HKEX commences proceedings to delist Qunxing Paper Holdings

PUBLISHED : Friday, 06 October, 2017, 9:18pm
UPDATED : Friday, 06 October, 2017, 9:25pm

Hong Kong Exchanges and Clearing has commenced proceedings to delist troubled paper maker Qunxing Paper Holdings Company, the bourse announced on Friday.

“The exchange has decided to commence procedures to cancel the company’s listing under Rule 6.01(4) on the ground it is no longer suitable for listing,” the HKEX said in a statement.

“The Company has ceased to have sufficient operations or assets as required under Rule 13.24 to warrant its continued listing.”

The exchange said the company will have one month to provide a proposal for the resumption of trade. If no valid plan is put forward by November 6, the exchange will set a date for the delisting.

The company has been suspended from trading since March 30, 2011 after its auditor flagged concerns over the company’s annual results for the year ended December 31, 2010.

The then auditor identified inconsistencies between the information it got from other independent parties when compared with the company’s accounting records of transactions and balances with certain customers and suppliers.

There were also discrepancies indicating that documents contained in the company’s accounting records which showed some of its bank transactions may not be authentic, the exchange said.

The Securities and Futures Commission launched legal proceeding against the company in December 2013 by applying for a court order freezing HK$1.9 billion of Qunxing’s assets for allegedly giving misleading information in its listing prospectus in 2007 and documents related to its warrants.

Qunxing Paper goes into receivership under court order

The SFC in early 2014 obtained a Hong Kong court order to appoint interim receivers to take over the management of Qunxing Paper.

The SFC in 2014 had expressed its concerns over the company’s management integrity and the lack of a sound system of internal controls over its financial, operations and compliance matters to safeguard its assets and protect shareholders’ interests.

The company failed to issue financial results for 2013, nor has it filed for any year thereafter.

“The continuation of trading suspension for a prolonged period due to the company’s failure to resolve the audit issues and the SFC findings and publish its outstanding financial statements denies reasonable access to the market and prevents its proper functioning,” the HKEX said.

“The company’s current management has been unable (and does not appear to be taking steps) to resolve these issues despite a prolonged period of suspension,” the exchange statement said.