Section 203 SFA
5 Under Rule 703 of SGX Listing Rules, a company must immediately disclose any information concerning it or its subsidiaries which would, inter alia, be likely to have a material effect on the price or value of its securities. Further, under the then Rule 704(15)(c) read with Rules 1010(3) and 1010(5) of SGX Listing Rules, an issuer is required to immediately disclose “any acquisition of shares which result in a company becoming a subsidiary or an associated company of the issuer”, providing information about the “aggregate value of the consideration”, “the value of assets acquired”, amongst others. In relation to the acquisition of the Fujian Land, China Sky recklessly, with Huang’s connivance, failed to disclose or immediately disclose the following information as required under the said rule, thereby causing China Sky to be in breach of Section 203 of the SFA:
5.1 that the acquisition of the Fujian Land was pursuant to a Share Purchase Agreement between Winburg and Mr Zhang;
5.2 that the seller of the land was Mr Zhang and not Fujian Fuyuan, as announced, by way of the Share Purchase Agreement;
5.3 that by entering into a share purchase agreement with Mr Zhang, Fujian Fuyuan became a wholly owned subsidiary of China Sky and China Sky would in turn, gain control of the Fujian Land;
5.4 that the total consideration paid for the acquisition of Mr Zhang’s shares was RMB 149 million and not RMB 169 million.
5.5 the value of assets acquired through the acquisition of Mr Zhang’s shares in Mega Force, including inter alia, the value of Fujian Fuyuan;
5.6 that the land has not been approved for non-agricultural purposes yet; and
5.7 that the total envisaged cost for development of the Fujian Land would be about RMB 5 billion, out of which RMB 1 to 5 billion would be used for the construction of basic facilities.
6 The above breaches by China Sky were committed in the period where Huang was the executive director and Chief Executive Officer of China Sky. Accordingly, Huang is deemed to have contravened Section 203 read with Section 331(1) of the SFA.
7 Huang has admitted to the above contraventions of the SFA.
China Sky shares have been suspended from trading since 2011. Its last market cap was about S$80 million. Chart: Bloomberg
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