Search

China's former richest man now banned from Hong Kong's business world

Chinese entrepreneur Li Hejun, who briefly held the title of China's richest man, was just banned from Hong Kong's business world

A Hong Kong court ruled to disqualify Li from being a director or being involved with the management of any Hong Kong listed or unlisted company for eight years. That came as the court found him incompetent and negligent in his duties as chairman of Hong Kong-listed Hanergy Thin Film.

Li is also the founder of a parent firm, Hanergy, and both companies made headlines in May, 2015 when the Hong Kong-listed subsidiary lost nearly half of its roughly $40 billion in market value in less than 30 minutes. About a week later, Hong Kong's Securities and Futures Commission began an investigation and suspended the shares of Hanergy Thin Film indefinitely.

The company's wild roller coaster ride highlighted the complicated relationship between Hong Kong-listed firms and their opaque Chinese parent companies, an arrangement that allows private mainland companies to access financing from the Hong Kong market without being subject to disclosure rules.

Hanergy Thin Film's shares had soared more than 600 percent in 2015 before their precipitous crash. At its peak in April 2015, the company was valued at over $45 billion, making Li China's richest man.

But its fast rise also spurred concerns of market manipulation among investors and regulators. It was unclear why investors were sending the stock price up, as the company's business model wasn't new — Hanergy Thin Film had said 60 percent of its sales came from its parent company, Beijing-based Hanergy Holding. What added to the mystery was that Li himself upped his own bet that shares of his solar company would take a tumble just five days before the crash.

Since then, not much has been explained by the company to the investing public about what exactly happened, and shareholders may never get a clear answer — or their money.

"There is no guarantee that the trading of the Company's shares on the Stock Exchange will resume," Hanergy Thin Film said in an exchange filing posted Monday. The company must submit a request to the SFC for shares to start trading again, and the SFC has also said there is no assurance it will grant resumption of trade.

The case, which was brought to court by the SFC, also resulted in suspensions from management ranging from three to four years for four independent non-executive directors for incompetence and "a marked indifference to their responsibilities," according to the SFC.

Hanergy Thin Film confirmed the court ruling in an exchange filing, and said it had terminated the four independent non-executive directors.

The case also focused on undisclosed loans of 900 million yuan (about $137.67 million) by a mainland subsidiary to an unlisted mainland parent firm, Hanergy Holding. Hanergy Holding has been ordered to pay all due receivables.

"Li's breaches were not the result of incompetence or negligence only, as there was a clear conflict of interest situation," SFC said in a statement. "He also failed to exercise reasonable care and diligence in connection with an undisclosed loan of RMB900 million provided by a Mainland subsidiary of Hanergy to Hanergy Holding in March 2014."

Let's block ads!(Why?)

Read again China's former richest man now banned from Hong Kong's business world : http://ift.tt/2vHkfv9

Let's block ads! (Why?)



Bagikan Berita Ini

0 Response to "China's former richest man now banned from Hong Kong's business world"

Post a Comment

Powered by Blogger.