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Hong Kong Court Bans China's Former Richest Man From Its Business World


09/05/2017


Hong Kong Court Bans China's Former Richest Man From Its Business World
Just banned from Hong Kong's business world is a Chinese entrepreneur Li Hejun, who briefly held the title of China’s richest man.
 
A ruling of being involved with the management or being a director of any Hong Kong listed or unlisted company for eight years was issued for Li by a Hong Kong court. as chairman of Hong Kong-listed Hanergy Thin Film, he had been found to be incompetent and negligent in his duties the court.
 
When the Hong Kong-listed subsidiary lost nearly half of its roughly $40 billion in market value in less than 30 minutes, headlines were made by both companies of Li - Hanergy, the parent firm which was also founded by him. the shares of Hanergy Thin Film indefinitely were suspended after Hong Kong's Securities and Futures Commission began an investigation about a week later.
 
In an arrangement that allows private mainland companies to access financing from the Hong Kong market without being subject to disclosure rules, the complicated relationship between Hong Kong-listed firms and their opaque Chinese parent companies were highlighted by the company's wild roller coaster ride.
 
Before their precipitous crash, there’re had been a rise of 600 percent in the shares of Hanergy Thin Film. Li was made China's richest man when the company was valued at over $45 billion at its peak in April 2015.
 
But investors and regulators were also concerned about market manipulation by its fast rise. And more so because Hanergy Thin Film had said 60 percent of its sales came from its parent company, Beijing-based Hanergy Holding, and therefore the company's business model wasn't new and hence it was unclear why investors were sending the stock price up. Li himself upped his own bet that shares of his solar company would take a tumble just five days before the crash which added to the mystery.
 
And shareholders may never get a clear answer — or their money because not much has been explained by the company to the investing public about what exactly happened since then.
 
"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 SFC has also said there is no assurance it will grant resumption of trade even as the company must submit a request to the SFC for shares to start trading again.
 
Hanergy Thin Film said it had terminated the four independent non-executive directors and confirmed the court ruling in an exchange filing.
 
A mainland subsidiary had given a loan of 900 million yuan (about $137.67 million) to an unlisted mainland parent firm, Hanergy Holding and the case also focused on those undisclosed loans. All due receivables will now have to be paid by Hanergy Holding.
 
"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."
 
(Source:www.cnbc.com)