Chim Pui-chung, a two-term former Legislative Councillor, and a cancer survivor, revels in a Hong Kong Stock Exchange’s inability to delist a stock.
The Mandarin Resources Corp., in that Chim was authority and director, binds a record for a duration that any company’s batch had remained untraded on a Hong Kong bourse: 14 years.
Trading in Mandarin’s batch was dangling from 1986 by 2000 while Chim was sealed in a authorised conflict with a Securities Futures Commission involving allegations that he done unsreasonable exchange to advantage himself during a responsibility of other tiny shareholders.
In a indirect trial, a decider found that Chim had intent in control that was unjust to a interests of minority shareholders. Chim was sequence to compensate remuneration to a these shareholders by repurchasing their shares during a “fair value”, after assessed as HK$30 per share. Chim was also systematic to compensate HK$30 million to a SFC to cover a authorised costs. He was also systematic to deprive himself of any element interests in Mandarin Resources. The also decider ruled that Chim be announced non-professional to reason a position of government in Mandarin Resources, and that he be unfit from behaving as a director.
The SFC pronounced during a time that it would not conflict a lifting of a trade cessation as prolonged as Chim was no longer a stakeholder in a company.
Chim initial became a authority in 1991. He was diminished from a legislature in 1998 after being found guilty of plotting to forge share send documents. He was condemned to 3 years’ jail, after reduced to 12 months on appeal. He returned to Legco in 2004 and served until 2012. In 2007 he was found to have cancer, though was treated and recovered.
As a manners stand, a association can usually be delisted in Hong Kong if it has no business operations and has been dangling from trade for dual years.
In instances where companies have been dangling for dual years, a delisting isn’t a foregone conclusion. Companies can continue in this state as prolonged as they uncover they are actively seeking ways to find a resolution to a problem that led to a suspension.
If Mandarin Resources had listed Taiwan, a association would have been delisted once a trade cessation exceeded 6 months. If it was listed on Nasdaq, it would face delisting once a batch traded next US$1 for 30 days.
If it was listed in Shanghai or Shenzhen, it would face delisting if it had reported waste for 3 uninterrupted years or been flagged for regulatory issues.
“In my opinion, a delisting resource has a certain impact as it encourages association government to do a improved pursuit to raise profitability and share cost opening in a bid to say a inventory status,” Chim said. “From a financier insurance indicate of view, however, delisting will meant existent shareholders remove everything.”
Sometimes, a soft-touch proceed works better, he said. For example, penny stocks, or those listed companies whose shares trade next HK$1, are expected to restructure themselves, as a inventory standing itself is valuable.
These companies are mostly targeted as backdoor listings.
Mandarin Resources was creatively invested in skill and shares. Since a trade resumption, it has altered hands twice. Most recently a listed entity has been renamed Nepture Group, a Macau casino play.
“If a dangling companies or uneasy companies can keep their inventory standing and concede other companies to have a backdoor listing, a shares could resume trade and this could yield a lapse for a strange shareholders,” Chim said.
“I do not consider a backdoor inventory poses any problems. It is many critical that companies concerned in these exchange divulge all information to investors. Investors could afterwards confirm if they wish to deposit into these companies,” he said.