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Hong Kong – Updated HKEx FAQs In Relation To Disclosure Requirements For Directors Of Listing Applicants.

17 June, 2015

 

 
The HKEx revised its Frequently Asked Questions Series 1 in May 2015 (Revised FAQ) in relation to disclosure requirements where a director of a listing applicant is subject to an investigation, hearing, proceeding or judicial proceeding in respect of which disclosure is prohibited by law (Proceedings). Appendix 1A Paragraph 41(1) of the Listing Rules requires brief biographical details to be provided in the listing document regarding the directors, proposed directors, senior managers and proposed senior managers of the issuers, whichshould include all “such other information which shareholders should be aware, pertaining to the ability or integrity of such persons.”
 
The Revised FAQ clarifies that where a director of a listing applicant is subject to an investigation, hearing, proceeding or judicial proceeding in respect of which disclosure is prohibited by law, he or she should assess whether the Proceedings relate to his or her ability or integrity. If the answer is yes, the director should seek consent from the relevant authority to confidentially disclose details of the Proceedings to the HKEx for assessment of his or her suitability as director of a listing applicant. If the director is unable to obtain the relevant consent, or the HKEx determines (following confidential disclosure by the director) that the Proceedings give rise to material concerns about his or her ability or integrity, the listing document will not be able to comply with Appendix 1A Paragraph 41(1) of the Listing Rules, and he or she should resign from the position as director of the listing applicant. The HKEx further sets out that if the director’s position in the listing applicant is so material that his or her resignation will result in the listing applicant not being able to comply with the Listing Rules (such as the management continuity requirement under Chapter 8), the listing applicant should postpone its listing application to HKEx until the Proceedings involving the director have been resolved.
 
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