Battered H share Guangdong Kelon Electrical Holdings will resume trading today following a three-month trading suspension, after revealing its failure to disclose its advancement of 1.26 billion yuan to parent Guangdong Kelon (Rongsheng). The non-disclosure by the home appliances maker was a breach of listing rules and Hong Kong Exchanges and Clearing has reserved the right to take appropriate action, against the company and/or the responsible directors, the H share said in an announcement last night. Trading of its shares was suspended in mid-December pending resolution of issues related to investigations by the mainland securities watchdog of the company's practices. The H share's new board of directors launched an internal audit into the company's finances and found 12 connected transactions between it and its parent. They were not publicly disclosed previously and were completed without securing shareholders' approval. The transactions, involving bank borrowings, purchase of raw materials, payment of advertising costs, bank guarantees and debt transfer, resulted in the parent owing 1.26 billion yuan (about HK$1.18 billion) to the H share. This far exceeded 25 per cent of the H share's net assets when transactions must be disclosed and approved by shareholders. Guangdong Kelon (Rongsheng) is the largest shareholder of the H share with a 34 per cent stake. Last November, Guangdong Kelon (Rongsheng) agreed to sell a 20.6 per cent stake in the H share to Greencool Technology Holdings chairman Gu Chujun for 560 million yuan. Under a supplemental agreement signed early this month, the price has been slashed to 350 million yuan. Liu Congmen, the H share's vice-chairman, said the price cut was after consideration of the overall asset conditions of the H share.