Date Company/ Name Breach Conduct Disciplinary Actions
20 July 2018
• SRE Group Limited (“Company”)

• Mr Shi Jian (“Mr Shi”), former executive director and Chairman of the Company

• MLR14.34

• MLR14.38A

• MLR14.40

• MLR14A.35

• MLR14A.36

• MLR14A.46

• MLR14A.49

• MLR14A.60(1)

• MLR3.08(c), (e) and (f)

• Director’s Undertaking

                       
• Company failed to comply with the announcement, circular and shareholders’ approval requirements in relation to certain financing transactions.

• Mr Shi failed to discharge his responsibilities under the Exchange Listing Rules and failed to use his best endeavours to procure the Company’s Exchange Listing Rule compliance.

          
                      
REGULATORY MESSAGE:

The Exchange Listing Rule provisions on notifiable and/or connected transactions are designed to safeguard and protect investors and shareholders. The Exchange views the failure to comply with these provisions seriously.

In this case, the Company entered into a number of financing transactions with third party financial institutions to guarantee the repayment obligations of certain loans or contingent liabilities owed by connected persons at the relevant time. The connected persons were all related to a former Executive Director of the Company, who was also the Company’s founder, and its Chairman and controlling shareholder at the relevant time.

A director has responsibility to be answerable to the issuer for the application of its assets and to put connected transactions forward for Board approval. Shareholders’ approval should also be obtained where required, before such transactions are entered into and executed.

Repeated non-compliance with an issuer’s internal control policies by a director indicates a serious concern as to the director’s ability to discharge his responsibilities under the Exchange Listing Rules, such that the retention of office by that director is prejudicial to the interests of investors.

SANCTIONS:


Public Statement Involving Criticism of

• SRE Group Limited

Public Censure of

• Mr Shi Jian

with a statement that in the Exchange’s opinion, by reason of Mr Shi’s failure to discharge his responsibilities under the Exchange Listing Rules, had Mr Shi remained in office, his retention of office would have been prejudicial to the interests of investors.

DIRECTIONS:

• Mr Shi to attend the training on Exchange Listing Rule compliance and directors’ duties as described in the news release.

NEWS RELEASE:

http://www.hkex.com.hk/News/News-Release/2018/180720news?sc_lang=en