Hong Kong-focused Forex broker CLSA Premium Ltd (HKG:6877), formerly known as KVB Kunlun, is seeking review of a decision concerning the trading of the company’s shares on the Hong Stock Exchange.
The board of directors of CLSA Premium today informed the shareholders and potential investors of the company that, after seeking professional advice, the company has submitted a written request for the Decision to be referred to the Listing Committee of the Stock Exchange for review pursuant to Chapter 2B of the Listing Rules.
Accordingly, trading in the shares of the broker will continue.
Shareholders and potential investors of the company are reminded that the outcome of the Review is uncertain. Should the Listing Committee of the Stock Exchange uphold the decision after the Review, the trading in the shares may be suspended under Rule 6.01(3) of the Listing Rules.
On January 19, 2023, the Stock Exchange notified CLSA Premium of its decision that the company has failed to maintain a sufficient level of operations and assets of sufficient value as required under Rule 13.24, and that the trading in the Company’s shares will be suspended on 3 February 2023 under Rule 6.01(3) of the Listing Rules unless the Company applies for a review of the decision.
The Stock Exchange has considered the broker operates the business of provision of leveraged foreign exchange, commodities and index trading services in Australia, New Zealand and Hong Kong since listing and sale of Chinese and Japanese medicines products and healthcare products in the PRC and Hong Kong since May 2022, each of which is not demonstrated to be of substance, viable and sustainable.
Since business deterioration in 2019, none of the business plans has succeeded in improving the scale and profitability of the Margin Dealing Business. In 2022, the operation in New Zealand and Australia ceased/was suspended. The remaining operation of the Margin Dealing Business – bullion trading business in Hong Kong – only has a short operating history and a minimal operating scale.
The Trading Business also has a very short operating history and minimal scale of operation.
As at 30 June 2022, the Company had total assets and net assets of HK$284 million and HK$246 million respectively. Its total assets were mainly comprised of cash and bank balances of HK$221 million. As noted above, the Company did not appear to have sufficient assets to support the operation of a viable and sustainable business.
The Stock Exchange is not satisfied that the Company has sufficient assets to meet Rule 13.24.
