China GasIndustry Investment Holdings Co. Ltd. (Stock Code: 1940), the Company used a substantial proportion of its funds shortly before and after listing to provide three unsecured loans and subscribe for a loan note. There was no disclosure of the transactions, or their potential risks, in the prospectus. As a result, the prospectus was misleading.
Thedirector failed to discharge duties and obligations in approving the transactions and in proposing the draft put option agreement. He also failed to protect the Company’s interest and to use his best endeavours to procure the Company’s Listing Rule compliance in respect of the transactions and/or their disclosure.
TheCompany and its former director accepted their respective breaches and reached a settlement with the Listing Division in this case.
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