HK firm fined for share rules breach

The incident happened during Aug. 18-19 while its shares listed on the main board of the Hong Kong Stock Exchange were suspended due to a sensitive announcement.

The Taiwan Stock Exchange Corp. (TSEC) imposed a fine of only NT$50,000 on Kith Holdings for its failure to release the price-sensitive information simultaneously, in accordance with relevant regulations.

TSEC spokesman Chu Shih-ting said that TSEC is studying the feasibility of launching simultaneous suspension of trading of TDRs listed on the Taiex if trading of their parent shares listed on the Hong Kong stock market or other markets is suspended for whatever reason.

Market sources said that Kith Holdings applied to the Hong Kong Stock Exchange to suspend its shares from 10 a.m. on August 18, and then publicized an announcement that Apex, a major U.S. customer of Kith Electronics, an affiliate of the group, failed to honor a debt of up to NT$12.06 billion.

But Kith didn't reveal the information until 1:28 p.m. on August 18, and the information was released on the Market Observation Post System of the TSEC's website instead of via a press release.

As a result, while Kith shares were suspended from trading on the Main Board of the Hong Kong Stock Exchange, trading of the Kith's TDRs continued in the Taiex.

Ironically, Kith's listed TDR price rallied on the two trading sessions of Aug. in Hong Kong on Aug. 20, and declined sharply for three consecutive trading sessions.

The listed price of Kith TDRs once hit a low of NT$7.7 per share, plunging 18.77 percent from a high of NT$9.48 recorded in July and falling under the underwriting price of NT$8 offered in early May.

TSEC chairman Xue Qi has vowed to make Taiwan become a regional funding center in the Asia-Pacific region by upgrading the island's capital market to international levels. To achieve this goal, another incident like the Kith controversy must be avoided. The TSEC is expected to introduce effective measures against it.

Kith Group has been a specialist in providing high quality multi-color paper packaging products and is recognized as a leading national package printing enterprise in China. In 2009, the Group was honored with one of the “Hong Kong Outstanding Enterprises” awards by Economic Digest.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos
 Respond to this email