SC raps China-based CSL, Xingquan and Maxwell for breaching laws

In a statement, the SC said that it has not authorised any ICOs pending the finalisation of its guidelines.

KUALA LUMPUR: The Securities Commission rapped three China-based companies for various breaches of the securities laws and stated the retention of four directors were prejudicial to public interest.

The regulator said on Friday the three companies were China Stationery Ltd (CSL), Xingquan International Sports Holdings Ltd (Xingquan) and Maxwell International Holdings Bhd.

In a statement, the SC said the retention of office by four of the directors in these companies were prejudicial to public interest. 

The four individuals are Chan Fung @ Kwan Wing Yin (Chan), executive chairman and CEO of CSL; Datuk Wu Qingquan, executive chairman and CEO of Xingquan; Wu Lianfa, executive director of Xingquan and Li Kwai Chun, a director of Maxwell.

“In making this public statement under section 354(3)(f)(ii) of the Capital Markets and Services Act 2007 (CMSA) against the four directors, the SC took into consideration, among others, the seriousness of the breaches committed by these individuals.

“In addition, the SC also reprimanded several individuals from the companies’ Boards of Directors and managements,” it said.

The SC reprimanded CSL, its executive chairman and CEO Chan, former executive director Angus Kwan Chun Jut (Angus) and former independent non-executive director Herman Widjaja for furnishing false or misleading financial statements to Bursa Malaysia.

 The SC also reprimanded Chan for causing two of CSL’s units to be a guarantor for Chan’s personal loans, with the intention of causing wrongful loss to the said subsidiaries. 

Chan and Angus were also reprimanded for failure to provide a response to the SC when served with written notices requesting for information.

As for Xingquan, the SC reprimanded its executive chairman and CEO Datuk Wu Qingquan, executive director Wu Lianfa, former non-independent non-executive director Ng Sio Peng and former senior independent non-executive director Zhou Liyi.

The offences were falsely recording a loss of RMB415.7 million from the sale of inventory by Xingquan’s wholly-owned subsidiary; furnishing to Bursa a false agreement between the said subsidiary and a third party; furnishing false or misleading financial statements to Bursa; and recording cash and bank balances in eight bank accounts collectively belonging to Xingquan that were false or misleading.

The SC also said Wu Qingquan and Wu Lianfa were reprimanded for failure to provide a response to the SC when served with written notices requesting for information.

It also pointed out Xingquan had also committed breaches of the Bursa Malaysia Securities Main Market Listing Requirements, and actions had been taken by Bursa Malaysia. 

As for Maxwell, the SC reprimanded the company and Li, its president and executive director at the material time, independent non-executive director Su DeMou and former CFO Tan Swee Song.

The offences were for recording in Maxwell’s financial statements a payment of RMB45.60 million by Maxwell’s wholly-owned subsidiary, which information was false or misleading; and furnishing false or misleading financial statements to Bursa.

Li was also reprimanded for failing to appear before the SC’s investigating officer.

The SC also reprimanded Maxwell former CEO and executive director Xie Zhenan for furnishing false or misleading financial statements to Bursa.