Hsin Chong under fire for property acquisition

The trading of shares of construction and property management company Hsin Chong were halted last week after it become public that its non- executive chairman Lin Zhuo Yan had been accused of acquiring two properties at purportedly inflated prices, one worth HKD4 billion and the other HKD5.9 billion.
The properties are located at Tieling and Foshan, mainland China. According to Anonymous Analytics, former Hsin Chong chief executive Wilfred Wong (who is currently Sands China president) reportedly had a stake in the Tieling site that was sold to Hsin Chong.
The firm made an announcement at the request of the Hong Kong stock exchange in response to allegations first made on  September 28 by Anonymous Analytics and later in various media reports. It says that it disclosed detailed information about the Tieling and Foshan projects in company circulars dated September 30, 2011 and November 4, 2014.
“We also note that each transaction has proceeded only after independent shareholders’ approval was obtained at a special general meeting of the company held for that purpose, at which various companies through which Dr. Wong and Ms. Ma Kwing, Pony (the spouse of Mr. Lin) held shares in the company, and Dr. Wong himself had abstained from voting. So far as we are aware, Mr. Lin did not hold any shares in the company at the time,” the announcement signed by Hsin Chong’s board of directors reads.
In an apparent reference to the the Tieling and Foshan projects devaluation, Hsin Chong stated: “We believe that the challenges faced by the property development sector in China is commonly known to investors in Hong Kong. It is unfortunate that the Analyst Report [Anonymous Analytics] has chosen to adopt, based on information that the company has published in the past, an extremely negative assessment of the prospects and valuation model. We urge shareholders of, and potential investors in, the company’s securities to continue to exercise their independent judgment when dealing in the company’s securities.”

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