7 Sep 2020
The SFC has commenced proceedings in the Market Misconduct Tribunal (MMT) against Tianhe Chemicals Group Limited (Tianhe) and its executive director, Mr Wei Xuan, for allegedly issuing Tianhe’s listing prospectus in which the company’s revenue was overstated by over RMB6.7 billion.
The SFC is also seeking orders from the Court of First Instance under section 213 of the SFO to restore all public shareholders of the company to the position before their subscriptions or purchases of Tianhe’s shares.Tianhe issued the prospectus on 9 June 2014 for its initial public offering in Hong Kong and raised net proceeds of approximately HK$3.52 billion.
The SFC alleges that Tianhe’s prospectus contained materially false or misleading information regarding its sales revenue and profits for its track record period for the financial years from 2011 to 2013, which was likely to induce subscriptions for or purchases of the shares of Tianhe and/or to increase the share price of Tianhe in Hong Kong. The SFC’s investigation revealed that about 53% of Tianhe’s total track record revenue of RMB12.6 billion disclosed in the prospectus was overstated.