accepted the sanctions and directions imposed by the Listing Committee.
Directors should ensure that transactions carried out by a listed issuer or its subsidiaries are compliant with internal control policies, and in any event that material matters are brought to the attention of the Board for consideration and approval.
Resources:
https://www.hkex.com.hk/News/Regulatory-Announcements/2024/240220news?sc_lang=en