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香港聯合交易所有限公司
(香港交易及結算所有限公司全資附屬公司)
THE STOCK EXCHANGE OF HONG KONG LIMITED
(A wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited)
The Stock Exchange of Hong Kong Limited
CENSURE:
1. Shanghai Henlius Biotech, Inc. (Stock Code: 2696); and
CRITICISES:
2. Dr Scott Shi-Kau Liu, former executive director and chief executive officer,
AND FURTHER DIRECTS:
Dr Liu to attend training.
The Company was found that on its first day of listing (25 September 2019), it entered into an investment management agreement, under which it engaged AMTD Global Markets Limited as asset manager, agent, and trustee to invest a sum of US$117 million on its behalf. This investment sum represented the entire IPO proceeds from placees arranged by AMTD as joint bookrunner, joint lead manager and underwriter of the Company’s IPO. The agreement contained provisions that “the term of the agreement is for two years, which will be automatically renewed unless agreed by both parties” and “during the term of the agreement, [the Company] cannot withdraw the invested sum”.
The use of IPO proceeds in this manner did not adhere to the intended use disclosed in its prospectus. The Company did not disclose the agreement in its listing documents. It also failed to announce the agreement or the use of IPO proceeds which did not adhere to the intended use of proceeds as detailed in the prospectus in a timely manner. The Company failed to disclose the amount involved in the agreement and its effect in its 2019 and 2020 annual reports.
Dr Scott Shi-Kau Liu was found to have approved an upfront payment of management fee to AMTD under the agreement. However, before approving the payment, he did not take adequate action to discharge his director’s duties. In particular, he did not examine the agreement or understand its nature and the parties’ respective rights and obligations. He failed to bring the matter to the Board for consideration or procure the Company to consult its compliance adviser. Had he done so, he should have (i) questioned whether the agreement and its terms were fair and reasonable and in the Company’s interest, (ii) noted such use of the Company’s IPO proceeds did not adhere to its intended use, and (ii) procured the Company’s compliance with the Listing Rules in relation to the agreement or the use of IPO proceeds in a manner different from that as detailed in the prospectus.
Both the Company and Dr Liu did not contest their respective breaches of the Listing Rules and accepted the sanctions and/or directions imposed on them.
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Directors of a listed issuer must, at all times, take sufficient proactive steps to safeguard the issuer’s interests and assets. In relation to the issuer’s proposed investments, this duty would include, among others, understanding the nature, the parties’ rights and obligations, and the issuer’s risk associated with the investment. They must also ensure the issuer’s compliance with the Listing Rules applicable to the proposed transaction, including the requirement to consult its compliance adviser for certain prescribed transactions if the issuer is newly listed. For a newly listed issuer, its directors must ensure adequate and effective internal controls to monitor the use of the issuer’s IPO proceeds and to prevent and detect any use which is contrary to the intended use. Any change in use must be carefully considered and justified to safeguard the issuer’s interests. They must also ensure that the issuer’s compliance adviser is consulted and adequate disclosure is made as required under the Listing Rules. Directors who fail to discharge their duties may result in the imposition of public sanctions under the Listing Rules. |
Ends
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