The Stock Exchange denounces Ligao Healthy Living (02370) and two executive directors for over $190 million in financial support without disclosing

Zhitong Finance App learned that on July 28, the Hong Kong Stock Exchange issued a disciplinary action statement, condemning Ligao Healthy Living (02370) and two current executive directors Tang Chengyong and Huang Yanwen, and further instructed Mr. Tang and Ms. Wong to complete 27 hours of training on regulatory and legal issues and compliance with the Listing Rules within 90 days from the date of publication of this Disciplinary Action Statement, including the following topics: (a) directors' duties; (b) “Corporate Governance Code”; and (c) “Listing Rules” (c) “Listing Rules”, “Code of Corporate Governance”; and (c) “Listing Rules”, “Listing Rules” 3. 14 and the provisions of Chapter 14A.

The disciplinary action stemmed from a series of illegal financial transactions that occurred after the company went public in 2022. The investigation found that without the board's knowledge, Tang Chengyong and Huang Yanwen prompted the company's subsidiaries to carry out multiple transactions to provide financial support totaling more than 190 million yuan to the parent group and several independent third parties, most of which were paid in cash. The company and its subsidiaries also borrowed approximately RMB 1029.5 million in bridging loans from the parent group.

The Stock Exchange determined that the company violated sections 3A.23, 13.13, 13.15, 14.34, 14A.34, 14A.34, 14A.35, 14A.36 and 14A.46 of the Listing Rules, involving failure to publish announcements, consult compliance advisors, and obtain shareholders' approval on various discloseable and related transactions as required.

Tang Chengyong and Huang Yanwen, as directors of the subsidiary involved, are the main persons responsible for these financial transactions and transactions, but have not informed the board of directors about the relevant transactions. The Exchange found that the two breached directors' duties, failed to act with due reasonable skill, prudence and diligence, and failed to do their best to induce the company to comply with the Listing Rules, in violation of sections 3.08 and 3.09B (2) of the Listing Rules.

The Exchange notes that the company confirmed that the company and its subsidiaries have fully recovered the financial support provided and have fully repaid the bridging loan.