The Stock Exchange of Hong Kong Limited, a subsidiary of Hong Kong Exchanges and Clearing Limited, has censured Link Holdings Limited and imposed a Prejudice to Investors’ Interests Statement against Mr. Ngan Iek, the former chairman and executive director, as well as Datuk Siew Pek Tho, the former executive director. The Exchange has also directed the company to conduct an independent internal control review. The statement and censure indicate that, in the Exchange’s opinion, the continued presence of Mr. Ngan and Datuk Siew on the board would have been detrimental to investors’ interests. The disciplinary action stems from the company’s misuse of funds raised through a bond issuance in June 2020. Instead of using the funds to redeem old bonds as announced, a significant portion was used to repay a shareholder loan from Mr. Ngan. The company subsequently defaulted on the old bonds without informing investors or making proper announcements, leading to a lack of transparency.
The Exchange emphasizes the importance of directors ensuring appropriate disclosures to investors and properly managing conflicts of interest. In this case, Mr. Ngan and Datuk Siew, who are brothers-in-law, failed to address the conflict of interest arising from the decision to repay Mr. Ngan instead of redeeming the old bonds. They also neglected to inform the other directors. The disciplinary action highlights the need for directors to fulfill their duties, make necessary disclosures, and involve other directors in decision-making processes, particularly when conflicts of interest arise, especially when company funds are directed to a director personally. The Statement of Disciplinary Action can be accessed on the HKEX website for more details.
Resources: https://www.hkex.com.hk/News/Regulatory-Announcements/2024/240516news?sc_lang=en